The recovery of seven gem-quality diamonds from the London alluvial diamond project in South Africa sent shares in Monroe Minerals (MMX-V) soaring 20, to 45, in early trading in Vancouver on Feb. 5.
The stones, which tip the scales at more than 5 carats apiece, were recovered during the first month of preproduction. Also recovered were five stones exceeding 5 carats, including a rare 6-carat yellow diamond and a 15-carat stone.
In January, preproduction operations returned an average grade of 0.7 carat per hundred tonnes (cpht), at the lower end of the Calgary-based company’s 0.7-to-1.3-cpht forecast. The mean average stone size of 1.2 carats from the diamondiferous colluvial (Rooikoppie) gravels is 20% higher than predicted. The 19,000 tonnes of gravel processed were right on the mark. Monroe estimates the value of its stones at US$400 per carat.
No diamonds were sold in January.
Situated southwest of Johannesburg, the 21.2-sq.-km London property is the company’s first alluvial diamond mine.
A feasibility study, now under way, entails simulating full-production conditions — an accepted practice in the South African alluvial diamond sector.
London’s estimated resource comprises 467,000 tonnes of calcreted gravels running 1 cpht plus another 720,000 tonnes of Rooikoppie gravel running 0.6 cpht. Another 5.9 million tonnes are classified as inferred resources, and 5.3 million of those tonnes are estimated to grade 0.6 cpht.
In addition, a 3-sq.-km area with diamond exploration potential is targeted for drilling and pitting in preparation for resource estimation.
Monroe acquired the right to prospect and mine diamonds at London for 10 years (until Jan. 21, 2009) from Meytheron. In return, Meytheron retains a 14.5% royalty calculated on gross revenue. Monroe is also responsible for a monthly rental fee of R10,000. The property is also subject to a 1.5% after-payout net profits interest payable to an individual who assisted in negotiations with Meytheron.
Monroe’s prospecting permit was renewed late last summer. The company’s Environmental Management Program has been approved and a R50,000 rehabilitation guarantee has been lodged.
Monroe can extend its rights to London by 10 years by securing a mineral lease on the property. The company also has the right of first refusal on the sale of the surface rights to the property.
According to South Africa’s Diamond Board, artisanal miners recovered about 93,372 carats of diamonds from the larger portion of the London farm prior to 1984 (mostly between 1912 and the 1930s). Most of those stones were derived from shallow-to-outcropping colluvial and alluvial gravel deposits.
Monroe’s other principal project is Cazali, situated nearby on the Zitland farm, where it has an option on mineral rights held by Randgold and Exploration. Results from 377 line-km of ground geophysics suggest that as much as a third of the project has potential for Rooikoppie gravels.
No mineral resources or reserves have been identified on the Cazali, and there is no evidence of past diamond mining, though Monroe notes that diamonds have been found on properties to the north and south.
The company also intends to explore two kimberlite prospects in the region — Allandale and Southwestern Transvaal. Work will begin once the alluvial projects provide some cash flow.
Monroe changed its name from Blue Ice Minerals on a 1-new-for-3-old-share basis early last year.
Monroe ended a nickel higher at 30.
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