DIAMOND NEWS ROUNDUP — Kennecott, Aber intensify efforts at Diavik project

Partners Kennecott Canada and Aber Resources (TSE) will proceed immediately with a $23.5-million program aimed at exploring the A-154 South kimberlite pipe at the Diavik project in the Northwest Territories. The work will consist of underground bulk sampling and deep delineation drilling.

The announcement follows the evaluation of diamonds recovered in a mini-bulk-sampling program, which consisted of eight large-diameter drill holes on the pipe, situated near Lac de Gras.

A total of 255.6 carats were recovered from 56.5 tonnes of kimberlite for a grade of 4.5 carats per tonne. The diamonds are valued by CRA Diamonds at an average of US$56.70 per carat, for an overall value of US$255 per tonne.

(By way of comparison, four of the five kimberlite pipes planned for production at the N.W.T. Diamonds project of BHP Diamonds and Dia Met Minerals have an average value ranging from US$43 to US$132 per carat and overall values ranging from US$34 to US$142 per tonne.)

Drilling of the A-154 pipe has delineated a resource estimated at 8.4 million tonnes grading 4.5 carats per tonne to a depth of 250 metres below the lake level. About 30 metres of water and overburden overlie the pipe. If projected to a depth of 650 metres, the pipe could contain a possible resource of 20 million tonnes.

All equipment required for the bulk sampling was mobilized to the site in late March. A month later, the portal had been constructed and the decline driven an initial distance of 15.4 metres.

The decline eventually will be driven far enough to allow a 3,000-tonne bulk sample to be taken from the 155-metre level. Deep drilling will then determine the grade and tonnage of the A-154 South pipe between the 250- and 650-metre levels.

The bulk-sampling program and processing will be carried out at Kennecott’s diamond recovery plant in Yellowknife. Completion is expected by the end of April, 1996.

Situated 300 metres northeast of A-154 South is the A-154 North pipe, where two large-diameter drill holes provided 12.9 tonnes of kimberlite material which yielded 28.6 carats for a grade of 2.2 carats per tonne.

Aber says evaluation of diamonds from the A-154 North pipe will not be announced until a larger, more representative sample is taken.

The drill-indicated resource of the A-154 North pipe is estimated at 5.3 million tonnes grading 2.2 carats per tonne to a depth of 250 metres below the lake level. A potential resource is estimated at 15 million tonnes to a depth of 650 metres. About 40 metres of overburden and water lie above the pipe.

Meanwhile, surface delineation drilling is set to resume shortly on the A-418 kimberlite pipe, which was recently discovered 750 metres southwest of the A-154 South pipe. The first hole drilled, 418-1, resulted in the previously reported visual observation of a clear, colorless diamond measuring 3 mm. Core from the hole was sent to Lakefield Research for caustic fusion analysis, and results are pending.

A second hole, 148-2, resulted in the recovery of 29 diamonds from 707 kg of sample for a total weight of 2.56 carats. A preliminary grade is calculated at 3.6 carats per tonne.

Kennecott has yet to decide whether to fund additional underground drilling and bulk sampling of the A-154 North and A-418 pipes. Access to both could be provided through extensions of the underground workings required for the A-154 South pipe.

Six holes were drilled in order to test the A-21 pipe, situated 4,400 metres southwest of the A-154 South. Two visible diamonds, each averaging greater than 3 mm, were observed in hole 21-9. Caustic fusion analysis of the first two holes recovered 44 macrodiamonds and 109 micros from 219.7 kg of core for hole 21-5, and 7 macros and 25 micros from 56.8 kg of sample for hole 21-6. Assays for the remaining holes are pending.

An additional six kimberlite pipes have undergone drill-testing, and core samples have already been submitted for caustic fusion analysis. In addition, ground geophysics, drilling and heavy mineral sampling continue throughout the Diavik property on several targets, including the A-369 indicator mineral train anomaly.

Kennecott holds a 60% interest in the Diavik project, with Aber holding the remainder.

Elsewhere in the Northwest Territories

* Ashton Mining of Canada (TSE) and partner Pure Gold Resources (TSE) have amended the Slave Regional joint venture.

In return for contributing $2 million in exploration expenditures and subsequently carrying Pure Gold until the funds are spent, Ashton increased its interest to 76% from 51%, with Pure Gold retaining 24%.

The two companies have conducted regional exploration throughout the Slave Craton since July, 1994. Exploration will continue to focus on delineating kimberlite targets.

At another Ashton-Pure Gold project, known as Lupin, Ashton can earn a 51% interest in several properties, which include Humpy 1 and 2, Dick 1 and 2, RR, Noront 1 and Cross Lake. The company must fund all exploration up to, and including, the collection of a 20-tonne bulk sample from each kimberlite discovered.

Meanwhile, Ashton has identified 13 priority anomalies from an airborne survey over the 105,000-acre Noront 1 property. Follow-up ground work indicates that most of these anomalies lie beneath lakes. A further program of indicator mineral sampling, now in progress, is attempting to firm up drill targets. (One of the anomalies under investigation is said to be a sulphide gossan.)

The Noront 1 claim block is 40 km southwest of Mountain Province’s AK ground and 23 km from the Camsell Lake discovery. Pure Gold is earning a 40% interest in Noront 1, which is held 75% by Noront Resources (VSE) and 25% by Rusty Lake Resources (CDN). Ashton’s 51% interest will be earned proportionately from each of the parties.

* Partners ITL Capital (VSE) and Riley Resources (VSE) report that negotiations with several interested parties are proceeding with respect to the joint venture’s 40,600-hectare claim block in the Lac de Gras region.

The claims are 40 km northeast of Mountain Province’s 5034 kimberlite. During 1993 and 1994, the companies spent $1.2 million on exploration, which included airborne geophysics, follow-up ground geophysics and geochemistry. Twenty-five potential kimberlite targets were outlined.

Africa

The River Ranch diamond mine, half of which is owned by Redaurum (TSE), produced a record 17,500 carats in June.

Installation of the Phase III diamond recovery plant at the Zimbabwean mine is nearing completion, and production is expected to exceed 40,000 carats per month, beginning in October.

Production for the year is projected at 210,000 carats.

Redaurum has also upgraded and refurbished the diamond recovery plant and earth-moving equipment at its wholly owned Quaggas Kop alluvial diamond mine in South Africa. Diamond recovery there will resume by mid-July. Extensive exploration drilling on the adjoining 4,000-hectare Rooiberg farm will begin around the same time.

Late snowfalls delayed Redaurum’s third diamond project, the Kelsey Lake kimberlite in Colorado. However, construction of a 160-tonne-per-hour rotary pan diamond recovery plant is on schedule, with site installation slated for late September, to be followed by commissioning in October.

Brazil

Cliff Resources (TSE) has executed a 60-day option agreement with Brazilian mining company Sul America Mineracao e Associados to earn a 50% interest in the Tres Marias diamond project in Minas Gerais state.

The project comprises 31 exploration properties, or about 28,000 hectares. All of these have exploration potential for both kimberlite- and placer-hosted diamonds.

Alluvial flats and terraces are prominent on 13 of the properties. The placers of the region have been worked since colonial times and are famous for having produced several stones weighing from 50 to 500 carats.

The remaining 18 areas were pegged over airborne geophysical anomalies after kimberlite indicator minerals were found in concentrate from the alluvials. SOPEMI (the Brazilian subsidiary of De Beers) and Canabrava Diamond (a joint venture between Toronto-listed Tec
k and Southwestern Gold) control most of the surrounding claims.

Should Cliff decide to exercise its option to earn a 10% interest, it would be required to issue 16 million shares and options. To earn an additional 40%, it would have to spend US$2 million on alluvial exploration and mining over two years.