Canabrava explores diamond targets in Brazil

An aggressive exploration program, initiated one year ago by Canabrava Diamonds (VSE), has identified 120 kimberlite-lamproite pipe-vent complexes at its namesake project in Brazil’s Minas Gerais state.

The project, which comprises 23 properties totalling 748,900 hectares, is 400 km southeast of the capital city of Brasilia.

Teck (TSE) has entered into a joint venture whereby it can earn a 60% interest by spending at least US$10 million on exploration and paying US$2 million cash over five years.

Teck is also required to produce a bankable feasibility study, arrange financing to place the project into production and make a production bonus payment of US$20 million (less any cash payments already made).

Although Brazil’s historic diamond production has come from alluvial deposits, Canabrava has focused its attention on the discovery of primary-source diamond deposits.

An aeromagnetic-radiometric survey over more than 70% of the properties has identified in excess of 1,100 magnetic anomalies. At the 611 targets designated as “priority,” ground follow-up work has discovered 120 pipes and vent complexes in outcrop. The results, from ongoing analysis of bedrock samples and more than 400 heavy mineral concentrates, will be used to determine which targets should be bulk-sampled and drilled.

Canabrava President John Paterson says a surface backhoe program, currently under way, is taking 1-ton samples from an initial 10 kimberlite-lamproite pipe complexes. He adds that the arrival of a drill rig to the project area is expected in the next month.

Recent sampling, within the Corrego das Pedras area of the Lagamar property, recovered close to 300 macrodiamonds from three small streams draining in kimberlitic tuffaceous rocks. More than 100 bedrock samples were collected and are being analyzed. Sampling has also been carried out on 11 kimberlite-lamproite pipes identified 2 km west and southwest of the streams.

Canabrava has picked up a further 115,000 hectares of exploration concessions in an area north and east of Lagamar. An airborne geophysical survey is to begin shortly.

On the Patos property, 175 magnetic anomalies have been outlined, four of which lie within drainage systems known to produce alluvial diamonds. Bedrock samples are being analyzed from a cluster of pipes at the headwaters of Rio dos Vermelhos, where diamonds of up to 114 carats were recovered from historical diggings.

Pipe complexes are also identified on the Tiros and Quintinos properties. Both properties are known for their historical alluvial diamond recovery. Stream sediment-sampling on the Formosa property has identified indicator minerals consisting of pyrope garnets and chrome diopsides in the vicinity of magnetic anomalies.

Although Canabrava’s emphasis is on diamonds, exploration work has identified nine areas of anomalous platinum mineralization. Follow-up bedrock sampling in the Quintinos property returned values of up to 4.5 grams platinum in decomposed ultramafic tuffs.

Separate from its joint venture with Teck, Canabrava has applied for exploration concessions consisting of 119,000 hectares, some 350 km west of Brasilia. At least 90 magnetic anomalies have been identified using government geophysical data. The anomalies correspond to an area where alluvial diamonds are being recovered by local miners. A preliminary program of mapping and rock sampling is planned.

Canabrava has completed a private placement to Teck consisting of 750,000 shares at a price of $3 per share. Non-transferable warrants were included with the shares, which allow the purchase of up to 375,000 shares at $3.75 each for up to 18 months.

Canabrava has 28 million shares outstanding, with Southwestern Gold (TSE) owning a 54% share.