DIAMOND NEWS ROUNDUP — Paramount and Riva buy into Pure Gold claims in N.W.T. (September 04, 1995)

Paramount Ventures & Finance (VSE) and Riva Petroleum (VSE) have both entered separate agreements with Pure Gold Resources (TSE) to acquire interests in the CR, LL and JC claim blocks in the Lac de Gras area of the Northwest Territories.

The claim blocks are held 50-50 by Pure Gold and Lytton Minerals (TSE), with Ashton Mining of Canada (TSE) holding an option to earn a 51% interest in the CR and LL claim blocks.

Paramount can acquire 36.25% of Pure Gold’s interest in the claim blocks by paying an initial $310,000 and two further payments of $27,000 over the next two years. Riva, on the other hand, can acquire 7.5% of Pure Gold’s interest in the blocks by issuing 220,000 common shares and making two payments of $5,600 over the next two years.

United States

* Acting on behalf of its publicly held Australian parent company, Crystal Mining, Colorado-based Crystal Exploration is soliciting bids for its shares.

All of Crystal Exploration’s shares are held by Crystal Mining.

Crystal Exploration holds a 32.9% interest in, and is the operator of, the Lake Superior venture with Ashton Mining of Canada. The venture has diamond exploration interests in Michigan, Wisconsin and northern Illinois.

Crystal Exploration and Dow Chemical, which initiated the original program, have conducted exploration programs in the above states since 1982, with Ashton joining in 1992. At least 26 kimberlites have been discovered in the area. Eight of the pipes are diamondiferous, but not economic.

Recent work by Crystal Exploration has developed a new set of targets, and the company has budgeted to drill 11 magnetic anomalies in 1995.

The successful bidder will acquire Crystal’s modern sample preparation and processing facility, including microscopes, a heavy liquid lab, a magnetic separator, etc., as well as a fully equipped field office, five field vehicles and a van.

Crystal expects to award the winning bid by the end of September. Meanwhile, bids are being accepted through the company’s office in Crystal Falls, Mich.

Africa

* A recent financing sets the stage for Rex Diamond Mining to increase productivity at its three producing diamond mines in South Africa.

Currently in the process of securing a listing on the Toronto Stock Exchange, the company also has extensive exploration properties in South Africa, a wholly owned subsidiary with diamond leases in Sierra Leone, and a diamond-marketing subsidiary based in Antwerp.

The company is headed by Serge Muller, who has been involved in the diamond business in South Africa for more than 10 years. “We expect to be the only fully integrated Canadian public company that mines, processes and markets top-quality rough diamonds,” Muller tells The Northern Miner.

He says the company is aiming to achieve annual sales of US$180 million in the gem-quality segment of the diamond market.

Fortunately, the company’s three operations — all fissure mines — produce high-quality gemstones. For example, the Bellsbank mine produced 18,730 carats for the year ended Feb. 28, 1995. Of this total, 84% were described as gem-quality, with the average sales price being US$256 per carat. Operating costs were US$24 per carat. (It should be noted that these prices reflect the sales price by the company’s marketing division to end-users.) The Ardo mining complex, based on three producing fissure mines, produced 18,077 carats for the year ended March, 1995, 75% of which were gem quality. The average sales price was US$130 per carat. The Rex mine produced 3,060 carats during the same period, 92% of which were gem-quality, with the average sales price being US$220 per carat.

Fissure mines are, for the most part, labor-intensive operations. Because of this, the company is interested only in fissures that produce a high percentage of gem-quality diamonds. The company intends to increase the productivity of its three mines by deepening their shaft systems and installing more modern equipment. Even after production is increased, the remaining mine life of these operations is estimated at roughly 15-20 years.

* Soil sampling to recover kimberlite indicator minerals is under way on the Gope prospect in Botswana.

To filter out targets for drilling, TNK Resources (CDN) has sent five teams into the field to follow up coincident geophysical and geochemical anomalies throughout the Gope licence block.

Previous work has identified kimberlite pipe clusters scattered throughout the property. In the current program, nine 400-kg samples from each of 55 targets will be obtained. The material will be screened to recover all sands greater than 0.425 mm and smaller than 2 mm. The remaining fraction of sands will be bagged, labelled and transported for analysis.

TNK’s licences effectively surround a kimberlite pipe cluster found by DeBeers. That firm recently constructed a headframe and large-capacity processing plant on its property.

Meanwhile, TNK’s 70%-owned subsidiary, Midswana Diamond Exploration, has completed drilling on its Middlepits diamond prospect in Botswana. Four targets were drilled at depths between 34 and 125 metres. One encountered kimberlite, one hit a lamprophyre dyke, and the other two reached only quartzite. Midswana is awaiting the analysis of a 200-kg sample from the kimberlite as well as samples from the lamprophyre dyke and a third area where red kimberlitic garnets were found.

Brazil

Newly listed Ambrex Mining (CDN) has started comprehensive sampling at its 6,000-hectare Barra de Salinas diamond property in Brazil’s Minas Gerais state.

The program is aimed at confirming and expanding an existing resource of 245,000 recoverable carats of diamonds.

The company says previous work on the property had established that the 255 diamonds recovered from 60 test pits averaged 0.54 carat per stone, and were valued at US$200 per carat. Ambrex has the option to buy 80% of the property, which is situated on the Jequintinhonha River, Brazil’s largest diamond producer.

Ambrex expects the reserve development work will be completed in 1995.

A mine feasibility study will follow, with the objective of developing an initial 50,000-carat-per-year diamond mining operation.

India

* An 11,150-sq.-km concession in Orissa, India, has been granted to Calgary-based Leader Mining International (ASE).

The area is reported to cover two major trends of alluvial diamond deposits, where stones of up to 10 carats in size have been recovered. In the adjoining state of Madhya Pradesh, four kimberlite pipes were recently discovered.

Leader plans to carry out an initial ground survey this fall.