DIAMOND NEWS ROUNDUP — CRA joins diamond hunt in Canada’s North

The Central Selling Organization will be increasing its prices for rough gem diamonds of 2 carats and larger by an average of 5%, with the increase to take effect with the sight beginning Nov. 28, 1995. The CSO’s prices for all other categories remain unchanged, and that is not good news for producers that turn out small, low quality diamonds. In the past year, prices for this segment of the market have weakened and remain under downward pressure.

The Northwest Territories

* A letter-of-intent agreement sets in motion a proposal which would entitle CRA of Australia the right to earn 51% of Winspear Resources’ (VSE) interest in diamond properties held in the Slave Craton area of the Northwest Territories.

Under the arrangement, CRA would be responsible for funding all the initial exploration and development work, up to the treatment and analysis of a 25-tonne bulk sample for each identified pipe.

The proposal is expected to be formalized by the end of 1995. Exploration work would begin early in 1996.

CRA is one of three major companies, held wholly or in part by Australian interests, that are actively looking for diamonds in Canada’s North. BHP Minerals and Ashton Mining of Canada (TSE) have been active in the N.W.T. for several years.

* Results from a preliminary investigation of the Misty Lake property, southwest of Mountain Province’s AK property, will be used by Monopros to further define its spring 1996 exploration program. A total of 1,785 samples was taken during the fall field program over the 218,000-acre parcel of land.

Monopros, the Canadian exploration arm of De Beers, can earn an initial 51% interest by spending $4.7 million prior to the end of 1997. An additional 10% interest can be earned by funding the project to production.

Upon Monopros’ vesting its full interest, SouthernEra Resources (TSE) will hold a 23% interest, Major General Resources (VSE) will hold 9.6% and the International Diamond Syndicate will hold 6.4%.

Ownership in the Diamond Syndicate is shared 40% each by Calco Resources (VSE) and Teryl Resources (VSE), and 20% by Agate Bay Resources (VSE).

Next spring’s exploration program is expected to entail follow-up ground magnetic surveys, additional sampling and, possibly, some drilling.

* The first hole of a minimum five-target drilling program on the CJ claim group in the Lac de Charloit region intersected predominantly granite and a mafic biotite schist.

Ming Financial (ASE) can earn a half interest in the 40,600-hectare group of claims from partners ITL Capital (VSE) and Riley Resources (VSE) by spending $4 million over the next three years.

Further drilling is suspended until after freeze-up.

* By issuing 100,000 shares, NCC Mining (VSE) can acquire five non-contiguous claim blocks in the Lac de Charloit region. The blocks border the CJ claim group held by ITL Capital and Riley Resources, and are adjacent to Mountain Province’s C.J. property.

Several anomalous targets were previously identified through geochemistry and geophysics.

United States

* A drill program is under way at the Leek Springs property in El Dorado County, California. The program will be carried out by Diadem Resources (ME), which has an option to acquire up to a 55% interest in the property from the Silverstone Prospecting Syndicate. To earn the interest, Diadem must make staged payments totalling US$350,000, issue up to 750,000 shares in four stages, and spend US$5 million on exploration over three years.

The property is reported to have geophysical and geological indications of ultrabasic intrusive bodies. Diamond indicator minerals were identified during previous work programs. These were followed upstream to an area where subsequent magnetic surveys indicated the presence of intrusives, which Diadem’s consulting geologist believes may represent kimberlites or lamproites. The company is further encouraged by reports that diamonds were recovered with gold in downstream rivers during the 1849 gold rush.

Russia

* A single, large-diameter hole drilled to a depth of 135 metres on Pipe 401 at the Verkhotina project in Russia recovered 63 macrodiamonds from 104.4 tonnes of kimberlite material.

Archangel Diamond (VSE) holds a 40% interest in the project. Of the macrodiamonds recovered, 16 were between 1 mm and 2 mm in size, while 2 were between 2 mm and 4 mm. The grade of the pipe is calculated at 0.0097 carats per tonne.

Small-diameter drilling is currently underway on Pipe 734, and results are pending from Pipes 402 and 451.

Africa

* Exploration is to commence on the joint-ventured Kenieba project in Mali, West Africa.

Mali Diamond Exploration was granted the diamond concession by the Mali government, in return for a 10% free carried interest. Mali Diamond is jointly owned, 51% by Australian-based Ashton Mining and 49% by Mink Mineral Resources (VSE). Mink is required to spend US$1.5 million over a three-year period.

A field program will further evaluate the commercial potential of four of the 21 known kimberlite pipes on the property and follow-up a number of areas where indicator minerals are present. Reconnaissance exploration will be carried out on approximately one-third of the concession area.