DIAMOND NEWS ROUNDUP — Redaurum buys majority stake in South African producer

The largest Canadian-based diamond producer, Redaurum (TSE), is about to get larger.

The company has entered into an agreement to buy an 80% interest in a producing alluvial diamond mine in South Africa for $2.1 million. The mine is on the country’s west coast in an area long famous for alluvial gem diamonds.

In limited operation since May 1994, the mine has been producing about 260 carats per month, most of which are of gem quality. The property is said to contain a diamond value exceeding $35 million. There is further potential in a partly defined paleo river channel that underlies the marine gravels.

As soon as possible, Redaurum plans to increase production to beyond 1,000 carats per month, and then, sometime next year, to beyond 2,000 carats per month.

This is the fourth producer for Redaurum, which owns the Kelsey Lake mine in Colorado, the Quaggas Kop alluvial mine in South Africa and half of the River Ranch mine in Zimbabwe. By 1997, Redaurum officials expect the company’s total annual diamond production to reach 750,000 carats.

Meanwhile, Redaurum has closed the private placement announced in October. A total of 5.27 million units were subscribed, providing the company with $7.4 million. The funds will be used to expand Kelsey Lake and Quaggas Kop and finance additional mine acquisitions.

Elsewhere in Africa

Toronto-listed Exall Resources has commissioned its diamond-gold dredge and recovery plant in Guyana.

The plant is on the Mazaruni concession, in the most prolific diamond field in Guyana. Mining activity in the area dates back to 1901, since which time an estimated 4 million carats have been produced.

A 6-month program of exploration and bulk sampling on the Mazaruni concession, and on surrounding claims held by M.C. Correia Holdings of Guyana, will begin shortly. Both the completion of Exall’s plant and the exploration program are being funded by Mazaruni Minerals (formerly Global Industries) to a maximum of US$500,000.

* A kimberlite source continues to elude Botswana Diamondfields (VSE) as it carries out an ongoing exploration program over several diamond licences it holds in Botswana.

The company has followed up previously identified geophysical and geochemical anomalies with further ground magnetics, soil sampling and selected drilling.

Work continues on the Jwaneng, Makgadikgadi, Okwa and Mopipi licences.

At Mopipi, four microdiamonds were recovered in soil samples from three different areas.

Northwest Territories

* Analysis of the first drill hole from the 174 pipe at the Camsell Lake joint venture has returned 9 macrodiamonds and 231 micros from 571.1 kg of core.

Winspear Resources (VSE) is operating the project, which lies 140 miles northeast of Yellowknife, and holds a 30% interest. It is in the process of acquiring an additional 40% from Aber Resources (TSE). The remainder is split between AfriOre (VSE) with 20% and Consolidated Newgate Resources (VSE) with 10%.

In total, hole 95-4 (previously referred to as hole 95-2) yielded 10 macros and 274 micros from 622.2 kg of sample.

The 174 pipe is 150 metres northwest of pipe CL-25. A second hole, drilled into the 174 this past fall, intersected 134.1 metres of kimberlite before being discontinued because of freezing conditions. A 50-kg sample is being prepared for analysis.

* With field work now complete, the joint-venture partners who own the MacKay Lake diamond project in the Northwest Territories are awaiting laboratory results.

Partners Monopros, Noble Peak Resources (ASE) and SouthernEra Resources (TSE) will soon be selecting priority targets for drill testing scheduled for early 1996.

In July, Monopros initiated a detailed and systematic till geochemical sampling program on the western boundary of the 200,000-hectare property. By early September, sampling was completed at the eastern boundary, and 1,501 samples were prepared and shipped to the DeBeers laboratory in Kimberly, South Africa.

Field checking of magnetic anomalies continued in September, and seven additional targets have been staked.

Diamondiferous kimberlites have been found on properties immediately to the north and the northwest of the MacKay Lake project.

* Monopros has recovered two diamonds, measuring 1.4 and 2.9 mm, from a 1,146-kg bulk sample taken earlier this year from the Thirsty Lake diamond-bearing dyke on the Parker Lake property. The bulk sample was processed only for macrodiamonds ranging in size from 1 to 5 mm.

The property lies 97 km west of Rankin Inlet.

The dyke itself measures 600 metres in length and up to 1.5 metres in width. An additional 3.7-kg sample produced more micros per kilogram than a previous 7.8-kg sample, which returned 6,680 diamonds.

Ownership of the Parker Lake property is shared 50% by Cumberland Resources (TSE), 25% by Comaplex Minerals (TSE) and 25% by Manson Creek Resources (TSE).

Results from regional exploration, carried out this past season, are being compiled.

* Drilling on the Back Lake property is in full swing.

SouthernEra Resources owns 70% of the property, which lies 28 km northwest of the 5034 kimberlite discovery made by Mountain Province Mining (VSE). Sampling in the vicinity of Back Lake yielded numerous small kimberlite fragments and anomalous amounts of kimberlitic minerals, including G10 pyropes.

Brazil

* By issuing 100,000 shares, America Mineral Fields (VSE) can acquire two diamond properties from Gold Standard (NASDAQ), consisting of 41,600 hectares in Brazil’s Minas Gerais state. The properties are near America Mineral’s two alluvial diamond projects: the Santo Inacio and the Chapada.

Ukraine

* A 10-hole drill program is planned for the end of November in the northwestern region of the Ukraine.

This past summer, SouthernEra Resources delineated 10 targets by carrying out ground geophysics and reverse-circulation drilling. The sampling of alluvial material associated with the geophysical targets yielded several angular pyropes, and two diamonds measuring 0.5 mm.

The joint-venture project consists of SouthernEra with a 75% interest, Prior Resources (ASE) with 15% and Consolidated Newgate Resources (VSE) with 10%. Prior can earn an additional 30% from SouthernEra by spending US$150,000 on exploration.

An agreement with the Ukrainian government provides these partners with the exclusive right to explore for diamonds in the country. Additional areas of interest are being assessed.