DIAMOND PAGE — Archangel completes initial delineation drilling on Verkhotina pipe

Archangel Diamond (AAD-V) has announced more results from a recently completed definition-drilling program on Pipe 441 at its Verkhotina joint-venture project in northwestern Russia.

A total of 10.8 tonnes of core (112-mm in diameter) from holes 79, 86, 91, 114, 117 and 123 produced 6 carats of commercial diamonds (those greater than 1 mm), for a combined grade for both the crater and diatreme facies of 0.56 carat per tonne. Based on these holes, the diatreme grade is 0.93 carat per tonne, with one hole averaging 1.71 carats per tonne.

Overall, about 33 tonnes of kimberlite have been recovered from 9,500 metres of core from 39 vertical holes. The material processed to date — roughly 25 tonnes — averages 0.68 carat per tonne with a diatreme grade of 1.2 carats.

Archangel says that the first part of its mini-bulk sampling program — the processing of material from hole 49, its first wide-diameter (1.2 metre) hole — has been delayed due to fuel shortages and extreme cold.

Nevertheless, more than 90% of the material from hole 49 has been processed, producing 65 tonnes of sample material from the crater and 64 tonnes from the diatreme. The sample yielded 10 stones averaging 1.04 carats each. One stone, weighing 1.57 carats, is the largest recovered from the pipe to date.

Preliminary results (as reported by the subcontractor, but still to be confirmed by Archangel) indicate a crater grade of 0.3 carat per tonne and a diatreme grade of 1.29 carats per tonne.

Including diamonds from the delineation program, a total of 123 carats have been recovered from Pipe 441 in stones measuring greater than 1 mm. For the project to date, nearly 4,000 stones greater than 0.5 mm in diameter have been recovered.

Drilling of a second wide-diameter hole is complete, with results expected in March. Meanwhile, a third wide-diameter hole is to be drilled shortly.

Work is also under way on an angle-drilling program designed to provide geotechnical information about the pipe.

A prefeasibility study, including an initial resource estimate, is to be prepared by New York City-based Task Holdings before April.

In August, Archangel terminated its involvement in its other Russian diamond venture, the Windy Ridge project, citing “insignificant results” from a grassroots exploration program in the Onexhesky and Plesetsk districts of northwestern Russia. Archangel had the right to earn a half interest in the project from the Russian company Research Institute Horizon.

During the early summer of 1997, Archangel management rebuffed a dissident proxy action by Archangel director Andrew Malim, who sought to remove Chairman Franco Boulle and President Alex Budzinsky from their positions during the annual meeting on July 31.

Prior to the meeting, Archangel and Malim said that they had reached an “amicable agreement” on a slate of directors — a slate that did not include Malim.

Also during the summer, Boulle resigned as chairman, to be replaced in a non-executive role by Budzinsky, who, in turn, was replaced as president by Timothy Hadden in November.

In September, Archangel completed a second tranche of 560,000 special warrants and an additional offering of special warrants for gross proceeds of $700,000 and $625,000, respectively, to bring the total gross proceeds of special warrants sold since August 13, 1997 to $3.75 million.

Each special warrant entitles the holder receive one share and one-half of a share purchase warrant. One warrant allows the holder to purchase one share at $1.70 for two years.

The company says the proceeds will be used for the work program at Verkhotina, where Archangel holds a 40% interest. State-owned Arkhangelsk Geologia holds the remainder.