Glencairn to mine diamonds from placer bet in Brazil

Toronto-based Glencairn Explorations (ASE) is attempting to bring a Brazilian placer diamond operation into production by the second quarter of 1989.

Owned by Mineracao Piracicaba of Rio de Janeiro, Brazil, the Feijao Cru project is located in the Chapada Diamontena mountain range in the state of Bahia. Over the past two years, MPL spent about $400,000(US) to acquire and develop the 19-hectare property which was drilled off by a consortium of Brazilian companies in the 1970s. Following a reverse cirulation drilling program at Feijao Cru, the partners have outlined 537,000 cubic metres of what they call “pay” gravel.

According to President Kerry Knoll, current reserves are sufficient for a 3-year mining operation which is scheduled to begin at a rate of 3,500 cu m per day.

He said a test pit completed in 1987 produced 540 cu m which yielded 669 carats for an average grade of 1.24 carats per cu m. The average selling price in 1987 of diamonds mined from the property was $78(US) per carat.

Glencairn can earn a 50% interest in MPL by spending at least $450,000 on exploration by March, 1989 and finance the property (to a maximum $550,000) to production.

Later this year Glencairn expects to raise $1.25 million through a public issue underwritten by Yorkton Securities of Toronto. Annual revenues from Feijao Cru should be around $5 million, Knoll said.

Meanwhile, with a 3-man operating committee in place, MPL has acquired an adjacent lower grade property which Glencairn said will add 12 years to the project’s mine life.

Bought for about $112,000(C), the Victoria property has estimated reserves of 28 cu m grading an average 0.0167 carats per cu m. The total estimated reserve is 467,600 carats.