Partners recover gems from K5 kimberlite

Drilling has yielded diamonds from the K5 kimberlite body at the Aredor concession in Guinea, reports Trivalence Mining (TMI-T).

In December, partner Rio Tinto (RTP-N) drilled three reverse-circulation holes into the pipe to extract 8.4 tonnes of rock chips. The largest stone recovered weighed in at 0.38 carat and came from a 35-metre section of hole RC006 that began 57 metres down-hole.

One of holes also passed through the kimberlite to end in granite. The revelation will facilitate the pipe’s definition.

Additional drilling will be carried out once another target close to the K14 kimberlite is drill-tested. So far, the target has revealed itself as a kimberlite body that extends to at least 92 metres below the surface.

Samples from the K14 and K7 kimberlites are being processed. All of the nine holes drilled in the latter intersected kimberlite to provide 10 tonnes of rock chips.

Between April and May, Rio Tinto sank 2,330 metres into six electromagnetic anomalies and two known kimberlites. The K5 kimberlite is centrally located on the concession and is one of four pipes that occcur within 600 metres of each other. The cluster lies immediately south of areas being mined by Trivalence for their alluvial gems, which typically fetch between US$450 and US$500 per carat.

Rio can earn a 53% stake in any kimberlite bodies that it advances to production. So far, the major has spent US$3.5 million on this endeavour.

Meanwhile, in Botswana, Rio has completed a program of data compilation and orientation surveying at Trivalence’s Kokong property. Also, a 2000 aeromagnetic survey has been re-interpreted, resulting in the selection of 50 priority targets from a total of 96 identified.

Rio has already identified seven targets for follow-up drilling and plans to select another 13 for the initial campaign. Ground geophysics and surface geochemistry will be carried out during the selection process.

Previous operators at Kokong identified 31 kimberlite bodies and determined that 15 were diamondiferous. Indicator minerals were also found strewn across the property.

Rio can earn a 65% stake in the Kokong property by spending US$3.5 million on exploration. Another 10% can be acquired in exchange for a feasibility study that costs at least US$5 million to complete.

In the three months ended March 31, Trivalence earned $876,772 (or 5 per share) on revenue of $7.1 million, compared with a loss of $1.4 million (8 per share) on $3.3 million in the similar period a year ago. The turnaround reflects higher production and sales volumes from the Aredor alluvial mine.

For the nine months ended March 31, Trivalence posted a loss of $1.7 million (10 per share) on $11.1 million. The loss reflects a drop in worldwide demand for diamonds in the two previous quarters and compares with losses of $1 million (6 per share) on $14.1 million in the comparable 9-month period of 2001.

Trivalence owns an 85% stake in Aredor and a 100% interest in the Palmietgat alluvial diamond mine in South Africa. Combined, the two produced 15,284 carats in the recent quarter and 51,147 carats in the 9-month period.

Trivalence sold 20,091 carats at US$351 per carat in the recent quarter, or 122% more than a year ago. A total of 67,053 carats was sold at US$146 per carat in the 9-month period, or 30% less than a year earlier.