Caledonia seeks alluvial diamonds in N.W.T.

With the acquisition of six properties covering 525,000 acres in the Northwest Territories, Caledonia Mining (TSE) has introduced a new twist to diamond exploration in the area.

Pointing to the diamond riches that lie off the west coast of South Africa and Namibia, Caledonia says it will spend between $500,000 and $1 million to investigate the theory that similar alluvial deposits exist along the coast of Coronation Gulf, near Coppermine, N.W.T., and the ancient Bathurst Inlet coastline.

Shares of Caledonia hit a new high of 95 cents compared to a 52-week low of 21 cents following the announcement. At press time, the Mississauga-based junior was trading at 87 cents.

“It is generally accepted that (the South African alluvial) diamonds originated from the erosion, over millions of years, of the upper portions of the diamond-bearing kimberlites in the centre of Southern Africa,” says consultant Richard Garnett. “It is possible that at least as many diamonds may be available for mining from the rivers, coasts and offshore areas of the Northwest Territories as may be produced from kimberlite pipes in the interior.”

Exploration in the Lac de Gras area is still in the early phase, but results to date have prompted several experts to predict that at least one hardrock diamond mine will be developed in the region by the end of the century. Chairman Dennis MacLeod says that, beginning this June, Caledonia will take several 200-lb. gravel samples along the current and ancient coastlines, then move inland along the rivers that make up the 30-million-acre drainage basin over the Slave and Bear Provinces.

In other diamond developments in the Northwest Territories:

— Aber Resources (TSE) says fuel, supplies and drilling equipment have been mobilized to the junior’s camp at Lac de Gras to prepare for a $1.4-million program on its Diavik project.

On the basis of results from airborne geophysics and heavy mineral sampling, 40 targets have been selected for diamond drilling. Ground geophysics on the seven properties will be followed by drilling in the first week of April. — Kennecott Canada has informed Bre-X Minerals (ASE) that it will maintain its option on 14,462 of the 16,693 acres it originally optioned last spring. Saskatchewan:

— Uranerz Exploration and Mining reports that a transport truck carrying kimberlite samples from its Fort a la Corne joint venture with Cameco (TSE) and Monopros was hijacked in South Africa. Although the perpetrators discarded the material — about 5% of the program’s total samples — Uranerz says most of the analytical work had already been completed. The joint venture is redrilling some of the sample locations.

— Winslow Gold (VSE) has arranged a private placement of 305,000 units at 33 cents per unit. Each unit consists of one share and one warrant to buy an additional share at 36 cents to 38 cents for two years. Proceeds of $100,650 will be used to acquire prospective diamond properties in Alberta and Saskatchewan.

Ontario:

— The Ontario government has released magnetic/electromagnetic maps of the Blake River Syncline around Kirkland Lake, Ont.

— To earn a 50% interest in properties owned by East West Resources (VSE) in the Lake Abitibi area, north of Kirkland Lake, Ont., Trade Winds Resources (VSE) has agreed to make option payments totalling $58,750 and spend $1.25 million on exploration over the next two years.

The properties cover five kimberlite targets occurring along the Timiskaming Rift fault system. Ground geophysical surveys to define the airborne anomalies will be followed by reverse circulation drilling.

Overseas:

— Subject to pending exploration permits, Noront Resources (VSE) has been granted an option to earn up to 80% interest in a concession in the Bamingui region of the Central African Republic.

The agreement calls for Noront to earn the initial 40% interest by spending $700,000 over two years, issuing 100,000 shares on signing and 50,000 shares after the completion of each year’s work. At the beginning of the second year, Noront must pay US$50,000.

The junior has also agreed to acquire a 49,067-acre property in the Back River area, near Homestake’s Goose Lake gold prospect, in exchange for $50,000 and 100,000 shares. The vendors retain a 2% royalty. — Wye Resources (CDN) says a range of gem-quality diamonds weighing 1.75-22.5 carats has been recovered from its concessions in Zaire. Wye will proceed with “geological sampling, establishment of a permanent trading post, and the bartering of consumer goods for diamonds.”

— Redaurum Red Lake Mines (TSE) has postponed a shareholder’s meeting to approve the acquisition of Cornerstone investments until the week of April 12, says Chairman Peter Fischer. He says the company is “working hard” to raise the $5 million needed to acquire Cornerstone, which has a 50% interest in the River Ranch diamond prospect in Zimbabwe.