De Beers joint-ventures Yamba Lake diamond bet

De Beers Consolidated Mines has agreed to joint-venture the Yamba Lake diamond project held by Mill City Gold (VSE) and Tanqueray Resources (ASE).

The agreement, which is subject to a due diligence exercise, calls for De Beers to evaluate the project area and five previously discovered kimberlites. Yamba Lake is in the much-explored Lac de Gras region of the Northwest Territories.

Roger van Eeghen, spokesman for De Beers, says the organization is keenly interested in the diamond potential of Canada’s North and in the possibility of having a diamond mine in the region.

“It is nice to have one’s own production, but we are also interested in marketing diamonds from other mines if they prove to be viable,” van Eeghen says. “Canada is looking very interesting.”

As part of the due diligence, to be completed within 45 days, all the concentrate taken from a 22.3-tonne bulk sample from the Torrie pipe will be shipped to South Africa for further analysis. This is the most advanced target identified to date on the Yamba Lake project.

Depending on results from ongoing exploration, De Beers will undertake a feasibility study by the end of 1997 and, should it decide to place the mine into production, the company will arrange financing of up to $500 million. At that point, it will have earned a 51% interest.

De Beers will also subscribe for $2 million in common shares of Tanqueray and $2 million in Mill City at $2.20 per share. De Beers currently holds just under 10% of Mill City’s outstanding shares.

Although results are not yet available from this year’s mini-bulk-sampling program on the Torrie pipe, some results from exploration drilling were released for the Eddie, Sputnik and Sue pipes. Results are expected shortly from the Ptarmigan pipe, discovered during the latter part of this winter’s exploration program.

Two samples from the Eddie pipe, totaling 18.8 kg, yielded two microdiamonds and one macro. Three samples from Sputnik, totaling 33.6 kg, yielded three micros and one macro. No diamonds were found in 15 samples from the Sputnik pipe totaling 154.2 kg. The results were reported by Lakefield Research. This year, additional drilling is planned so as to determine the diamond content of the Eddie, Sputnik and Sue pipes. The summer exploration program began in early July and will involve detailed heavy mineral sampling down-ice from untested geophysical targets. Drilling of specific kimberlite targets will begin in August.

De Beers’ exploration arm in Canada, Monopros, recently opened an office in Yellowknife, N.W.T. Monopros is already involved in several joint ventures with Canadian juniors in the Territories and is also exploring its own large land package in the region, including several properties at the drill stage.