Dia Bras eyes Guinean diamonds (November 26, 2001)

Montreal-based Dia Bras Exploration (DIB-V) has reached an agreement with Sagem, a private Guinean company, to earn a 60% interest in the Banankoro diamond permit.

To do so, Dia Bras must pay $50,000 and issue 500,000 shares to Sagem, as well as spend spend US$1 million on exploration and development over two years.

In addition, Dia Bras can earn a half-interest in 10 alluvial artisanal permits in the Aredor concession area (of which Banankoro was once a part) by spending $2 million on exploration and sampling over one year. The deal has yet to be approved by regulators.

The Aredor concession is operated by Trivalence Mining (TMI-V). London-based Rio Tinto (RTP-N) can earn a 58% stake by spending US$6 million on exploration and paying a total of US$2 million over three years. A further 13% can be had by completing a feasibility study and paying an additional US$2.5 million. Rio Tinto can then boost its interest to 58% by electing to arrange Trivalence’s share of production financing. A final US$4-million payment will be due when a production decision is made.

Trivalence’s 85%-owned alluvial operations at Aredor are excluded from this arrangement. The government of Guinea owns the remaining 15% of Aredor.

The Aredor concessions comprise 1,012 sq. km, including the drainages and tributaries of the Baoule River, 725 km east of the capital city of Conakry. For the fiscal year ended June 30, 2001, Trivalence recovered 35,126 carats of rough diamonds from the treatment of 781,399 tonnes of alluvial material, off 13.9% from the previous year. The decline is attributed to equipment failures and the mining of lower-grade material.

Alluvial diamond resources at the end of 2000 stood at an indicated 461,282 carats contained in 8.7 million tonnes. An additional inferred resource was estimated at 864,927 carats in 10.4 million tonnes.

Currently, Rio Tinto is taking a 500-tonne test sample of the multi-phase K23 kimberlite. The K-23 pipe lies less than 10 km from the Banankoro permit.