Diamond exploration heating up in U.S.

American Diamonds and Firestone Diamonds (FDI-L) are joining forces to explore for diamonds in the United States.

American Diamonds is a Delaware-registered company jointly-owned by Dunsmuir Ventures (DW-V) and Majescor Resources (MAJ-V).

United Kingdom-based.Firestone has been conducting diamond exploration in the States for over two years and has narrowed its search to two adjacent States that have not seen kimberlite-focused diamond exploration previously.

Firestone has selectively collected and analysed 768 heavy mineral samples. Over one third of these samples contained kimberlitic indicator minerals and microprobe analyses have identified some minerals originating from the diamond stability field. Trace element analysis indicates a cool geothermal gradient encouraging for diamond stability. Targets have been generated for further work. Some samples have contained in excess of 1,000 indicator minerals grains.

The US project area has focused on 5 states and is subject to a 4% carried interest by two individuals, Howard Coopersmith and Bram Janse, who initially selected the area and who have been conducting exploration to date. Firestone can buy back a 2% carried interest in the project at any time for $US2 million.

Firestone Diamonds is an alluvial diamond producer at two localities in western South Africa.

The 10.5 sq. km Avontuur mine, in Namaqualand, near the town of Hondeklip Bay has total reserves and resources of about 885,000 carats. The gravel treatment capacity is 320 tonnes per day. Diamonds average 0.2 carats in weight. In the year ended June 30, 2003, the mine produced 2,038 carats of diamonds with an average value of $110 per carat. In 2003, a new dense medium separation (DMS) plant was constructed.

Since 2000, Firestone has owned 87.5% of the Oena mine. The mine had not been producing since 1995. The proto-Orange gravels had been mined out, however a further resource has been sampled in younger gravel terraces along the river and the average overall grade is estimated at 0.5 carats per tonne.

The 88 sq. km mining lease covers a 4.8-km wide strip along 17 km of the Lower Orange river. In the 1990s, the Oena mine produced diamonds with an average 2-carat weight; the largest stone recovered was 70 carats. In the year ended June 30, 2003, 1,989 carats of diamonds were produced with an average value of $852 per carat.

American Diamonds will be the operator of the joint venture and has the right to incrementally earn up to 60% of the properties before Firestone will be required to pay any further exploration costs.