Diamond hunt craze spreads to Africa

Riding a wave of investor enthusiasm for diamonds, Canadian juniors are snapping up alluvial concessions in Africa at a rapid-fire pace.

Applauding the move, investors have pushed the shares of many of the players to new highs, with United Reef Petroleums (TSE) quadrupling to $4.60 per share in the final weeks of 1992.

The main area of interest is the Bamingui region of the Central African Republic (CAR), where United Reef has recovered 32 diamonds, thought to be of gem quality, from a 500-sq.-km concession. A systematic sampling program to confirm reserves will begin in mid-January.

Along the same sandstone plateau, Sikaman Gold Resources (TSE) is acquiring an interest in a separate 500-sq.-km property. Sikaman plans to develop the property in conjunction with the Sherwood (NASDAQ) concession next door. Other companies negotiating for ground in the area include Morgain Minerals (VSE), Orcana Resources (VSE) and T&H Resources (TSE).

CAR is the world’s 10th leading exporter of gem-quality

diamonds. An estimated 500,000 carats are extracted by placer mining methods every year from the country’s alluvial deposits.

“The Bamingui region of the CAR is likely to develop into a major diamond exploration rush of the same intensity as that recently experienced in the Lac de Gras area,” boasted one of the juniors.

To the west in Ghana, Teryl Resources (VSE) has negotiated an option to acquire a 50% interest in a 78-sq.-km alluvial concession on the diamond-bearing Birim River.

The property is owned by a private company headed by Sam Sapper, a geophysicist who discovered and developed five gold-diamond placer mines now operating in Ghana.

In Zaire, Wye Resources (CDN) has acquired a 50% interest in a concession along the Kansadisadi River, which flows north from the diamond fields of northern Angola.

Meanwhile, the search by Canadian mineral exploration companies for diamonds at home and abroad continues:

Northwest Territories

— Noront Resources (VSE) has reached an agreement-in-principle to acquire a 50% interest in the diamond rights on the Tundra gold property near Courageous Lake, N.W.T., 50 km southwest of the Point Lake discovery pipe. To earn the interest from joint venture partners Hemlo Gold Mines (TSE) and Total Resources, Noront must spend $300,000 on exploration by Dec. 31, 1993, and an additional $1.7 million by Dec. 31, 1996.

Garden Lake Resources (VSE) says it recently completed staking of an additional 414,185 acres about 100 km southwest of the Lac de Gras discovery. The claims are wholly owned by Garden Lake with no royalties attached, the company says, adding that its property holdings in the area now top 464,000 acres.

Ontario

Crews have started linecutting and magnetometer surveys on one of the properties of East West Resource (VSE) north of Kirkland Lake, Ont. The program is designed to delineate a circular magnetic feature with a 400-metre diameter.

Pyrope garnets and boulders of kimberlite lie downstream of the magnetic anomaly. A drill program to test several targets will begin soon. — By purchasing the interest of BP Resources Canada in a diamond prospect in the James Bay Lowlands, Continental Precious Minerals (ME) has increased its stake in the area of interest to 75%. KWG Resources (ME) can earn a 51% interest by spending $2 million as part of its “Spider 1” program. Continental has acquired a 500-acre claim block covering a geophysical anomaly adjacent to a cluster of kimberlite pipes discovered by Monopros. Drilling will begin shortly.

Arkansas

— Having completed a 26-hole program (maximum depth, 200 metres) on the diamond-bearing lamproites in the Crater of Diamonds state park, a consortium of companies has recommended a second-phase program. The consortium, which includes Kennecott, CRA of Australia, Arkansas Diamond Development and Continental Diamonds, estimates the park contains a resource of about 71 million tonnes.

Under an agreement, Continental Precious Minerals has the right to 25% of Continental Diamonds’ interest in the project.