Diamond News Roundup — Soil-sampling work targeted for Misty Lake joint venture

A $350,000 program of soil sampling will be carried out on several kimberlite pipe targets on the Misty Lake property in the Northwest Territories.

Situated next to Mountain Province’s discovery in the Camsell Lake area, the 87,200-hectare property is a joint venture among three parties.

The International Diamond Syndicate, which is 40% owned by Calco Resources (VSE), 40% by Teryl Resources (VSE) and 20% by Agate Bay Resources (VSE), will hold a 16% interest in the property upon vesting; Major General Resources (VSE) will hold 24%; and SouthernEra Resources (TSE) will hold 60%.

Drilling earlier this year on eight magnetic targets failed to intersect any kimberlite.

Elsewhere in the Northwest Territories

* Subject to a positive feasibility study and receipt of necessary permits, production at the N.W.T. Diamonds project will begin late in 1997.

Dia Met Minerals (TSE) reports that the environmental review panel hearings are progressing and recommendations are still expected late this year. The project, situated near Lac de Gras, is expected to employ more than 650 people, almost a quarter of whom will be from First Nations villages.

Dia Met has a 29% interest in the project, while BHP Minerals Canada holds 51% and private individuals share the balance.

* Exploration will resume on the Barnston Lake property of SouthernEra Resources and Noble Peak Resources (ASE) under an option and joint-venture agreement with Monopros, the Canadian subsidiary of De Beers Consolidated Mines.

Situated 10 km south of a known diamond-bearing kimberlite pipe and 30 km west of another, the property is known to host several trains of kimberlite indicator minerals and untested geophysical targets. No drilling has been carried out thus far.

Monopros may earn a 53% interest in the 92,200-hectare property (which is 60% owned by SouthernEra and 40% by Noble Peak). To do so, it must spend $5 million on exploration before June 30, 1999, including $1 million before June 30, 1996.

Monopros can earn an additional 10% interest by financing all preproduction costs of the first mine developed on the property.

Overseas

* Three diamond mining licences put out for tender by the Russian Mineral Licensing Board have been awarded to Russian-based Northern Mining.

The areas comprise 25,000 sq. km in a continuous band from the east end of the Kola Peninsula, west to the Finnish border. Northern has held an exploration licence covering roughly the same area since mid-1994, but Russian law requires an open tender process before full exploitation rights are granted.

Northern describes the property as having “good long-term potential for development and production from important diamond deposits.” The company is seeking a joint-venture partner for its Kola diamond project. Shareholders of Northern include investment firm Scott-European of New York and several Russian businesses.

* Striker Resources of Australia is buying properties containing five diamond-bearing kimberlites from the Forrest River joint venture of Stockdale Prospecting and BHP Minerals.

The properties, which cover 423 sq. km, are adjacent to Striker’s Beta Creek project in the Northern Kimberley area of Western Australia.

The diamond-bearing kimberlites will be assessed by Striker in the near future to set evaluation priorities, with the aim of establishing commercial feasibility as quickly as possible. Bulk sampling and drilling will be undertaken on the most significant kimberlite targets.

By selling the land, the joint venture receives $300,000, 1.5 million Striker shares and a 2.5% gross royalty from production. Striker will also pay an additional $200,000 if annual production exceeds 100,000 carats.

Sage Resources (VSE), a 53%-owned subsidiary of Striker, will be entitled to a 30% interest in the new properties, pursuant to a “zone-of-interest understanding.”