Diamond News Roundup — United Reef plans May production

Diamond production is scheduled to begin next month on United Reef’s (TSE) Bamingui property in Central African Republic (CAR).

The advancement of the project has been facilitated through a previously announced agreement with Trans Hex Group, South Africa’s second-largest rough diamond producer.

Under the agreement, Trans Hex has supplied a diamond recovery plant and earth-moving equipment, together with cash advances which United Reef has secured through the issuance of a $4-million convertible debenture.

The diamond recovery plant was designed and built in South Africa by Trans Hex. It will operate at a run-of-mine rate of 30 tonnes per hour, and is projected to recover more than 1,000 carats of diamonds per month (initially), once in full production.

Gravel resources in the Bamingui River area are estimated at 451,321 carats. However, these resources represent only 4% of the total property area. Preliminary sampling along the Bangoran River, 8 km north of the Bamingui, identified a potential gravel resource of 958,800 bank cubic metres, which are estimated to contain 200,000 carats.

The modular plant and equipment are being trucked to the property from Bangui, CAR’s capital. Once on site, the plant will be erected and commissioned by Trans Hex employees.

Elsewhere Overseas

* Southern Africa Minerals (TSE) has completed 27 reverse-circulation drill holes on its Molopo property in Botswana. Of these, 21 intersected kimberlite pipes, whereas four re-tested known kimberlite bodies.

Samples from the drill holes are being processed in South Africa. Three of the first five samples evaluated have returned a total of eight G10 garnets.

In addition, several samples are also being evaluated for diamonds using acid dissolution extraction techniques. Diamonds have been visually reported in seven of the first 15 samples analyzed.

At least 10 more holes are planned for the Molopo project. Once these are completed, 45 geophysical targets will be drill-tested on the Lekgodu, Kokong, Mabuasehube and Mosomane licences.

* Drill-testing of the Oxbow No. 5 target on Redaurum’s (TSE) Konkiep River alluvial diamond property in Namibia has confirmed the presence of a well-defined paleo-river channel containing a basal gravel horizon. The gravel is mid-to-late Tertiary in age and is characteristic of the deposits farther downstream on the lower Orange River, which are well-known for their high-quality diamond production. Overburden varies from 8 to 15 metres.

Redaurum personnel have also located two high-level terraces which are clearly underlain by channel gravel of the same age and elevation as that discovered in Oxbow No. 5. The overburden at these sites appears to be less than 3 metres thick, and the river gravel here will be more accessible for bulk-testing than at Oxbow No. 5.

* TNK Resources (CDN) reports that the interpretation of the integrated magnetic data base from its Gope Prospect in central Botswana has yielded a total of 159 targets. The 40 to 50 priority targets will be followed up with helicopter-borne magnetic surveys. Upon their completion, ground electromagnetic surveys will be carried out to refine and characterize the individual responses. The Gope Prospect consists of eight exploration licences which are wholly owned by TNK.

Elsewhere in Botswana, 11.4-cm-diameter core drilling has commenced on Midswana Diamond Exploration’s Middlepits diamond prospect. Midswana is 70% owned by TNK.

Middlepits straddles a major northeast-trending structure which hosts the Jwaneng and Venetia diamond mines. The drill program is designed to test up to 12 targets, including the known Kolonkeweng pipe.

* Vancouver-based Teck (TSE) intends to step into the diamond hunt by forming a joint venture on Canabrava Diamond’s (VSE) project in Brazil.

Last year, Canabrava initiated a $2-million exploration program on its 23 properties, which comprise 748,900 hectares. Follow-up ground work on 100 of 600 high-priority geophysical targets has identified kimberlite-lamproite vent complexes. To date, 10 clusters of kimberlite pipes are believed to be the source for alluvial diamonds recovered from historical diggings.

Exploration work has also identified nine platinum targets. Outcrop samples have returned peak values of 4.5 grams platinum per tonne and 0.5 gram palladium. The project is 400 km southeast of the capital city of Brasilia.

Under an agreement, Teck can earn up to a 70% interest in the project by spending US$10 million on exploration and paying US$2 million during the next five years, as well as by completing a bankable feasibility study.

The agreement is subject to a 45-day due diligence review and regulatory approval,

Teck will also buy, through a private placement, 750,000 shares of Canabrava at $3 per share. A half warrant will be included with each share; one full warrant will entitle Teck to buy one share at $3.75 for up to 18 months.

Southwestern Gold (TSE) is Canabrava’s largest shareholder, owning 51.8%.

Northwest Territories

* Designed to collect mini-bulk samples, a large-diameter (15-cm) drill program continues to test the A-154 kimberlite pipes near Lac de Gras.

The Diavik diamond project is owned 60% by Kennecott and 40% by Aber Resources (TSE). To date, five large holes have been drilled in the A-154 South pipe, and two in the A-154 North pipe. Aber expects to drill two more holes, in the South pipe, before spring breakup.

All the core is being processed at Kennecott’s diamond recovery plant in Yellowknife. Diamond processing of the third hole, LDC-6, returned 29 carats from 6.28 tonnes of kimberlite for an average grade of 4.6 carats per tonne.

For the 18.95 tonnes that were recovered from the first three holes drilled in the South pipe, an average grade of 4.78 carats per tonne was reported.

Core from holes drilled in the North pipe returned 18.1 carats from 8.1 tonnes for an average grade of 2.2 carats per tonne for hole LDC-4, and 10.5 carats from 4.8 tonnes for an average grade of 2.1 carats per tonne for LDC-7.

Caustic fusion analysis on 387.3 kg of kimberlite from A154-12, a small-diameter delineation hole drilled in the South pipe, yielded 301 microdiamonds and 204 macros. Fifty-one of these were greater than 1 mm in one dimension, and one of the recovered stones weighed 1.45 carats.

After analyzing the final results of the large-diameter drilling, Kennecott will decide whether or not to proceed with underground bulk-sampling.

Meanwhile, delineation drilling continues on the A-21 pipe. The joint venture expects that complete fusion results will be available sometime in May.

In an effort to firm up targets for diamond drilling, several high-priority targets are being followed up with geophysical surveying. A reverse-circulation drill rig is attempting to locate the source of the A-369 (Creek) indicator mineral anomaly.

* Ashton Mining of Canada (TSE) intends to begin a 2,300-line-km, airborne, geophysical survey over the 42,000-hectare Noront 1 claim .

The property is 40 km southwest of Mountain Province’s AK ground and 23 km from the Camsell Lake discovery. Pure Gold Resources (TSE) is earning a 40% interest in the Noront 1 property, which is currently held 75% by Noront Resources (VSE) and 25% by Rusty Lake Resources (CDN).

Ashton can earn a half interest from each of the parties proportionately by funding all future exploration up to, and including, the extraction of 20 tonnes of kimberlite material from any discovery.

Heavy mineral sampling will follow up on a broad, indicator-mineral dispersion fan identified in the northern portion of the property, as well as on positive samples returned from the southern portion