DIAMOND PAGE — Canabrava busy in Brazil

With the ink barely dry on their option agreement, partners SouthernEra Resources (SUF-T) and Canabrava Diamond (CNB-V) have begun exploration at the latter’s 480,000-ha namesake diamond project in southeastern Brazil.

Under the deal, signed last month, SouthernEra can earn a half-interest in the project by spending either US$20 million on exploration over seven years or US$15 million over the same period, plus a subscription for $1 million in Canabrava shares by Dec. 10. In the first two years, SouthernEra must spend US$1.5 million. It can earn an additional 20% by satisfying other conditions.

The property sits on the southwestern edge of the Sao Francisco craton of the Cretaceous-aged Alto-Paranaiba Igneous province, which is considered prospective for both primary and alluvial diamonds.

Current efforts are focused on pipes and streams from which kimberlitic indicator minerals have been recovered. Previous operators discovered more than 100 kimberlite pipes, although only eight were tested for diamonds. Local farmers continue to extract gem-quality stones from rivers on or near the property.

Drilling or pitting is expected to follow this first phase of exploration.

SouthernEra continues to compile data from a 1992 airborne geophysical survey that identified more than 500 anomalies.

In South Africa, SouthernEra has increased resources at the Leopard fissure of its wholly-owned Klipspringer diamond property. The fissure’s volume now stands at 4.6 million tonnes, and recent bulk mining indicates an in situ grade of 73 carats per 100 tonnes.

A 1,000-tonne-per-day recovery plant is treating Leopard material, and underground development continues. In 1997, a 4,832-carat parcel fetched a net price of US$118.71 per carat.

The Klipspringer property also hosts a 2,000-tonne-per-day plant that processes ore from the adjacent Marsfontein project, in which SouthernEra owns a 40% interest. De Beers Consolidated Mines (DBRS-Q) and its private partners share the remaining 60%.