DIAMOND PAGE — Redaurum to dispose of mining assets

Toronto-based Redaurum (RRK-T) is leaving the diamond mining business.

The company says it has decided to sell its interest in all three of its producing diamond mines because “the full value of current assets is not being recognized.” A new management team is being assembled.

According to a release, proceeds from the sale will provide opportunities to increase shareholder value.

Redaurum, which intends to change its focus to exploration and development, holds a half interest in the River Ranch mine in Zimbabwe, as well as 80% of the Avontuur mine in South Africa and 100% of the Kelsey Lake mine in Colorado.

Sixty-five per cent of the diamonds produced at Kelsey Lake are of gem quality, and almost half of those are greater than one carat. The average sale value of the stones up to mid-1997 was US$173 per carat.

Kelsey Lake is believed capable of producing 600,000 tonnes per year over a mine life of 15 years.

Annual capacity at River Ranch is 1.5 million tonnes; the mine will have produced about 600,000 carats in 1997.

At Avontuur, 93% of the stones are of gem quality.