Etruscan Resources boosts diamond resource in South Africa

For the last four years, Etruscan Resources (EET-T, ETRUF-O), through its 53.7% owned subsidiary Etruscan Diamonds, has been quietly buying up properties in South Africa’s Ventersdorp alluvial diamond district, about 150 km west of Johannesburg.

Now an updated National Instrument 43-101 compliant resource estimate indicates that Etruscan Diamond’s Blue Gum project in the Ventersdorp district contains an indicated resource of 20.5 million cubic metres of diamonds and an inferred resource of 17 million cubic metres of the gems.

The estimate shows an indicated resource in the upper gravel package of 12.76 million cubic metres grading 1.77 carats per 100 cubic metres and an inferred resource of 9.17 million cubic metres at the same grade.

In the lower gravel package, Blue Gum contains an indicated resource of 7.75 million cubic metres and an inferred resource of 7.82 million cubic metres grading 2.85 carats per cubic metre.

“The diamonds that are coming from our project are very high-quality gemstones,” says Don Burton, the company’s chief operating officer. “The average stone size is about one carat and our stones are in the top 2% in terms of quality.”

The resource estimate valued the stones at US$466 per carat. But over the past six months, Etruscan says it has sold its diamonds at an average price of US$545 per carat.

A pre-feasibility study on the Blue Gum project will be completed in April.

Burton notes that as soon as the pre-feasibility study is finished, the company will be seeking a listing for Etruscan Diamonds on the Toronto Stock Exchange and the Johannesburg Stock Exchange.

Blue Gum is made up of three adjacent diamond properties, Nooitgedacht, Hartbeestlaagte and Zwartrand. Together they cover an area in the Ventersdorp district spanning 100 sq. kms.

Etruscan already owns the Tirisano diamond mine on Blue Gum’s Nooitgedacht property, which can treat 50,000 cubic metres of gravel per month.

By the end of February, that figure is forecast to grow to 100,000 cubic metres per month, when four new pan plants are scheduled to come on line.

If mining Blue Gum proves economic, the company envisions open pits about 5 km away from the existing plant at Tirisano.

The Ventersdorp alluvial diamond district covers more than 5,000 sq. km of South Africa. The area has not been commercially exploited on a large scale, the company says, and the district only produced about 667,000 carats in the period between 1926 and 1984.

In addition to its Tirisano diamond mine in the Ventersdorp district, the Nova Scotia-based company also owns the Klipgat diamond mine.

Alluvial diamonds in the Ventersdorp district are found in gravel runs related to paleo-drainage systems that drained generally from north to south.

Many gravel runs are covered by reddish alluvial sandy soil, mainly derived from weathering and erosion of the dolomites. The gravel deposits extend for distances of greater than 12 km, with widths of up to 1,000 metres.

Alluvial diamonds, unlike the majority of stones recovered by the larger diamond companies from kimberlite pipes, retain both their quality and size, giving them a gem stone grading, the company says.

By contrast, diamonds contained in kimberlites are typically smaller stones ranging from 0.05 to 0.5 carats with a high percentage of industrial grade diamonds.

Etruscan is developing the Blue Gum deposit in partnership with the Mogopa Community, the local Black Economic Empowerment (BEE) community, which holds a 26% interest in the deposit.

In addition to diamonds, Etruscan holds one of the largest strategic land positions in West Africa covering more than 10,000 sq km. in the prolific gold belts of Mali, Niger, Burkina Faso, Cote d’Ivoire and Ghana.

The Canadian junior has been exploring for gold and diamonds in Africa for more than 12 years.

In Toronto at mid-day, shares of Etruscan were trading at $2.34, up 4 apiece, on a volume of 65,580.