GLOBAL SEARCH FOR DIAMONDS — DiamondWorks markets Angolan diamonds

Diamonds from Angola are reputed to be among the most beautiful and valuable in the world. The African nation is the fourth-largest producer of diamonds and ranks second in terms of value per carat, following its neighbor, Namibia.

Management of DiamondWorks (DMW-T) no doubt hopes this reputation of excellence in quality, color and clarity will be upheld in the market place as it begins selling parcels of diamonds from its alluvial concession in northeastern Angola.

This month, at its inaugural sale in Antwerp, Belgium, the Vancouver-based junior will be offering a parcel of some 10,000 carats of diamonds recovered from the Luo concession.

Among the parcel of stones offered will be a 33.59-carat, gem-quality diamond. In addition to this white octahedron, the parcel will include 27 other high-quality diamonds larger than 10 carats. Two of these are larger than 27 carats.

DiamondWorks began commercial production at the Luo concession in mid-July of this year. Since then, production rates have averaged 150 carats per day.

Production is expected to increase now that modifications have been made to the diamond recovery plant.

The newly modified plant has been operating at hourly rates of up to 45 cubic metres of alluvial gravel — well above its designed capacity of 35 cubic metres.

Meanwhile, the company continues to drill the Camagico and Camatchia diamond pipes at the Luo concession. At Camatchia, 20 holes are to be drilled on a 50-metre grid. The drilling is intended to detmine the grade of the pipes and to delineate their size.

Some 100 km north of the Luo concession, at the Yetwene diamond concession, Bateman Engineering is building dense media separation (DMS) and pre-wash plants.

Alluvial mining at Yetwene is expected to begin in the first half of 1998.

Once full production is achieved, the company’s combined monthly production of diamonds from the Luo and Yetwente concessions is expected to reach 14,000 carats.

Angola’s potential for valuable diamonds has induced numerous companies to explore and develop projects in the country. The list includes De Beers Consolidated Mines, Ashton Mining of Australia, and one of Russia’s largest producers.

DiamondWorks also has diamond projects in Sierra Leone, though recent unrest there has disrupted exploration efforts. The properties in the West African nation include the Koidu kimberlite pipe in the Kono district and four alluvial concessions. Koidu hosts two main pipes, a system of kimberlite dykes and a ring structure. The two pipes were mined in the past, when 60% of its stones were classified as gem quality.

Remaining reserves and resources are estimated at 7.6 million tonnes grading 0.352 carat per tonne. In addition, DiamondWorks reports an inferred resource of 5.4 million tonnes of similar grade. The diamonds are said to be of excellent quality, with an estimated average value of US$300 per carat.

DiamondWorks will operate the project and hold a 60% interest. The government holds 30%, while local interests hold the remainder. The latest phase of work includes the mining of a 20,000-tonne bulk sample.

DiamondWorks also is exploring for diamonds in Canada’s Northwest Territories, and it remains one of the largest landholders in the Kilometre 88 gold district of Venezuela.