JUNIOR MINING SPECIAL — Globe-trotting juniors expand

Underlying Canada is one of the world’s largest cratons, rendering much of the country prospective for companies hopeful of discovering a major diamond mine. But during the staking rush of the early 1990s, only a handful of companies were able to secure ground in the most prospective region identified to date, the Lac de Gras camp in the Northwest Territories.

This prompted a host of Canadian juniors to head offshore — to South America, Africa, Europe and Asia — in the hope of making their mark in the diamond business. However, not all groups were focused on early-stage exploration projects.

The Leicester project, for example, near Kimberley, South Africa, is a joint venture held 60% by Leicester Diamond Mines (VSE), 20% by SouthernEra Resources (TSE) and 20% by South African-based Beckleigh Investments. In 1992, the partners announced plans to bulk-sample an intermittent diamond producer in South Africa.

The Leicester mine has never been a high-grade producer. As SouthernEra President Christopher Jennings told The Northern Miner a few years ago: “It just has nice gems.”

Early this year, the partners announced results of the first sale of diamonds from the project. The parcel totaled 1,594 carats and was sold by sealed bid in Johannesburg. Total receipts were US$360,344 for an average price of US$226 per carat.

The partners are continuing the bulk sampling and recently reported that grades experienced in the yellow-ground bulk samples were in the range of 2.5-3 carats per 100 tonnes, whereas grades from the deeper-blue ground samples averaged 5.5-6.5 carats per 100 tonnes.

A more recent player in South Africa is Diamond Fields Resources (TSE), a junior which has acquired two producing kimberlite diamond mines in the country.

The company plans to consolidate management and operations of the modest-sized mines and expand production through a 3-stage, 3-year program. This is expected to increase total production for both mines to 135,000 from 26,500 carats per year.

Diamond Fields also acquired a 660-sq.-km diamond concession along offshore Namibia. Diamonds totaling 36,000 carats (of which 95% were gem-quality) have been recovered in prior efforts. The project has attracted the interest of several senior mining groups currently negotiating to participate in the venture.

Diamond Fields has some experience in diamond exploration ventures in Canada and recently announced plans to acquire a company that holds mining leases of kimberlite diamond deposits in the independent state of Sierra Leone in western Africa.

Another Vancouver-listed junior, Namibian Minerals, has been exploring diamond concessions off the coast of Namibia; bulk sampling will follow. Botswana is also attracting the attention of Canadian juniors. The southern African nation had no diamond industry until 1987, when De Beers geologists traced a few indicator minerals to their source. Today, the country ranks as the world’s largest producer of gem diamonds.

Last November, Botswana Diamondfields (VSE) began a

2-year program aimed at evaluating anomalies identified on four exploration licences totaling 6,039 sq. km. in Botswana. To date, more than $3 million has been spent (including work by previous operators), with 150 anomalies identified.

The current program is aimed at evaluating 60 of the potential kimberlite anomalies. The field program includes baseline cutting, geophysics (magnetic and gravimetric) and soil sampling, the goal being to refine targets for drilling to begin this June.

Also active in Botswana is Southern Africa Minerals. The Toronto-listed junior holds 8.7 million acres in four major projects in the country. The properties contain 62 known kimberlite pipes, 13 of which are known to contain some diamonds, plus hundreds of kimberlite targets.

Two Canadian juniors, Caledonia Mining (TSE) and Argosy Mining (VSE), are jointly involved in an African program and recently reported on efforts in Zimbabwe. Eight kimberlites were discovered within the licence area, which brings the total to 18 (including pipes discovered by previous operators). Redaurum Red Lake Mines (TSE) is also involved in a Zimbabwean joint venture, where a $1.1-million program is under way.

Meanwhile, South America continues to pose challenges for exploration companies. Diamonds were first discovered in Brazil in the early 1700s and the country was once the world’s principal source of the gem stones — until the major South African discoveries were made in the 1860s.

But in South America, diamonds have been produced from secondary sources, such as alluvial deposits. Tropical weathering and complex geology have made the search for primary deposits a challenge, but not one so onerous as to discourage exploration altogether.

Several juniors are exploring for primary deposits in Brazil and neighboring Venezuela. The list includes Southern Copper (VSE), which recently announced new kimberlite discoveries, as well as Solomon Resources (VSE) and Yellowjack Resources (VSE).

In the Arkhangelsk region of Russia, where several discoveries of economic interest have been made, a number of Canadian juniors, including Canmet Resources (VSE), has acquired exploration rights. The Russians still control the major discoveries but plan to put the projects out for international tender this year or next.