Monroe Minerals sells alluvial diamonds for US$770 per carat

Vancouver–Monroe Minerals (MMX-V) sold its first parcel of diamonds from pre-production at its London alluvial diamond project in South Africa. A total of 177.7 carats sold for US$770 per carat, for a gross proceeds of US$137,180.

Included in the parcel was a 15 carat diamond which sold for US$2,210 per carat and a 6 carat, intense yellow diamond which went for US$5,070 per carat. The diamonds were sold by sealed bid tender conducted through the facilities of Hermiene and Martin Tyler at Orange West Coast Diamonds, in Kimberley, South Africa.

“We are absolutely delighted with this sale,” said Derek Moran, President and CEO of Monroe Minerals. “The average price per carat is almost double our expectation. The sale consisted of 142 diamonds representing an average stone size of 1.25 carats. The excellent price is due mainly to the high average stone size, 25% ahead of expectation. In addition, the presence of the intense yellow diamond was a special bonus. However, despite this result, we do not intend to revise our expectations until we have recovered 2,000 carats.”

Monroe has delineated a mineral resource of diamondiferous gravels at its London project, located in the Northwest Province and is conducting a long term feasibility test that simulates full production conditions. The junior is currently processing Rooikoppie gravel that has an expected grade of 0.7 to 1.3 carats per hundred tonnes (cpht). The average stone size is estimated at 1 carat valued at US$400 per carat.

Situated southwest of Johannesburg, the 21.2-sq.-km London property is the company’s first alluvial diamond mine. A feasibility study, which is currently under way, entails simulating full-production conditions — an accepted practice in the South African alluvial diamond sector.

The London project’s estimated resource comprises 467,000 tonnes of calcreted gravels averaging 1 cpht plus another 720,000 tonnes of Rooikoppie gravel running 0.6 cpht. Another 5.9 million tonnes are classified as inferred resources, and 5.3 million of those tonnes are estimated to grade 0.6 cpht.

Monroe acquired the right to prospect and mine diamonds at London for 10 years (until Jan. 21, 2009) from Meytheron. In return, Meytheron retains a 14.5% royalty calculated on gross revenue. Monroe is also responsible for a monthly rental fee of R10,000. The property is also subject to a 1.5% after-pay out net profits interest payable to an individual who assisted in negotiations with Meytheron.

Monroe can extend its rights to London by 10 years by securing a mineral lease on the property. The company also has the right of first refusal on the sale of the surface rights to the property.