Randsburg shares soar on diamond news

Randsburg International Gold (RGZ-V) shares shot up on news of its discovery of two diamond-bearing kimberlite pipes in Brazil.

In Toronto on Apr. 5 the Vancouver-based company’s shares skyrocketed by roughly 32% to $3.15 on 385,000 shares.

In all, four kimberlites have been identified at its Victory Strike concessions located in central Brazil’s Goias State.

Coinciding with the positive drill results is the company’s announcement that it has increased the size of its landholdings to 526.6 sq. km from 312 sq. km.

In addition to the positive diamond news, the drill program also hit upon 100 metres of primary sulphides. Companhia Vale do Rio Doce (RIO-N) has copper prospective property to the west of Victory Strike.

Randsburg’s concessions extend around the Verissimo River — a river known as a producer of diamonds for more than 100 years. The famous Goias diamond was discovered there in 1906 and weighing 600 carats, is one of the largest diamonds ever found.

Through its 85% owned subsidiary, Diadem Mineracao the company controls concessions covering three major watersheds draining into the Verissimo River, all of which have been confirmed as containing diamonds.

Local small-scale miners are active in the river.

Randsburg’s chief executive, Michael Opara, was convinced of the prospectiveness of the area by experienced mining veterans Don MacFadyen and Ron Turner. Turner is the general manager of Diadem, and has been involved in the mining industry in Brazil since 1978. Back in 2003, Turner sold Opara on the potential of the area.

“Ron had been persistently looking for the source of the diamonds of the Verissimo River for a number of years,” Opara says. “He needed the funding and I said, ‘okay, we’ll fund you.'”

Initially, Opara raised a modest $10,000 for prospecting the area. By Mar. 27 of this year the company had drilled 16 core holes for a total of 1,917 metres. Six aeromagnetic targets have been drilled as well.

The company says many of its high priority targets were located in the vicinity of the seven macrodiamonds recovered by auger drilling in 2005.

Those diamonds had carat weights of 2.08, 1.79, 1.28, 0.95, 0.85, 0.47, and 0.05 totaling 7.46 carats. They were taken from 936 kilos of material taken from 39 auger holes.

With the positive drill results the company now plans to drill beyond its original plan of 2,000 metres.

Opara says Randsburg has the funds necessary to drill its “high priority” targets. He says the next phase of drilling will be finished in roughly two months.

After such drilling is completed the company will focus on setting up its 3.5 tonne an hour diamond processing mini-plant.

Beyond diamonds, Randsburg is exploring for titanium, iron, precious and base metals, and platinum group metals in Brazil, Canada and Nevada.

However, with the recent results in Brazil, Opara concedes that diamonds have become the company’s main focus.