SouthernEra turns up strong grades at Klipspringer — Company purchases more mineral rights in Northern Transvaal

Diamond yields from recent tests at the Klipspringer project in South Africa’s Northern province are vaulting it into the upper echelons in terms of grade.

Operator SouthernEra Resources (SUF-T) has released the results of drilling and processing of material from the M-1 kimberlite on the Marsfontein farm (SouthernEra 65%, Randgold 35%) at Klipspringer. As of early September, 333.63 carats had been recovered from 107 tonnes of kimberlite, for an average grade of 3.11 carats per tonne. Sixty tonnes have yet to be processed.

The material processed was pulled from depths of 10 to 40 metres. The company notes that it is possible that a minor amount of residual concentration has occurred.

The average stone size is 0.332 carat, and the 10 largest diamonds recovered to date are 9.18, 5.01, 4.83, 4, 3.92, 3.51, 3.44, 3.32, 3.14 and 3.06 carats.

A total of 65 diamonds larger than 1 carat has been recovered, with an aggregate weight of 127.9 carats (38% of total). SouthernEra reports that most

of the diamonds recovered are gem quality, and the overall quality appears to be significantly better than that of the 4,832-carat parcel from the Leopard fissure, which was sold for $US118.71 (net) per carat.

The M-1 kimberlite has been delineated as a vertical pipe, based on 53 reverse-circulation (RC) and percussion drill holes. Kimberlite has been intersected to a depth of 142 metres; the size estimate down to 60 metres is 400,000 tonnes, while the inferred tonnage to 100 metres is about 685,000 tonnes.

Meanwhile, initial processing of kimberlite from the recently discovered Sugarbird Pass kimberlite body (wholly owned by SouthernEra) has resulted in the recovery of a perfect, colorless, 0.15-carat diamond from a small (500-kg) sample of RC drill cuttings.

The new kimberlite has been defined as an elongated body with a strike length of 250 metres, ranging up to 63 metres in width (41 metres on average). A second, narrow kimberlite has been located in a drill hole 200 metres south of the Sugarbird Pass body. A widespread kimberlitic mineral anomaly is present along strike of this new zone.

SouthernEra officials believe the high grade and excellent quality diamonds of the M-1 kimberlite will enable the company to commence low-cost, open-pit mining of the M-1 pipe, and thus obtain early cash flow in 1998. This would also give SouthernEra the necessary time to complete sufficient development in 1998 on the Leopard and Sugarbird fissures to mine them in 1999.

Numerous other kimberlitic mineral soil anomalies remain to be investigated for possible kimberlite pipes in the vicinity of the M-1 and M-3 pipes.

Drilled material from the M-3 pipe will be tested after all material from the M-1 pipe has been processed. At least three circular anomalies lie on an adjoining, wholly owned property.

Valuation of the Marsfontein and Sugarbird blow diamonds will be carried out in Antwerp, Belgium, before the end of this month.

.SNew mineral rights

SouthernEra has exercised its option to buy the mineral rights to the Frankryk and Schietfontein farms from private South African firm AFC (African Finance Corp.). On these two farms occur the major portion of the known strike of the Sugarbird fissure and the entirety of the Sugarbird blow and the newly discovered Sugarbird Pass kimberlite body. The purchase price for the mineral rights to the two farms, which have a combined area of 1,565 ha, is $860,000.

In a transaction related to AFC’s agreement to waive its right to back in to a 10% interest in these farms, SouthernEra has agreed to issue 31,235 shares of SouthernEra to AFC, and to make payments totalling $810,000.

The issuance of shares to AFC as partial consideration is subject to the approval of South African and Canadian regulators.

The purchase of mineral rights on project lands is a necessary step along the way to developing diamond projects in South Africa.

.SAngolan diamonds

Meanwhile, SouthernEra reports that production from gravels in the bed of the diverted Chicapa River at Luo in Angola has, over the course of only two days, yielded 1,135 carats of “superb quality” diamonds. In all, there were 264 diamonds averaging 4.41 carats per stone.

The first day’s production comprised 179 stones weighing 583 carats and averaging 3.26 carats per stone. The largest stones weighed 17, 15.5 and 13.7 carats, with 85 stones weighing greater than 2 carats, 54 stones greater than 4 carats and 8 stones greater than 10 carats.

The second day’s production totalled 85 stones weighing 552 carats for an average of 6.49 carats per stone. Fifty-three of these exceeded 2 carats in weight, 49 exceeded 4 carats and 23 exceeded 10 carats. The three largest stones weighed 26.85, 21.15 and 20.15 carats.

The diamonds described above were recovered from the same pothole (a depression in which diamonds travelling downstream are trapped) from which a

multi-million-dollar, fancy, purple-pink diamond weighing more than 20 carats was recovered in 1996.

Mining of the pothole continues, and, at this stage, SouthernEra is unable to estimate how much gravel at that location remains to be mined.

.SRiverbed gravels

Total riverbed production from Luo in 1997 exceeds 15,700 carats. SouthernEra holds a 10% net profits interest in riverbed gravel production at Luo. The operatorship and majority interest belongs to private South African firm Sphere Trading, while the remainder is held by the Angolan government.

The portable processing plant ordered by SouthernEra for the floodplain terrace gravels at Luo (in which SouthernEra’s net profit interest is 35%, with

Sphere Trading and the Angolan government holding the remainder) is being erected.

SouthernEra, which is operator of the floodplain gravel project at Luo, expects to begin treating the 4,000 tons of stockpiled gravel within two weeks.

SouthernEra and its partners have mined 12,090 carats since October 1996 from prospecting operations on the Chicapa River. All the production has come from pumping operations using tractor-mounted pumps with divers operating suction hoses along a 2-km stretch of the river. Up to July, 8,667 carats had been sold for an average price of US$339 per carat. The net value realized was US$2.9 million.

A deep, 1-km-long diversion canal and a 30-metre-wide earth dyke have been completed at Luo. A bridge across the Chicapa has also been constructed, enabling SouthernEra to begin mechanized mining of the floodplain terrace gravels on the west bank of the river.

Once mining of a small section of already diverted river is complete, the river will be channelled along the new diversion canal to allow 1.6 km of riverbed to be pumped dry in a series of compartments. These compartments will be mined by a combination of mechanized mining and pumping.