THE DIAMOND PAGE — Vancouver junior buying into South

An option agreement sets the stage for Diamond Fields Resources (VSE) to become the first Canadian company to acquire mining assets in South Africa since a new constitution was approved in that country.

The constitutional change led to the removal of economic sanctions by Canada and the U.S.

Subject to an independent due diligence review, the junior has the right to acquire a 66.7% controlling interest in two producing kimberlite diamond pipes in the Kimberley region. Details of the transaction will be released when the due diligence is completed, by year-end.

Both mines have a history of profitable production under their respective private ownerships. Diamond Fields has received geologic opinions which indicate the mines have sufficient tonnage to produce for 20-40 years at expanding rates of production. Currently, the pipes are being mined to only 150 metres of depth, while others in the district are mined to 1,000 metres. The company plans to consolidate management of the mines and expand production by upgrading existing facilities and equipment over three years. Diamond Fields is also involved in a diamond concession in Namibia. Joint-venture discussions with a major are ongoing, the objective being to advance the coastal project toward development. It is currently undergoing a pre-development, sea-floor survey.

Elsewhere Overseas

* Another junior active in a diamond venture in Africa is Verdstone Gold (VSE), which has appointed Wayne Fipke to its board of directors. Fipke served as president of Dia Met Minerals from 1989 to 1992.

Verdstone can earn 60% of a diamond concession in Mali, West Africa, and plans to begin work in several weeks. Surface sampling, trenching and diamond drilling will test known kimberlite pipes and 11 defined targets. The company will also explore for other kimberlite pipes and alluvial diamonds. A French company spent $8 million on initial work in the Kenieba area but found no pipes with obvious economic

potential.

Verdstone is also exploring for diamonds in Alaska, where the targets are believed to be lamproites, rather than kimberlites.

* Also in West Africa, the Casierra Diamond Syndicate, which is 26.7% owned by Midas Minerals (TSE), has been granted a prospecting licence for alluvial gold and diamonds. The licence covers 19 sq. km of the Hima section of the Sewa River in Sierra Leone, where testing of terraces by the country’s Geological Survey has yielded diamonds up to two carats in weight. Work will begin in January.

Midas has an option, once a production decision has been made, to increase its interest to 41% and become the operator.

Northwest Territories

* Outside of the current bulk-sampling programs of BHP Minerals-Dia Met and Kennecott, diamond exploration activity in the Territories is winding down for the Christmas season. This time of year affords almost no daylight, and the snow is not yet thick enough to cover and insulate the water lines required for drilling. Nevertheless, the pace of activity is expected to pick up by late January.

* Caledonia Mining (TSE) has begun analyzing beach, stream and till samples from its Coronation Gulf and Bathurst Inlet properties.

The first stage of analysis, expected to last 2-3 months, will examine the plus-1-mm-size fraction, from all the river and coastal samples, for macrodiamonds. Then the minus-1-mm-size fraction, from all samples, will be analyzed for microdiamonds and indicator minerals. (The samples are being processed at the Saskatchewan Research Council laboratory in Saskatoon.) Ontario and Quebec

* Consolidated Gold Hawk Resources (ASE) has moved a drill onto its 50%-owned property in Duplessis Twp., just west of Quebec’s Le Tac Twp. The company plans to drill an 800-ft. hole to test an isolated circular magnetic, thought to represent a kimberlite. Soquem holds the remaining interest. * At another Le Tac property, Wiscan Resources (TSE) will soon work on selected targets. At least 15 holes will be drilled to test several isolated, elliptical, magnetic anomalies.

Nine of these are held in a joint venture with Storimin Exploration (ASE), Murgor Resources (VSE) and Consolidated Goldhawk Resources; the remaining six are entirely held by Wiscan.

After freeze-up, geophysical surveys will be carried out over several areas previously inaccessible.

* Blue Emerald Resources (VSE) has bought a 40-claim block in Benoit and Ruette twps., Que. In return, it has issued 100,000 treasury shares. The property covers several discrete bull’s-eye airborne magnetic anomalies. * William Resources (ME) has arranged a private placement of 50 units to raise $337,500. Proceeds will be used to complete a 1,500-metre drill program on the Lac Olga gold property and 600 metres of drilling on the Diatac diamond property. Both are in northwestern Quebec. Diatac covers 2,032 hectares in 10 townships, within 40 km of Le Tac Twp.

The company also hopes to raise $3 million, in a separate transaction, to finance gold and diamond projects in Venezuela and Guyana.

* Findore Minerals (CDN) plans to offer 50 flow-through units to raise $146,900. This will enable it to continue exploring the AK-47 kimberlite pipe near Kirkland Lake, Ont.

* Lakefield Research, a division of Falconbridge, plans to double its microdiamond sample processing capability by early January. Eventually, the caustic fusion laboratory, near Peterborough, Ont., will be processing 900 kg of drill core per week.

United States

* Eight of the 29 pipes on Marum Resources’ (ASE) holdings in Montana have been identified as kimberlites. Six other pipes have been tentatively identified as mica peridotites with lamproite characteristics. The company plans to open a diamond sample processing lab in Calgary, Alta. * Partners Ashton Mining of Canada (TSE), Dow Chemical, and Crystal Mining of Australia are exploring for diamonds in the Michigan-Wisconsin area. Since the project began in 1992, 14 kimberlites have been located and tested by drilling. Diamonds have been discovered in seven of these pipes, but so far none of the bodies has proved economic.