Vaaldiam joins diamond producer club

Vancouver — Vaaldiam Resources (VAA-T, VAAFF-O) has commissioned its Duas Barras diamond mine in Minas Gerais state, Brazil, recovering its first batch of stones from the alluvial operation.

The mine is processing diamondiferous gravels deposited along the Jequitinhonha River and is forecast to produce about 25,000 carats for the remainder of 2007 and then about 50,000 carats annually for several years.

Vaaldiam is fine-tuning its recovery plant and expects to soon ramp up operations to the design capacity of 80 bank cubic metres of gravel per hour.

Earlier this year, the company engaged a contract mining group to pre-strip, excavate and haul the pay gravels at Duas Barras using three excavators and a fleet of several trucks, each of which has a 15-cubic-metre (27 tonne) capacity.

The alluvial deposit contains an indicated resource estimate of 3.3 million tonnes averaging 9 carats per hundred tonnes for about 295,000 contained carats plus some minor gold. An additional 1.5 million inferred tonnes were also tabled at the same diamond grade for about 137,000 contained carats.

Last September, Vaaldiam received a US$197-per-carat valuation for a diamond parcel of 169.15 carats. The largest stone was a white dodecahedral weighing 4.66 carats and assigned a US$1,395-per-carat value. Another 24 diamonds (weighing a total of 33.23 carats) fell in the 1- to 4-carat size range with an average value of US$354 per carat.

Based on the valuation and anticipated 50,000-carat per year output, Vaaldiam projects gross annual revenue of nearly US$7.7 million or about US$4 million on a net after-tax basis from Duas Barras.

Vaaldiam’s new mine is located about 30 km downstream from Mineracao Rio Novo’s Domingas alluvial diamond mine, which recently closed. Domingas, which opened in 1988, was reported as one of Brazil’s largest diamond operations with production estimates of up to 100,000 carats annually and reported average diamond values similar to Vaaldiam’s.

Besides Duas Barras, Vaaldiam also has interests in a pair of advanced-stage diamond projects in the country.

It holds 49% of the Pimenta Bueno property located in Rondonia state, along with 51% joint-venture partner Rio Tinto (rtp-n, rio-l). Exploration has identified a number of diamondiferous kimberlite pipes and a mini-bulk sampling program is planned this year on four of the kimberlites.

Vaaldiam also plans a 5,000-tonne kimberlite bulk sample from its Brauna project in Bahia state. Four identified diamondiferous kimberlite pipes on the project are associated with a kimberlite dyke system traced for over 15 km.

Earlier this year, Vaaldiam acquired Majescor Resources’ (maj-v, rsmjf-o) 40% interest in Brauna, becoming the sole owner of the project.