DIAMOND PAGE — BHP eyes Caledonia’s property — Major plans exploration to test diamond potential

Major mining companies appear to be taking a keen interest in the Zambian exploration portfolio of Toronto-based Caledonia Mining (CAL-T).

Earlier this month, the Zambian subsidiary of Cyprus Amax (CYM-N) offered to fund exploration of a portion of Caledonia’s Kadola licence on the southern extension of Zambian’s copper belt. This land package encompasses a portion of the Lower Roan formation, which hosts most of the major copper deposits in the country (T.N.M., May 12/97).

More recently, BHP Minerals signed a letter agreement in relation to Caledonia’s wholly owned Mulonga Plains property in western Zambia. The 39,610-sq.-km property is adjacent to the diamond-producing regions of Angola.

BHP and Caledonia plan to carry out a reconnaissance sampling program to determine the extent to which the Angolan craton underlies the property. This will entail regional-scale stream and sediment sampling for diamonds and other indicator minerals, and will be fully funded by BHP. Caledonia is already sampling the area for gold and other minerals.

BHP has until October of this year to inform Caledonia if it wishes to form a joint venture to earn between 60% and 80% of the Mulonga Plains property.

This would require the major to fund the project through to a feasibility study.

BHP and Caledonia already are partners at a diamond project in Canada’s Northwest Territories, situated just 30 km from the major’s joint-Venture mine project at Lac de Gras.

In other news, Caledonia announced that its Malawian subsidiary has signed a letter-of-intent allowing Rare Earth Extraction Company to earn a half interest in its rare earth project in that southeastern African country.

Caledonia holds 100% of the Kangankunde prospecting licence, which covers a rare earth deposit, 50 km northwest of Zomba. The 8.4-sq.-km licence covers a carbonitite complex enriched with rare earth-bearing monazite, strontianite and ankerite. Previous trenching and drilling is reported to have indicated the presence of two areas with a high concentration of monazite.

Rare Earth Extraction can earn a 50% interest in the project by spending US$500,000 within two years and producing a feasibility study.