Rio Tinto takes bulk sample from Aredor project

A field season of exploration at the joint-ventured Aredor concession in Guinea has culminated in Rio Tinto‘s (RTP-N) taking a 500-tonne test sample of the multi-phase K23 kimberlite.

The major can earn an initial 40% interest in the property from Trivalence Mining (TMI-V) by spending US$6 million on exploration and paying a total of US$2 million over three years. A further 13% can be had by completing a feasibility study and paying an additional US$2.5 million. Rio Tinto can then boost its interest to 58% by electing to arrange Trivalence’s share of production financing. A final US$4-million payment will be due when a production decision is made.

Trivalence’s 85%-owned alluvial operations at Aredor are excluded from this deal. The Guinean government owns the remaining 15% of Aredor.

The Aredor concessions comprise 1,012 sq. km, including the drainages and tributaries of the Baoule River, 725 km east of the capital city of Conakry. For the fiscal year ended June 30, 2001, Trivalence recovered 35,126 carats of rough diamonds from the treatment of 781,399 tonnes of alluvial material, off 13.9% from the previous year. The decline is attributed to equipment failures and the mining of lower-grade material.

Alluvial diamond resources at the end of 2000 stood at an indicated 461,282 carats contained in 8.7 million tonnes. An additional inferred resource was estimated at 864,927 carats in 10.4 million tonnes.

Exploration has been focused on the K23 kimberlite pipe, which was discovered by Trivalence in 1999. Microdiamond analysis by Lakefield Research on an initial 98.17 kg of percussion drill cuttings from the discovery hole yielded 11 macrodiamonds and 164 micros (a macro is here defined as exceeding 0.5 mm in at least one direction). A further 89 macros and 603 micros were recovered from an additional 288.4 kg of drill material collected from three other drill holes.

Pan plant

Based on results from 43 percussion delineation drill holes, three-quarters of which intersected kimberlite, the body extends over a distance of 300 by 120 metres. Trivalence processed 12,065 tonnes of weathered kimberlite through its 14-ft. pan plant at Aredor, recovering 1,535 diamonds weighing 484 carats.

The company later sold a 507-carat parcel of gem and industrial-grade diamonds recovered from the bulk sampling and pre-test sampling for US$80,000, giving a value of US$137 per carat for the recovered stones.

After completing 3,240 metres of core drilling in 23 holes on the K23 kimberlite late last year, Trivalence struck an informal joint venture in December with Rio Tinto Mining & Exploration. The deal was made official in August after the Guinean government gave its approval.

In accordance with the terms of the option agreement, Rio Tinto reimbursed Trivalence for the cost of the core drilling and shipped the samples to its laboratory in Perth, Australia, for microdiamond analysis.

Core samples weighing 1,835 kg were processed based on the identification of three phases. Microdiamond analysis yielded the following:

– 389 stones greater than a 0.15-mm square mesh screen size, including six larger diamonds that would not pass through a 0.6-mm square screen, were recovered from 823 kg of phase 1 material;

– 526 micros, including 18 bigger stones exceeding a 0.6-mm square mesh, were collected from 963 kg of phase 2; and

– just 10 micros were recovered from 49 kg of phase 3.

The largest diamond weighed 0.12 carat and was recovered on the 1.7-mm square screen from the phase-2 material.

Surveys

Rio Tinto mobilized crews to the Aredor property in January 2001 and completed a helicopter-supported program of stream sediment-sampling in which 598 samples were taken. Ground geophysical and geochemical surveys were conducted over the K7/19, K21 and K23 kimberlites, as well as over two newly discovered kimberlites, K24 and K25. More than 300 soil samples were collected.

In June, a small diamond drill program spanning 740 metres tested a conductive feature between Kimberlites K23 and K21. No kimberlite was found. Before the onset of the rainy season, Rio collected a 500-tonne bulk sample from the second phase of K23. The bulk sample will be processed by dense media separation at Rio’s sample preparation plant in the village of Kerouane, 40 km east of the Aredor property.

In September 2000, Trivalence began hardrock mining operations at the wholly owned Palmietgat property in the Northern Province of South Africa, 70 km north of Pretoria. The Palmietgat property hosts six kimberlite pipes and several kimberlite dykes. Previous work by De Beers identified a resource of 3.8 million tonnes grading 44 carats per 100 tonnes to a depth of 110 metres in three of the pipes.

By fiscal year-end, Trivalence had processed 134,472 tonnes of kimberlite at Palmietgat and recovered 29,254 carats. Three sales totalling 4,907 carats brought in $488,000.

The company recently completed a private placement of a non-arm’s-length loan of $1.1 million, with interest at the rate of 11% per annum. The loan is secured by a debenture, which provides for conversion of the principal amount into units of the company. Trivalence has 17.3 million shares outstanding.