THE DIAMOND PAGE — Diamond Fields acquires producing pipes

Having completed a positive technical review, Diamond Fields Resources (VSE) is proceeding with the acquisition of a 66.67% controlling interest in two producing kimberlite diamond mines in South Africa.

The Loxton Dal and Frank Smith mines are both in the Kimberley district, home to such famous De Beers producers as the Finsch, Wesselton, Bulfontein and Koffiefontein.

The company intends to consolidate the current operation of both mines and re-equip and modify them. The objective is to expand production at Loxton Dal to 130,900 from 43,640 tonnes per year, and at Frank Smith to 327,000 from 142,000 tonnes per year.

Underground techniques are being used to mine the root zones of both kimberlites. The Loxton Dal kimberlite contains three pipes which range in grade from 35 to 100 carats per 100 tons and which are known for high yields of medium-quality diamonds. The Frank Smith pipe has a lower grade 5 carats per 100 tons) but is known to provide larger, good-quality stones valued at about US$240 per carat. All production is marketed independently and revenues total $4 million.

The expansion program is expected to increase the total annual carat production for both mines to about 100,000 from 26,500. Reserves are believed sufficient for 20 years.

Jean-Raymond Boulle, chairman of Diamond Fields, says several operating improvements will be introduced over the next few years. These include a heavy mineral separation plant for processing, underground modifications and the introduction of more productive mining equipment such as scrapers and electric load-haul-dump machines.

The company has interests in other diamond projects, including a sea-diamond property near Luderitz, Namibia.

Northwest Territories

A diamond discovery was made by the Geological Survey of Canada during the preparation of rock samples being gathered at Gibson Lake, near Baker Lake in the Keewatin district. The team, headed by Allan Miller, was studying the regional geology and mineral resource potential of the district, about 900 km southeast of the Lac de Gras camp.

The microdiamond measured 270 microns in diameter and was found on a property held 50% by Cumberland Resources (VSE). The remaining interest is held equally by Comaplex Minerals (TSE) and Manson Creek Resources (TSE). Cumberland also has a 40% interest in 12,800 hectares west of the diamond occurrence, with the remainder held equally by Gerle Gold (VSE) and Major General Resources (VSE). In this area, the partners have located diatreme intrusives (possibly lamproites) which are being evaluated by heavy mineral analyses for their diamond potential.

Saskatchewan

Although the agreement is not yet official, Kettle River Resources (VSE) plans to earn a 1623% interest in the Tobin Lake diamond project held 50-50 by Consolidated Pine Channel Gold (VSE) and Golden Peaks Resources (VSE). To do so, Kettle River will spend $1.3 million on exploration by the end of 1995. Drilling will begin shortly, upon completion of a geophysical program designed to identify drill targets.

President George Stewart said Kettle River became interested in the Saskatchewan project as a result of recent work by consultant Bram Janse, a well-known diamond expert. The company also has a stake in the Tli Kwi Cho diamond joint venture near Lac de Gras, where senior partner Kennecott Canada is about to begin extracting 5,000 tons of kimberlite for bulk sampling. Elsewhere Overseas

Canmet Resources (VSE) plans to fund exploration, being carried out by two Russian partners, in Arkhangelsk province. State Enterprise

Arkhangelskgeologia is the company’s partner in the Verkhotina area, while RI Horizon is the partner on the Windy Ridge area.

Through a tender process, the Russian partners have obtained approval for two of three exploration areas they sought in the district. The region hosts several advanced diamond projects, none of which is believed to be included in this joint venture.

Canmet director Sukh Athwal said the Verkhotina area contains seven kimberlites, “none of which has been drilled, to my knowledge.” About US$4.5 million has been budgeted for 1994 and work programs will involve reverse circulation drilling followed by bulk sampling. All funding provided by Canmet is to be treated as debt to the joint venture, to be reimbursed out of production.