DIAMOND SPECIAL — Canadian juniors seek fortunes in

As the domestic diamond scene matures, more and more Canadian juniors are moving offshore. One of the most popular hunting grounds is Africa, which for most of this century has supplied the vast majority of diamonds to the world market.

Most of the exploration is focused in southern Africa, which is home to a large number of primary (kimberlite-hosted) and secondary (alluvial) diamond mining operations. Although, historically, secondary deposits have been easier to find because they cover large areas, about 75% of today’s production comes from primary sources.

In South Africa, SouthernEra Resources (TSE) is exploring for primary deposits. Near Kimberley, the company is earning a 75% interest in several farms which contain four closely spaced, kimberlitic, heavy mineral anomalies ranging from 500 to 1,500 metres in diameter. SouthernEra plans to drill and sample these targets as soon as the necessary prospecting permits have been issued.

The company also has a 20% interest in the Leicester property, 40 km north of Kimberley. The property has seen sporadic production of diamonds from small-scale open-pit and underground operations since the 1890s. The partners tested the property to determine the feasibility of placing the mine back into production, but results were not sufficiently positive. About 30 km northwest of Kimberley, Sentinel Resources (VSE) is earning a 70% interest in the Klipdrift diamond prospect. The property contains a 2.1-hectare kimberlite pipe covered by diamond-bearing alluvial gravels. Bulk sampling is expected to begin shortly.

On the production side, Diamond Fields Resources (TSE) has a 100% interest in the Loxton Dal and Frank Smith mines near Kimberley. Both mines are primary diamond producers with a long history of profitable production under separate private ownership.

The Loxton Dal mine produces 18,000 carats of medium-quality diamonds per year, and under a proposed expansion plan, production is expected to increase to more than 85,000 carats per year.

At the Frank Smith mine, Diamond Fields hopes to increase annual production to more than 50,000 carats of high-quality stones from 10,000. At this increased rate, the mine life is

estimated to be 40 years.

Mountain Lake Resources (VSE) is hoping to strike pay dirt on its Nooitgedact alluvial diamond project, 125 km west of Johannesburg. In recent pilot plant tests, the company recovered 14 diamonds totaling 19.35 carats from 609 cubic metres of gravel. All of the diamonds were gem quality with an average value of US$484 per carat.

Exploration of just 10% of the property has outlined 16 million cubic metres of diamondiferous gravels.

The lure of marine diamonds is attracting a number of juniors to the coastal waters off the west coast of South Africa and Namibia.

It is estimated that at least 1.5 billion carats of diamonds have been deposited along the coastline. Most sea diamonds were eroded from kimberlite pipes some 1,200 km inland. About 95% of marine diamonds are gem quality, as only the best diamonds survived the lengthy migration to the sea. Namibian Minerals (VSE) holds two marine concessions off the Namibian coast and one at the mouth of the Olifants River in South African waters. In recent months, the company carried out geophysical surveys and sediment sampling. A large bulk-sampling program is being designed to test targets outlined by the surveys.

In May, Diamond Fields signed an agreement with BHP Minerals and South African-based Benguela Concessions to explore and develop jointly its 660-sq.-km Luderitz sea concession along the coast of Namibia. Offshore in South Africa, Canadian Overseas Exploration (VSE) has acquired six marine diamond concessions. Two of the properties are in production, yielding stones with an average price exceeding US$200 per carat. One of the most active countries in southern African is Botswana, which is home to the major Jwaneng and Orapa deposits. These two mines alone make Botswana the world’s largest dollar producer of diamonds, with average production of 15 million carats (or $1.6 billion dollars) annually. One of the largest landholders in the country is Southern African Minerals (ASE) which has four major projects totaling 3.5 million hectares. The properties contain 62 known kimberlite pipes, 13 of which are known to be diamondiferous. Hundreds of additional kimberlite targets have also been identified for immediate testing.

Scintilore Explorations (TSE) and Fancamp Resources (ME) have acquired the 688,000-hectare Khutse property in central Botswana. With this acquisition, the partners now jointly hold more than 1.2 million hectares of precious stone licences.

Limited surface sampling on the Khutse property by previous operators resulted in scattered recoveries of kimberlitic indicator minerals. Exploration is scheduled to begin shortly.

Near Francistown, partners Trillion Resources (TSE), Skeena Resources (VSE) and Nickelodeon Minerals (VSE) are set to begin exploration of their 113,300-hectare Shashe diamond prospect.

About 60 km east of the Orapa deposit, Trillion has a joint venture with Winspear Resources (VSE) and Consolidated Venturex Holdings (ASE) on the Sowa Diamond project. Previous operators outlined eight kimberlitic garnet anomalies varying in size from 5 to 800 hectares.

In the central and southern portion of the country, Botswana Diamondfields (VSE) holds four precious stone exploration licences totaling some 600,000 hectares. The company has embarked on a 2-year exploration program to evaluate 60 of the 150 potential kimberlitic anomalies already identified by geophysical and geochemical techniques.

Redaurum (TSE) is exploring two licences covering 151,000 hectares in central Botswana. Exploration is focusing on an area containing a known kimberlite, about 15 km east of the De Beers-Debswana Letlhakane mine which produced 995,398 carats in 1993.

Earlier this year, reconnaissance sampling by SouthernEra identified anomalous amounts of kimberlitic minerals on five properties in central and southwest Botswana. SouthernEra can earn an 85% interest in the projects from Ampal and Repadre Capital (TSE).

Vancouver-listed Amarado Resources has acquired two exploration licences totaling 1 million hectares. The properties lie along the same northeast-trending structure that hosts the Orapa and Jwaneng deposits. In neighboring Zimbabwe, several companies have acquired large tracts of land in their search for kimberlite-hosted deposits. Much of the activity was sparked by Redaurum’s (TSE) acquisition of the River Ranch diamond deposit. River Ranch is Zimbabwe’s first commercial diamond mine, having entered production in March. Production this year should exceed 120,000 carats and plans are under way to expand production to 300,000 carats by early 1995. Proven reserves at the mine total 17.5 million tonnes of kimberlite to a depth of 150 metres. This reserve, which is sufficient to sustain open-pit mining for 15 years, is expected to yield at least 5 million carats. Just north of the River Ranch project, Trillion Resources has two contiguous joint-venture projects — Umzingwane-Maribeha with Skeena Resources, and Sansukwe-Mphoengs with Nickelodeon Minerals. Exploration on both projects is nearing completion and kimberlite indicator minerals have been found in five areas on the Nickelodeon joint venture.

Four new kimberlites have been found on properties belonging to Luxembourg-listed Reunion Mining and Argosy Mining (VSE). These discoveries raise to 20 the total number of kimberlites discovered on their holdings. Many of these pipes have been sampled and analytical work is under way. Reunion is 32%-owned by Caledonia Mining (TSE).

SouthernEra Resources is also acquiring properties in Zimbabwe. The company has applied for two prospecting orders on the Bulawayo and Masvingo concessions, which cover a total of 850,000 hectares.

Further north, in the Central African Republic, United Reef (TSE) continues to carry out exploration and pilot plant testing on its Bamingui River alluvial diamond property.

During July, 261 diamonds with a combined weight of 91.3 carats were recovered from the company’s pilot plant. The average size of the diamonds recovered was 0.35 carats, and about 78% of the stones are gem quality. The company hopes to be in production by 1995 at a rate of 50,000-60,000 carats per year.

About 150 km south of the Bamingui property, United Reef has teamed up with Belore Mines (ASE) to earn an 80% joint interest in two alluvial diamond deposits that are being hand-mined by local artisanal miners. The two deposits, known as the Djourou and Aigbando, were discovered by French colonialists in the early 1960s. The Aigbando deposit is the site of the largest diamond find in the country, where one stone weighing 215 carats was discovered in 1991.

Elsewhere on the continent, Serengeti Diamonds (VSE) and partners Bakertalc (ME) and Pure Gold Resources (TSE) are exploring in Tanzania, Nora Exploration (ME) and Consolidated Manus Industries (VSE) are active in Ghana, and Midas Minerals (TSE) has a 26.7% interest in the Casierra Diamond Syndicate in Sierra Leone.