Drilling progresses at Canabrava diamond play

Exploration for the source of alluvial diamonds is continuing at the Canabrava project in the Coromandel district of Minas Gerais, Brazil.

Teck (TSE), which can earn a 60% interest in the project from Canabrava Diamond (VSE), is engaged in auger and reverse-circulation drilling.

Under the joint-venture agreement, Teck must spend US$10 million on exploration and pay US$2 million over five years. It must also complete a bankable feasibility study, arrange project financing and pay a production bonus of US$20 million, less any previous option payments. Teck also has the option of purchasing an additional 10% interest.

The Canabrava project, 400 km southeast of the capital city of Brasilia, comprises 25 claim blocks totalling 850,000 hectares. Airborne geophysical surveys there have identified more than 1,200 magnetic anomalies.

More than 700 targets are undergoing follow-up ground geophysics, and Teck has already defined 39 kimberlite-lamproite targets for drilling. Canabrava expects that more than 100 pipe-like bodies could be drill-tested this year.