Amarado to buy African company

A recent agreement sets the stage for Amarado Resources (VSE) to acquire a private South African company whose assets include diamond exploration projects in Botswana and South Africa.

The private company, Pyramid Mining and Exploration, also owns the historical database of the African Selection Trust group of companies. This database includes geophysical maps from Tanzania, Zimbabwe, Namibia, Lesotho, Swaziland, South Africa and elsewhere, as well as airborne magnetic sheets, topographical maps and satellite images of these countries.

Also included are records of the group’s work in these countries, including project reports, detailed airborne magnetic surveys, drilling results and geochemical surveys carried out over a variety of geological environments and for various commodities such as base metals, gold and diamonds. The proposed acquisition of Pyramid in exchange for 14 million Amarado shares is still subject to regulatory and shareholder approval. But once the transaction is completed, Amarado’s board of directors will include Lawrence Neuhoff, Pyramid’s technical director. Neuhoff was previously employed at African Selection Trust, where he managed the group’s gold and diamond exploration programs in South Africa and Botswana.

Warren Newfield of Toronto, and Tan Sri Azmi, an international businessman currently president of the National and Malay Chambers of Commerce in Malaysia, will also join Amarado’s board.

Amarado President Vance White says the company’s initial efforts will be focused on diamonds, although it also plans to make use of the Seltrust group’s database to advance and acquire a variety of mineral projects in South Africa and neighboring countries. “We expect to be well-positioned to secure new projects when the South African government begins its initiative (in 1997) aimed at making more ground available to juniors,” White says. In Botswana, Pyramid has a participation right (for up to 40%) in licences held by Gencor (a South African major mining company) in five diamond prospects totaling about 2.1 million acres. These prospects are both along the Kalahari Kimberlite Trend and immediately west of the Jwaneng diamond mine in central Botswana.

The land package along the Kalahari-Kimberlite Trend contains 31 known kimberlite pipes, of which at least five are known to contain microdiamonds. These pipes were found in the late 1970s and early 1980s and are believed to be part of a larger field. This concept is the focus of extensive sampling and geophysical work.

Exploration on the Jwaneng East project is focused on testing the possibility of an extension of the Jwaneng diamond field. Several anomalies were selected for follow-up exploration.

In South Africa, Pyramid holds a 100% interest in the Kareevlei Wes property about 110 km north of Kimberley. Four kimberlites, two of which are known to be diamondiferous, have been discovered to date. Petrographic work on drill core defines these kimberlites as Group II (Finsch) type.

Work to date returned a total of five large diamonds (greater than 0.2 carats) and 91 small diamonds (less than 0.2 carats). Four of the large stones were described as gem quality, ranging from 0.22 to 0.27 carats. A mini-bulk sample is planned.

Amarado has other diamond projects, including a 20% interest in the Camsell Lake project operated by Winspear Resources (VSE) near Lac de Gras, N.W.T. Results are expected shortly from a recent hole which intersected kimberlite on the project.