Caledonia secures partner for Kikerk — BHP completes till-sampling program at Dunvegan

Caledonia Mining (CAL-T) has optioned half of its wholly owned Kikerk diamond property to Portree.

To earn a half interest, Portree has agreed to spend $1 million exploring the property, which is in the Northwest Territories. The company is required to pay a minimum of $300,000 in the first year.

After Portree earns in, Caledonia can earn back a 5% interest from Portree by spending $500,000 on the property.

Over the past three years, Caledonia carried out till sampling and high-resolution airborne magnetic programs at Kikerk. The work enabled the company to define five high-priority drill targets which are believed to be kimberlite pipes. Each target is defined by indicator mineral trains and is coincident with roughly circular lakes (a common characteristic of some kimberlite pipes in the Territories).

A closely spaced ground magnetic survey will be initiated this month, to be followed by drilling of the five targets. If results warrant, Caledonia will conduct additional till sampling in other areas of the property in order to locate the source of other indicator mineral trains defined by previous exploration programs.

Meanwhile, Caledonia’s joint-Venture partner, BHP Minerals Canada, has completed till sampling over 80% of the Dunvegan property, which lies 230 km northeast of Yellowknife and 30 km west of BHP’s Lac de Gras joint-Venture project with Dia Met Minerals (DMM-T).

BHP says the kimberlitic indicator mineral trains on the property are not likely to have originated in the Lac de Gras area. The mineral chemistry suggests a diamondiferous source.

Subsequent to the analysis of the 1996 exploration program results, the joint venture staked additional ground and expanded its land position to a total of 252,850 acres from 85,293 acres. For 1997, BHP is considering carrying out infill till sampling in areas with anomalous indicator minerals, regional till sampling over the newly acquired ground, airborne geophysical surveys and drilling.

To date, BHP has spent US$460,000 and it can earn a 51% interest in the Dunvegan property by spending an additional US$1 million in direct exploration costs over the next two years. Subsequent to earning in, BHP can increase its interest to 70% by spending an additional US$10 million over five years.