Diagem merges with EAG

Shareholders of Diagem International Resource (DGM-V) and Emerging Africa Gold (YEG-V) have agreed to merge the companies, creating a stronger, junior explorer focused on diamonds.

Shareholders of Emerging Africa Gold will receive shares in Diagem on a 1-for-1 basis. Diagem, the continuing corporation, will have interests in seven kimberlite pipes situated in the Juina district of Mato Grosso, Brazil, and diamond properties in northern Ontario, as well as other extensive holdings of diamond-bearing gravels elsewhere in Brazil.

In the Juina district of Mato Grosso, Diagem is conducting bulk sampling of alluvial gravels in properties 108, 213, 214 and 1000 to determine which, if any, of the exploration properties should be developed into mineral concessions.

Exploration on the 108 property, comprising 100 sq. km, has been sporadic over the past five years; however, large alluvial deposits have been delineated, and numerous geophysical and geochemical targets, thought to represent kimberlite, have been defined. Diagem is evaluating the alluvial gravels using a moveable, 10-cubic-metre-per-hour processing plant to sample 15 large test pits.

The first test pit returned 56 diamonds weighing 39 carats, including five stones exceeding 1 carat and one that was 16 carats. Diagem has three months in which to complete the sampling program on the remaining pits and present a final report before seeking a mining concession.

Elsewhere in the Juina district, on properties 213 and 214, work is centred on Garnet Creek, a watercourse that drains a cluster of five kimberlite pipes. A bulk-sampling program using a pontoon, 25-cubic-metre per hour, processing plant will assess the alluvial potential of Garnet Creek. The program will be completed within 90 days, and if results warrant, there will be enough time to apply for a mineral concession.

In addition to the alluvial diamond potential, the three kimberlite pipes found on properties 213 and 214 are said to be diamondiferous, based on small samples analyzed earlier in 2000. Diagem plans to evaluate the kimberlite pipes — in particular, the top and surrounding eluvial cover, as well as the saprolitized upper portion and lower hard kimberlite. The weathered portion of the kimberlite, which extends to a depth of 80 metres, will be evaluated using a processing module that can excavate weathered material.

At property 214, an additional, unrelated kimberlite pipe, which was the subject of exploration by a senior mining company, is also present, as are numerous other targets. Diagem has until next April to advance the project and complete its mineral concession application.

Diagem also holds a 51% interest in property 1000 in the Juina district, the site of a seventh kimberlite pipe. The company plans to sample the ARP-1 kimberlite pipe and complete 44 bulk samples, measuring 20 cubic metres each, of alluvial gravels to prove up a resource of 500,000 cubic metres. Diagem also has a 39.75% interest in KWG Resources (KWGR-C), which has properties in Wawa, Ont., and has signed a joint venture with De Beers concerning properties in the James Bay Lowlands.