EXPLORATION ’99 – Diamond exploration heats up Down Under — Lac de Gras-like conditions attract junior companies

More and more junior companies are turning their attention to Australia’s diamond exploration potential.

Caldera Resources (CDR-M) recently entered into a joint venture with Southern Era Resources (suf-t) to explore for diamonds in Western Australia. SouthernEra can spend $1 million over four years to maintain a 51% interest in a several recently acquired licences.

Caldera previously recovered kimberlite indicator minerals during a program of loam-sampling. Geophysical data and regional geological information indicate that the area exhibits strong similarities to the Lac de Gras kimberlite region of Canada’s Northwest Territories. Unlike there, however, the level of oxidation in Western Australia can be exceedingly deep, rendering kimberlite identification much more difficult.

In addition to the SouthernEra joint venture, Caldera holds five diamond projects in the Pilbara region and is involved in two joint ventures with Stockdale Prospecting, an Australian subsidiary of De Beers Consolidated Mines (dbrsy-n).

Meanwhile, Caledonian Pacific Minerals (CDM-V) is exploring for the source rocks of the Bingara alluvial diamond field, 160 km north of Tamworth in northern New South Wales. Bingara is the second-largest diamond-producing region in the state, having so far cranked out more than 34,000 carats.

Caledonian has applied for two exploration licences covering about 600 sq. km in the northern portion of Bingara. The alluvial diamonds from the region show little mechanical wear, which, says Caledonian, is an indication that the source rocks could be close at hand. Clast compositions in the alluvial deposits and the lack of indicator minerals associated with the alluvial diamonds indicate that the diamond-bearing gravels have a local origin.

Extensive exploration in the 1960s failed to locate a significant primary source rock, though Caledonian says this was because the classic South African kimberlite model was used. The company believes that the traditional South African kimberlite and Argyle lamproite model of diamond formation is not applicable to the Bingara diamond field.

The Geological Survey of New South Wales has since developed a new model of diamond formation — one that is specific to Eastern Australia. According to this model, potential diamond source rocks are diatremes associated with alkali basalt volcanism. Diamond-bearing eclogite and peridotite facies material is captured in a subduction zone environment by rapidly rising magmas of alkalic composition. These magmas cut through the subducted slab and form diatremes on the surface. The recovery of diamonds from nephelinitic intrusions in New South Wales renders this model plausible.

Caledonian believes target intrusives can be identified on the ground by using low-pressure indicator mineral suites and high-sodium garnets.

Toward this end, the junior has identified 14 sub-circular geophysical anomalies, some of which are interpreted to be related to pipe-like volcanic structures, consistent with known volcanic diatremes in the area. Many of these anomalies are spatially associated with alluvial diamond occurrences and adjacent to major magnetic lineaments that are interpreted to represent deep-basement fracture zones.

Another junior taking a harder look at Australian diamonds is Thundelarra Explorations (TLX-V). The junior has entered into a joint-venture agreement with Ragged Range Mining for a 44% interest in the Phillips Range Diamond project in the Kimberly region of Western Australia. The project consists of seven tenements covering 7,700 ha, which host the multi-lobed Aries kimberlite. The partners believe that this kimberlite has the potential to host an economic concentration of diamonds. The pipe was discovered in 1985, since which time 1,819 carats of diamond have been recovered. The best-quality gems were valued at more than US$100 per carat, and about 90% of the diamonds were of gem-quality.

The distribution of diamonds in the 13-ha pipe is still poorly understood. Most kimberlites in Australia exhibit variable zonation of diamonds, and the Aries is no exception. Systematic bulk sampling is required to determine the diamond distribution and grades of the various phases. The partners are looking to make a deal with a major mining house to take the project to the next level of exploration.

Thundelarra also has a 90% interest in a joint venture with Resource Exploration to explore the Leopold Downs project in the Kimberly region.

The project consists of two exploration licences, covering 386 sq. km of an emerging diamond region. The project covers ground that has a structural and stratigraphic setting similar to that of the nearby Ellendale field, which contains the diamondiferous Big Springs lamproites.

About 50 microdiamonds and macrodiamonds have been discovered in stream-sediment sampling in the Leopold Downs tenements. The source has yet to be identified. A program of geological mapping, drainage and geochemical sampling, combined with a low-level aeromagnetic survey, is planned.

Another new player on the

Australian diamond scene is California-based Tiger International Resources (TGR-V), which holds the Flinders Ranges project, north of Adelaide in Southern Australia. At last report, the company had discovered 89 “on-source” kimberlite targets. (“On-source” describes kimberlite indicator minerals that show little evidence of abrasion caused by sedimentary transport; the description suggests that the source lies close to the sample collection site.) Three of the 89 on-source samples were found outside of the Flinders project area. As a result, Tiger has applied to the South Australian government for permission to expand the present boundaries of the property by 450 sq. km.

The company is currently focusing on four primary diamond targets: Hutt Hill, KA113, KA112A and B. In a previous program, Tiger drilled 119 shallow holes at Hut Hill and encountered indicator minerals in nine of these. However, the deep-weathering profile prevented the identification of kimberlites. The targets will next be subjected to trenching and bulk sampling, as soon as the company raises $5 million in financing.

Jumping on the band wagon is Citation Resources (cue-v), which recently shifted its focus to diamonds from base metals. In September, the company issued 14.5 million shares and acquired six diamond exploration projects in South Australia, at the northernmost edge of the Gawler Craton.

The junior has identified 41 magnetic targets, 19 of which returned anomalous indicator-mineral geochemistry. Citation is negotiating with aboriginals for permission to drill about 15 of the targets.

In Queensland, on the North Australian Craton, Citation has applied for two permits to explore ground that hosts magnetic highs measuring up to 1.3 km wide. A few of these geophysical anomalies have a vertical component that is consistent with kimberlitic pipes. Dia Met Minerals (DMM-T) recently entered into a joint-venture agreement with Citation to acquire a 60% stake in these properties. Work will begin as soon as the title is granted.