Preliminary results from 4,000 metres of core drilling at the Piteiras emerald property in Minas Gerais state have expanded the size of the deposit by roughly a third.
Using results from the first half of the 20-hole program,
Highlights include hole 21, which intersected two emeralds in the core, measuring 20 grams and 7.5 grams. Over the 2.5-metre thickness of the zone, the grade of the intercept reached more than 2,000 grams per tonne. Hole 23, which also encountered emerald and emerald fragments, averaged 240 grams over the 2-metre interval.
The zone swells to 7.1 metres in hole 25, averaging 0.9 gram per tonne, whereas hole 27 hit a 3.6-metre zone grading 4.2 grams.
The company expects the resource to continue to grow as the remaining results are calculated.
Seahawk says its 312-ha Piteiras project represents the first-ever attempt to calculate a resource estimate for an emerald deposit. Typically, emeralds are found associated with pegmatites, where continuity is spotty and difficult to follow. However, in the late 1980s, two German gemologists proposed a theory that lends itself to conventional resource estimates. The theory suggests that emeralds can be formed in metasomatically altered ultrabasic volcanic rocks during low-grade metamorphism. These metasomatic (or “blackwall”) zones of phlogopite and biotite are often associated with nearby granitic intrusions. (At Piteiras, Precambrian granites intrude Archean metavolcanics.) High chromium and beryllium values correlate with the presence of emeralds in the core. Also, geologists have noticed a relationship between the proximity of the phlogopite schist to the granite and the presence of emeralds in the core.
To date, Seahawk has drilled more than 30 holes at Piteiras, and, in the process, uncovered a consistent layer of phlogopite schist averaging 2.5 metres thick over an area measuring 400 by 200 metres.
“The blackwall theory is so consistent that our geologists are able to predict the intersection with the schist within a metre,” said Seahawk’s vice-president Jean-Marc Lopez, who spoke with The Northern Miner during its recent site visit. “We are more likely to hit emeralds and emerald fragments in the core when we see high chromium and beryllium within about 15 metres of the contact with granitic gneisses.”
So far, Seahawk has closed off mineralization in several directions, but it hopes to extend the Coqueiro zone down the 20-to-25 dip to the east.
Although Seahawk has demonstrated lateral continuity in the zone, uniformity of emerald mineralization has proved difficult to predict. Coqueiro exhibits a strong nugget effect, with large stones rendering grade determination difficult.
New mine plan
The large size of the Coqueiro zone prompted Seahawk to review the mining plan contained in the October 1999 in-house scoping study, wherein the cost of building a small underground mine was estimated to be US$5 million.
The study recommended construction of a 180-metre vertical shaft to extract ore using room-and-pillar methods. The material would be put through a grizzly, jaw crusher, scrub trommel and screens before undergoing hand-sorting for emeralds. However, for economic reason, Seahawk is now considering building a spiral ramp or inclined shaft, as opposed to a vertical shaft.
Underground mining would yield a projected 100 tonnes of schist per day, and the ramp option would enable Seahawk to increase production at a later date. Processing would recover about 70% of the emeralds.
Emerald quality is determined by colour, clarity and carats (one gram equals five carats). Up to a quarter of all emerald production is said to be of “faceting” (or high) quality, with the remainder being of “cabochon” (lower) quality. Faceting-quality stones from Brazil can sell in the range of US$100-150 per gram, whereas cabochon stones are generally worth US$2.50 per gram.
So far, none of the crystals recovered from Piteiras has been evaluated.
Although Seahawk’s immediate plans are to sell its raw stones to established emerald brokers, the company is considering cutting its own stones at a later date.
The company holds a 58.5% interest in the property through Piteiras Mineracao, which owns the surface and minerals rights. Seahawk can increase its stake to 75% by paying US$675,000 by the end of June. The landholders would retain a 20% carried interest, with two Brazilian parties — CAVAN Engenharia Desmontes and Mina Forte — each holding 2.5%. Seahawk is responsible for US$5-6 million in development financing.
Ramp construction is expected to begin this year, followed by bulk-sampling.
The company has already completed its environmental permitting and expects to receive its installation licence (for construction of mine facilities) sometime in March. Seahawk will apply for an operational licence before year-end, to be followed by the granting of a mining decree from the federal bureau of mines. Commercial production could come as early as mid-2002, Lopez said.
Emerald production in the region dates back to 1978, when the discovery of the Belmont emerald mine attracted thousands of garimpeiros. A decade later, the Capoeirana mine was discovered. Piteiras lies between the two mines and can be reached year-round by gravel road. A powerline cuts through the property.
Seahawk also has an option to buy a half-interest in the 5-claim Monte Belo property, nearby, for US$1.5 million in cash and US$500,000 in shares.
The company has 13.8 million shares outstanding, or 17.9 million fully diluted. Working capital at the end of 1999 was US$500,000.
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