THE DIAMOND PAGE — DHK-Kennecott predicts kimberlite by

“Kimberlite by Christmas and results by spring” is the stated goal of the partners involved in a major bulk test of a kimberlite pipe in the Lac de Gras region of the Northwest Territories.

George Stewart, president of Kettle River Resources (VSE), said Redpath crews have already collared the decline and expect to begin collecting the 5,000-tonne bulk sample by year-end.

It was standing room only during Kettle River’s recent annual meeting, as Stewart outlined details of Kennecott’s $10-million-plus program to test the Tli Kwi Cho (DO-27) pipe on ground optioned from Kettle River, Dentonia Resources (VSE) and Horseshoe Gold Mining (ASE). “The recent airlift that took place to bring equipment to Lac de Gras has to be one of the biggest in mining history,” Stewart said, adding that the bulk of the equipment is already in place.

The underground decline will measure 9×9 ft. while in granite and about 6×6 ft. in the less competent kimberlite. At about 300 ft. below surface, the crews will drive east-west through the pipe to test both the upper crater facies and diatreme pipe. “This plan could change, depending on the ground conditions,” Stewart said. “The Redpath team is prepared for a number of eventualities.”

The bulk test is the first for the Kennecott-DHK joint venture and may be followed by a larger, 20,000-tonne sample. The goal is to prove up an economic diamond deposit. The processing plant will be based in Yellowknife, N.W.T., and have a capacity of 10 tonnes per hour.

Results are still awaited from several holes drilled to test Tli Kwi Cho this summer. So far, reported holes adding up to 312.7 kg of kimberlite returned a total of 96 macro-diamonds (more than 0.5 mm in size) and 299 micros. Sixty of the macros are described as clear.

Drilling to test the North lobe (DO-18) returned 16 macros and 62 micros from 265.2 kg of kimberlite. Eight of the macros are described as clear, with one weighing 0.35 carats. This is the largest stone recovered to date, according to Stewart.

Kennecott is also planning to spend $1.4 million to explore targets outside Tli Kwi Cho, he said. “We have a number of good targets to the south that we plan to drill this winter.”

Northwest Territories

Elsewhere in the Territories, Kennecott recently informed Totem Health Sciences (VSE) that it is dropping the option on the remaining Totem claims in the Lac de Gras region. Totem, meanwhile, is assessing other exploration opportunities in Mexico and Canada.

* Tenajon Resources (VSE) and Pure Gold Resources (VSE) have revised terms of an earlier agreement relating to certain exploration claims in the Humpy Lake region. If all parties exercise their rights under the new terms, Tenajon would own 25%, Pure Gold 25% and Ashton Mining of Canada 50%. * The Canadian Diamond Investors Fund 1 Limited Partnership (CDI) is subscribing to a private placement of units in Garden Lake Resources (VSE), totaling $300,000. Each unit will consist of one flow-through share and one purchase warrant exercisable at the subscription price of $2.02 per share up to Sept. 17, 1995.

Garden Lake will use the proceeds to fund exploration on its diamond projects in the Territories.

Overseas

* Blue Emerald Resources (VSE) has reached an agreement with a private company to acquire a 250-sq.-km diamond concession in the Central African Republic (CAR).

The property, near Yalinga in the eastern part of the country, covers a known diamond showing which is proximal to prominent river systems and within pediment gravels on the edge of the Mouka Ouadda plateau.

Diamond production from the CAR is officially estimated at 500,000 carats per year. Eighty per cent of the stones are reported to be of gem quality, with an average value of US$150 per carat.

* Sage Resources (VSE) reports that 74% of the 58 diamonds recovered from Site 1, at its Beta Creek diamond project in Australia, were gem quality. The stones, which weighed 7.22 carats in total, have an average value of US$62 per carat.

To date, four kimberlites have been identified on the property and another three potential targets identified. A program of sampling, magnetometer surveys and drilling is under way to evaluate these targets. Sage has an option to earn a 30% interest in the project.

* A recent financing raised $3.4 million for Argosy Mining (VSE), formerly known as Black Rock Nevada Mines. The company has the right to earn a 40% interest in eight properties in Zimbabwe and Tanzania from London-based Reunion Mining. The joint-venture properties total 23,849 sq. km and contain five kimberlite clusters, 23 kimberlite pipes and more than 100 exploration targets.

Argosy President Yale Simpson says exploration expenditures over the next year will exceed US$100,000 per month. A field camp and on-site lab are being established in Tanzania, where the Mabuki project and its two main kimberlite clusters are situated. The company has three main projects in Zimbabwe: Gwaii, Quest and Hwange.

* KWG Resources (ME) has acquired the mineral rights to 35,000 hectares of the Paranaiba River, near Minas Gerais, Brazil. The area, which is prospective for diamonds and gold, covers about 24 km along the river and its terraces.

KWG will earn 75% of the net profits from these concessions until it has recovered its capital investment, and 50% thereafter.