Trans Hex trenches Barra Grande

Toronto-based Trans Hex International (THI-V) will continue developing the Barra Grande diamond project in Brazil’s Minas Gerais state with the aid of US$1 million in financing from its South African parent, Trans Hex Group.

Earlier this year, Trans Hex exercised its option for a half-interest in the project, having fulfilled a US$2-million spending requirement. The company’s interest has since risen to 60% after Verena Minerals (YVM-V), the vendor, failed to secure its share of funding.

Verena is attempting to raise $1 million by issuing 3.3 million units by way of a private placement. A unit consists of one share and two-thirds of a share purchase warrant, with a whole warrant entitling the holder to buy another share at 40.

Canaccord Capital, which is underwriting the issue, says it can not complete the financing without first making a site visit. The financing is subject to regulatory approval.

Verena has the right to recover the 10% within 90 days of receiving a bankable feasibility study. Should it choose to do so, it must repay its pro rata share of funding, plus 50% of that amount as a penalty.

Barra Grande comprises 148,000 acres along the banks of the Rio Grande, which serves as a natural border between Minas Gerais and Sao Paulo states. Current efforts are focused on the Minas Gerais side.

In January, after two years of drilling, Trans Hex dug the first of several trenches planned for three prospects. Although the prospects have been continually mined by locals since the 1940s, they still host about 100 million cubic metres of prospective gravels.

The 16,800-cubic-metre sample, consisting of intermediate and basal gravels, is being processed on-site in a 15-tonne-per-hour recovery plant. Such volumes are sufficient to attach a preliminary grade and value to the deposits.

Barra Grande’s diamonds are hosted in a 3-to-5-metre-thick, matrix-supported gravel horizon on an undulating red argillic bed of variable thickness. The argillite, in turn, rests on an uneven sequence of basaltic volcanics.

Clasts can be as wide as 30 cm. Most are quartzite, in contrast to the gravel’s predominantly red-clayey matrix, and all are suggestive of a favourable environment for diamond deposition. (Artisanal miners reportedly recovered 4,407 carats over 12 years from the best site. The stones would have been worth US$400 per carat in today’s dollars.)

Initial results from the first bulk sample are expected in the coming weeks. The entire sample should be processed by August.

Trans Hex also explores for alluvial diamonds in Namibia. In Zimbabwe, it and a private partner recently inked a deal with Rio Tinto (RTP-N) that grants the major the right to explore their three adjoining prospecting licences in exchange for a back-in right to 30% of any discovery advanced to the feasibility stage.