Open Pit 701 Changma Diamond Mine
This mine is the largest producer of diamonds in China. It has operated for over 27 years and has produced more than 1,000,000 carats of diamonds. Recent annual production has reached 50,000 carats. The kimberlite pipe in which the diamonds occur has been extensively explored and drilled to a depth of over 600 meters and the resource has been estimated to be in excess of 3 million carats. The mine has produced some remarkable gemstones during its producing period, the largest being 119, 67, 65 carats, and the most recent recoveries in 1998 included diamonds of 28 carats and 30.31 carats.
Pan Asia intends to convert the existing open pit to a much larger underground mine and update the processing facility with the latest technology and new engineering design for recovering diamonds. It is proposed to mine and process at a rate of 1,075 tonnes per day producing over 285,000 carats per year. The cost of the conversion will be approximately US$ 17 million and the annual gross profits will be approximately US$ 21 million, so that the "Capital Payback Period" will be less than one year. The total conversion should be complete in a maximum of 3 years.
Kilborn Engineering Pacific Ltd. estimated the measured and indicated mineral resources to be 1,774,000 tonnes yielding 2,083,000 carats for an overall mine head grade of 1.174 ct/tonne from 90 to 300 metres below surface. Kilborn also estimated inferred geological resources between 300 to 600 metres below surface to contain 1,378,000 tonnes at a grade of 0.77 ct/tonne, yielding a total of 1,061,000 carats.
The Company plans to develop a underground mine and upgrade the existing processing plant.
701 Changma Diamond Mine Processing Plant
Fluor Daniel Wright Ltd., an engineering firm from Vancouver, and also SNC Lavalin, formerly Kilborn Engineering Pacific Ltd., recommended some major upgrades to the plant that will improve recovery of diamonds and reduce the destruction caused by ball-milling the ore. The major upgrades recommended are to introduce a dense medium separation (DMS) unit to replace the wash pans, and use X-ray sorting instead of grease tables to recover the diamonds from the concentrate. Increasing security with the installation of a system comprising of manual and electronic checks would also reduce potential losses.
A 48.85 carat diamond from the 701 Changma Diamond Mine
Current production is reported to be approximately 44,000 carats per year. At surface, the two pipes are collectively 230 metres in diameter. They have been extensively explored to a depth of 600 meters and are open to depth.
In addition to its high grade, the 701 Changma Diamond Mine historically yielded some exceptionally large stones, 119 carats, 67 and 66 carats etc. and every year it continues to recover large quality stones from its production.
Pan Asia enjoys excellent relationships with key Chinese officials and ministries. In addition to board members, because of their financial and regulatory experience, understand what it takes to succeed on both sides of the Pacific.
The 702 Xiyu Deposit consists of a cluster of eight diamond bearing kimberlite pipes. Four of these pipes join some 250 meters below the surface forming a large higher grade pipe, with one additional higher grade pipe being separate from the cluster. The higher grade resource has been conservatively estimated to be over 36 million tonnes of kimberlite, and is estimated to contain approximately 8 million carats of diamonds.
In Phase I of the work program Pan Asia intends to commence a small open pit operation that should produce approximately 25,000 cts/year, and once this operation is successfully underway, the Company will use the resulting cash flow to finance further delineation and evaluation of the higher grade underground resources. Phase II of the work program encompasses mining the higher grade parts of the pipes from underground at a rate of 7700 tonnes per day, producing approximately 450,000 carats per year. The cost of putting this size of mine into production has been estimated at a little over US$66 million.
702 Xiyu Diamond Deposit Cluster Area
The 702 project is located at Mengyin County of Shandong Province and surrounds the 701 Changma Diamond Mine. The current infrastructure is quite amenable with the main access by way of road. The geography of the area is characterized by low-lying hills.
Exploration work that has been competed over the past 20 years has established that a large number of magnetic anomalies, together with indicator minerals, occur in the area. An impressive summary of diamonds and indicator minerals recovered from alluvium, conglomerates, and lamproite samples collected on the 703 property include: 2,732 diamonds, 847 pyropes, 466 chromites, 140 ilmenites, and 10 chrome diopsides. Ground geologic mapping and heavy mineral soil sampling will be continuing.
703 Project Geology Map
Click to enlarge
The 703 project covers an area of approximately 1,650 square kilometers in the south-central part of Shandong Province. The project is located approximately 20 kilometes South of the 701 Changma Diamond Mine.
The mine commenced production in early 1992 at 50 tonnes per day. The rated capacity of the mill is 160 tonnes per day, but some minor improvements are needed for it to achieve its rated production.
Pan Asia intends to make the necessary improvements for operating the mine at the current full production rate, while carrying out a program of further resource delineation along strike and down dip. Pan Asia believes that the results of the existing surface exploration indicate that sufficient potential resources can be delineated to warrant constucting a 1,100 tonnes per day mine and mill complex. The capital cost of this plant including the costs of the exploration program has been estimated at approximately US$ 28 million.
Huixian Gold/Copper Mine Complex
The area's geology is by a caldera about 100 sq km in size. A caldera is a large, basin-shaped depression formed by the inward collapse of a volcano after an eruption.
Three types of mineralization predominate the area: Cu/Au porphyry, Cu/Au breccia pipe within the subvolcanic rock bodies and copper/gold quartz veins.
a total of 29 targets have been identified and being explored
Zouping Exploration
Property Geology Map - Click to enlarge
THE ZOUPING COPPER/GOLD EXPLORATION LICENSE AREA
The current License covers approximately 66 square kilometers and a great deal of exploration work has already been completed. The work has shown that there are seven primary and some additional secondary targets. Recent work concentrated on four of the primary targets, has provided encouraging results since economic porphyry type copper mineralization has been found. Pan Asia will continue with a systematic examination of all identified targets and will follow up on the economic mineralization that has already been found.
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