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SouthernEra Resources Limited Press Release
FINAL CAMAFUCA AGREEMENT SIGNED IN ANGOLA
April 17th, 1997
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SouthernEra Resources Ltd. (TSE-SUF) is pleased to announce that a definitive agreement covering the very large (160 ha) Camafuca /Camazambo kimberlite pipe (51%SUF), has now been signed following earlier approval by the Angolan Cabinet.
The Camafuca / Camazambo pipe is approximately 3.3 kilometres in length and up to 550 metres wide with a total area of 160 hectares. It is approximately bisected by the Chicapa river. Drilling to date has included at least 267 core drill holes and 63 large (1.25 - 1.5 metre) diameter rotary holes. The core holes, which were drilled on nominal 100 metre centres, serve to define the geology of the pipe to an average depth of about 100 metres. The large diameter holes, mainly located on the eastern bank of the Chicapa river for logistical reasons, were drilled to allow determination of diamond grade for selected parts of the pipe.
Geological interpretations of the drill core indicate that the Camafuca kimberlite consists of at least two main intrusive centres. The kimberlite is little eroded and crater facies kimberlite tuffs and breccias are the main rock type present in the upper 100 metres of the body. Higher diamond grades are associated with coarser grained tuff and breccia, which are present mainly around the margins of the body.
In the course of large diameter drilling, approximately 1600 carats were recovered with an average stone size of 0.14 carats. The company has stone size data for approximately 375 carats of this total, which indicate a maximum stone size (for the 375 carats) of 8.24 carats, with approximately 16% of the diamonds greater than 1 carat and 26% larger than 0.5 carat. In 1974 the average value of the diamonds was stated to be $35 per carat which, based on an increase of approximately 5.5 times between 1975 and 1997, suggests the average value will be in excess of $175 per carat.
Previous operators delineated shallow reserves in two zones, totalling approximately 8 million tonnes with an average grade of 0.17 carats per tonne and a stripping ratio of 0.25:1 (waste : ore), to a maximum depth of 75 metres. Considerable potential exists adjacent to these areas and, at depth.
On the west bank of the Chicapa river the limited large diameter drilling has encountered encouraging grades up to 0.78 carats per cubic metre.
Following compilation of the existing database, SouthernEra plans to commence infill drilling in the higher grade sections of the pipe, as well as begin large diameter drilling of the much higher grade western part of the pipe. This drilling is intended to delineate near surface mineable zones for early development. Drilling of deeper portions of the pipe to test the diatreme facies will take place at a later date.
In order to acquire its 51% interest in the Camafuca / Camazambo kimberlite pipe, SouthernEra is required to pay one of its partners US $2,000,000 in cash and US $3,000,000 in common shares before April 20, 1997 and a further US $7,000,000 by April 20, 1998. Up to 50% of the US $7,000,000 payment can be made at SouthernEra's option in common shares. SouthernEra is obliged to spend U.S. $5,000,000 on the property within 5 years of which US $2,000,000 must be spent by April 10, 1998. The transaction is subject to applicable regulatory approval.
On the political front in Angola, numerous Heads of State from around the world attended the inauguration, on Friday 11th April, of Angola's new unified government which now includes both the ruling MPLA and UNITA. UNITA will hold a number of key Cabinet, Vice-ministerial, Internal and Ambassadorial posts (including that of Canada). This marks the end of a long civil war between the MPLA and UNITA.
For more information please contact:
Christopher M.H. Jennings, President
A. Lee Barker, Vice President
George Albino, Chief Geologist
Nicholas Sayce, Investor Relations
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