Paramax Resources Ltd -
Paramax to acquire Brazilian mineral claim
Paramax Resources Ltd
PXM
Shares issued 5,970,100
1999-11-12 close $1.9
Friday Nov 12 1999
Mr. Paul Conroy reports
Paramax Resources has signed a letter of intent with Paramount Ventures and
Finance Inc. to acquire up to a 40-per-cent interest in a 10,000 hectares mineral
claim in the State of Mato Grosso, Brazil. The mineral claim is prospective for
diamond and gold exploration and development.
Under the terms of the letter agreement, Paramax has the right to earn up to a
40-per-cent interest in the claim block by making a cumulative expenditure of
$250,000 (U.S.) over a period of 12 months. Paramax will earn 20-per-cent
interest in the claim block upon expenditures of $125,000 (U.S.). After Paramax
has earned its interest, the companies will enter into a joint venture for future
development.
The property is situated within a well known diamond producing area. Gold was
first discovered in the region in 1729, with later discoveries of diamonds hosted by
alluvial gravels. Limited production occurred through to the 1930's, when
significant diamond discoveries were made in the area around Alto Paraguai. Most
of the mining operations have been conducted by garimpeiros (local, small-scale
miners) within terrace gravels of the Rio Paraguai and its main tributaries.
Dredging of portions of the Rio Paraguai and one of its main tributaries, the Sant
Ana, has also occurred. Dredging along the Sant Ana was conducted by Promisa
Minerios Ltda. (an associated company of Brascan Canada). Apart from this and
terrace gravel mining conducted by Compania Matogrossense de Mineragao on
the Melgueira project (located east of Alto Paraguai), no major companies appear
to have been involved in mining operations in this area. Current diamond mining
activities are concentrated primarily within the Paraguai River basin and, to a
lessor extent, along the Arinos and Cuiaba Rivers.
Within the main region, which extends some 80 kilometres from Diamantino in the
east to Santo Afonso in the west, diamonds and gold occur in quaternary alluvial
gravels that rest upon proterozoic to cambrian and triassic to upper cretaceous
sedimentary lithologies and jurassic-cretaceous basalts. At lower elevations, along
the plains of the Rio Paraguai the gravels commonly range between 0.5 to 3
metres in thickness, pebbles and cobbles are well rounded, seldom exceed 25
centimetres along any one axis and are composed predominately of quartz,
quartzite and amorphous silica (principally as agate). On the mesas which border
the plains, the gravels am often thinner and/or distributed in pockets. The clasts
reach large-cobble to boulder size and reflect lithologies present in the underlying
bedrock in addition to quartz, quartzite and silica. The clasts are usually matrix
supported and comprise between 40-80 percent of the gravel horizon. The matrix
is composed of clay, silt and fine to coarse grained sand.
Diamonds have also been reported from the upper cretaceous Parecis formation
and some workers attribute the widespread occurrence of diamonds in this region
to their having been liberated from conglomerate horizons within this formation.
No kimberlite, lamprophyres or other primarily host rocks have been identified
within the region to date.
Based upon a report prepared by METAMAT (circa 1997), verbal reports from
local diamond buyers and garimpeiros and observations of current garimpeiro
workings, it is estimated that the average grade of the gravels ranges from
approximately 0.5 to 0.7 carets per cubic metre (Note: this estimate is for the
lowermost portions of the gravel horizon as the diamonds are often concentrated
in the lowermost O.5 m to 1.5 m). In general, the diamonds are of a high quality
and the majority are gem-type stones. They often occur as octahedral and
dodecahedral forms particularly for stones in the 0.2 ct to 1.5 ct range. Current
production from the Alto Paraguai workings is estimated to be in the order of 250
to 300 cts per week. Production from the region that includes Alto Paraguai,
Diamantino, Nortclandia, Arenapolis, Santo Afonso and Nova Marilandia is
estimated at approximately 2500 cts per month. Gold (ranging in size from fine
flakes to small nuggets) recovered as a by-product is estimated at approximately
1500 grams per month with approximately one-third (500 g) coming from the Alto
Paraguai area.
Local prices for Alto Paraguai diamonds are reported to average approximately
$150 per ct (U.S.) with a price range of $10/ct (U.S.) for industrial diamonds
(boart) to over $2,000/ct (U.S.) for a five-carat high-quality clear stone.
Occasional fancy coloured diamonds are recovered including pinks, yellows, blues
and reds. These stones often carry a premium on price.
Bulk testing equipment has been mobilized and is currently operating on site. The
basic equipment includes bulldozers, excavators, backhoe/front-end loader and
jigs. The equipment is capable of processing in excess of 100 cubic metres of
gravel per day. Procedures for mining and pumping are being established and Jig
performance is being fine tuned. Initial reports indicate that the gravels being
processed have a grade of approximately 0.5 cts per cubic metre. Stone sizes
range from 0.15 cts to 1.5 cts.
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