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South Atlantic Resources Ltd.
SCQ CDNX
December 2, 1999
Recovers 68 Carat Gem Quality Diamond Work Continues on Santo Antonio Alluvial Diamond Deposit in Brazil
SOUTH ATLANTIC RESOURCES LTD ("SCQ-V")
- Recovers 68 Carat Gem Quality Diamond
- Work Continues on Santo Antonio Alluvial Diamond Deposit in Brazil
Edward F. Posey, President of South Atlantic Resources Ltd. (the "Company") is pleased to report the discovery of a 68.6 carat gem quality diamond from alluvial gravel sampling operations on its Santo Antonio exploration concessions in Brazil. Plans are being made to expand sampling operations and enter into commercial production within one year.
The Santo Antonio concessions cover 62 square kilometers extending along a 22 kilometer length of the Santo Antonio River Valley. The area is located approximately 30 kilometers northeast of the town of Coromandel in the western part of the state of Minas Gerais. The Company has undertaken a systematic drilling and sampling program to delineate the nature and extent of the diamond-bearing gravels. The current estimated resource from this drilling is 25 million cubic meters. A small gravel washing plant is being operated to process gravel samples from this program. To date, a total of 10,000 cubic meters of gravel have been treated resulting in recovery of 24 diamonds weighing a total of 119 carats. Map is available from the Company.
The 68 carat diamond is the largest stone so far recovered in the Company's testing program. Independent evaluation has assigned it a value of US$1,000 to US$1,500 per carat. Prior to this, several large stones have been recovered including one weighing 15.8 carats which was independently valued at US$600 per carat. Continued sampling of the Santo Antonio deposit is expected to confirm an average gross value of US$12 to US$15 per cubic meter of gravel.
Plans call for a treatment plant with the eventual capacity of processing 1000 cubic meters of gravel per day (2,000 tons) to be used for commercial production after bulk-sampling is finished. The Company has initiated design and procurement studies utilizing the most recent technological innovations for processing diamond-bearing gravels containing extremely large stones.
The estimated cost for this program is expected to range between US$3.5 and US$4 million. The Company is currently planning to raise additional capital through a financing to be completed during the first quarter of 2000. Upon approval of mining and environmental permits for the Santo Antonio deposit, commercial scale production is expected to proceed, anticipated the first quarter of 2001.
In addition to the Santo Antonio alluvial project, the Company has five kimberlite pipes within the Coromandel Project area which have shown favorable results for minerals indicating diamond potential. These pipes have not yet been bulk-sampled for their diamond content. Current plans will include a sample program for the pipes known as Capivara I, Capivara II, Capivara III, Regis III and Capao Grande.
TEL: (604) 689-7842 South Atlantic Resources Ltd.FAX: (604) 689-4250 Sophia Shane, Corporate Development
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