Line Islands, KWG and Spider progress at Alto Paranaiba
KWG Resources Inc KWGR
Shares issued 82,200,128 Jan 28 close $0.28
Mon 31 Jan 2000 News Release
See Line Islands Exploration Inc (LIN) News Release
Mr. Scott Hogg reports
Line Islands Exploration and its partners KWG Resources Inc. and Spider
Resources Inc., would like to present an update of recent developments
related to the Alto Paranaiba property in Brazil.
A petrographic study of thin sections by Min Scan Consultants from the
drill core of pipes MK-1 through MK-5 have tentatively identified orangeite
characteristics. Orangeites are a class of kimberlite formerly known as
micaceous or Group II kimberlite until Mitchell and Meyer (1989) proposed
the new nomenclature. They are traditionally associated with the Kaapvaal
craton of Southern Africa and host mines such as the Finch, Roberts Victor,
Bellsbank and New Elands.
Partial samples weighing 15 kilgrams to 21 kilograms, approximately 10 per
cent of each drill core, were processed for microdiamonds by caustic
dissolution. No microdiamonds were recovered in this first small test
sample. In light of the petrographic variability of the bodies, evident
from the thin sections; the small size of the samples and the fact that
they represent a single location on bodies of considerable surface
dimension, more drilling and testing is necessary to make any definitive
assessment of diamond potential. Additional drilling will be carried out to
sample the pipes at different locations along their strike and width to
enable the different phases to be mapped, sampled and tested.
The plant is presently processing the readily accessible Contendas breccia
and gravels. The plant has recovered a diamond from Contendas material but
none from the MK sites to date. As reported in prior press releases, large
scale garimpero workings at this site recovered an estimated 5,000 carats
of diamonds and KWG in 1999 reported the recovery of 12 diamonds weighing a
total of 6.58 carats. It is intended that the plant will continue to
operate with feed from the Contendas site as well as bulk samples from
newly discovered kimberlites.
Exploration for additional pipes will continue in the area of the recent
discoveries. As well, the program will be expanded to include several sites
where prior KWG field investigations identified outcropping kimberlite.
Grab samples from seven bodies within the claim group were identified as
kimberlite on the basis of indicator mineral content and in one sample a
two-millimetre diamond was reported.
In addition, Line Islands is pleased to announce that it has concluded,
subject to regulatory approval, $150,000 in private financing consisting of
150,000 units. Each unit comprises one common share and one common share
purchase warrant. Each warrant entitling its holder to purchase one common
share at the exercise price of $1.20 per share for the first six months
after the date of issuance and $1.30 per share for the following 12 months.
Over the last 18 months, the company raised $1,535,000 in private
financing, and warrants and options exercise.
In April, 1999, Line Islands entered a joint venture agreement with Spider
and KWG on the Alta Paranaiba diamond project in Brazil. Line Islands
earned 30-per-cent interest after completing $850,000 in exploration
expenditures on Dec. 31, 1999. Under the terms of the agreement, Line
Islands has an option to earn an additional 10-per-cent interest for an
amount of $1-million and the issuance of 100,000 shares of the corporation.
The proceeds of this placement will enable Line Islands to make an
additional $112,000 exploration expenditure on the project. The balance
will be used for general corporate purposes.
Furthermore, following the approval of the shareholders and the Montreal
Exchange, the corporation will change its name to Dia Bras Exploration Inc.
effective Jan. 27, 2000, in order to reflect the focus on its key projects
in Brazil.
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