Etruscan, Mountain Lake get permits for diamond projects
Etruscan Resources Inc (TSX:EET)
Shares Issued 68,188,020
Last Close 6/22/2005 $1.62
Thursday June 23 2005 - News Release
Also Mountain Lake Resources Inc (TSX-V:MOA) News Release
Mr. Gerald McConnell of Etruscan reports
ETRUSCAN GETS GREEN LIGHT TO DEVELOP SECOND ALLUVIAL DIAMOND PROJECT IN SOUTH AFRICA
Etruscan Resources Inc. and Mountain Lake Resources Inc.'s South Africa subsidiary Etruscan Diamonds (Pty.) Ltd. has received the necessary mining permit from the South African government to proceed with the development of the Klipgat alluvial diamond concession and mining operations have recommenced on the concession. The Klipgat concession is located in the Mooi River Valley approximately 40 kilometres to the east of Etruscan's Tirisano diamond mine operation. The Klipgat concession represents the second alluvial diamond gravel run which Etruscan is developing in South Africa. Etruscan Diamonds has also received a prospecting permit from the South African government allowing Etruscan to proceed with exploration on three concessions located immediately south of the Klipgat concession (Mooi River concessions).
Klipgat Mining
Etruscan Diamonds has re-established a contract mining operation on the eastern section of the Klipgat concession. Gothoma Diggings, the contract operator, has commenced mining and recovery operations using a plant that has been erected and is fully operational for expanded production of 40,000 cubic metres of diamondiferous gravel per month. Gothoma Diggings (formerly Basson Delwery) mined in this area of the Klipgat concession from February, 2002, to April, 2004, and produced approximately 16,500 carats which were sold for in excess of $6.4-million (U.S.) at an average price of $392 (U.S.) per carat.
Klipgat development
The second phase of development of the Klipgat concession will consist of a bulk sample program focused on testing the gravels on the floor of the Mooi River Valley to determine the parametres for construction and development of a diamond recovery facility. Etruscan Diamonds completed a regional airborne gravity survey, which identified a number of potential large sinkhole features west of the existing contract-mining site. Large sinkhole features are known to be associated with diamondiferous gravels. For example, the Tirisano diamond mine is processing gravels from a well-defined sinkhole that is approximately 800 metres long and 350 metres wide.
The airborne anomalies at Klipgat have been confirmed by detailed ground geophysical surveys and the bulk sampling program will investigate a potential sinkhole target with a strike length of 1.2 kilometres that is up to 300 metres wide. The proposed program will consist of systematic reverse circulation drilling to determine the volumes of prospective gravels in this area followed by the extraction of a 40,000-tonne or 20,000-cubic-metre bulk sample. The gravels will be trucked six kilometres to the existing contract mining plant for processing to determine the grade and quality of the contained diamonds. This program will take approximately four months to complete and will provide the resource base for a feasibility study to develop a new diamond recovery facility.
The Klipgat project is being developed in partnership with the Bakwena Ba Mare A Phogole Community, the local black economic empowerment (BEE) community located on the Klipgat concession. Gothoma Diggings will employ a number of the community members as part of Etruscan's social and labour plan to facilitate skills transfer to community members.
Mooi River concession exploration
Following the successful identification of significant sinkhole features using airborne gravity techniques, Etruscan Diamonds will continue with systematic follow-up surveys on the Mooi River concessions which are located south of the Klipgat concession. Field crews are being mobilized to carry out ground gravity surveys over three more airborne targets in the next two weeks. Anomalies will be drill tested to determine gravel volumes and bulk sampled as warranted.
The Mooi River concessions are being developed in partnership with the WakeMin Consortium, a BEE group led by WakeMin (Pty.) Ltd. In order to achieve broad-based BEE participation, at least 40 per cent of the WakeMin Consortium will be owned by local community and women's groups including the Ngakane Community.
WakeMin MRD, a subsidiary of WakeMin (Pty.) Ltd., will be retained to undertake the metallurgical work on the Mooi River concessions. WakeMin MRD is a mineral process engineering and operations company which has been retained by European Diamonds as the contract operator of the diamond recovery facility at European Diamond's Satellite Pipe development at Liqhobong in Lesotho. According to media reports, Liqhobong facility is scheduled to commence production shortly at a projected production rate of 420,000 tonnes per year at an average grade of 69 carats per hundred tonnes (290,000 carats per year).
Gerald J. McConnell, president of Etruscan Resources, stated: "We are very pleased to have received approval from the South African government to proceed with development and mining on the Klipgat concession and exploration on the Mooi River concessions. We understand that the two permits that we have received are among the first permits to be granted under the new mining legislation in South Africa. We believe that our success in obtaining these permits is a direct result of our corporate philosophy to partner with the local communities that surround our properties. Etruscan embraces the spirit of Black economic empowerment, as set out in the South African BEE Charter, and our partnerships with the Bakwena Ba Mare A Phogole Community and the WakeMin Consortium demonstrate this.
"Based on the historical diamond production records from the Mooi River gravels, we anticipate positive results from the bulk sampling program on the Klipgat concession. Historical production data from the contract mining operation at Klipgat have demonstrated that economic grades from high-quality diamonds are to be expected from these gravels. We are very excited about the diamond potential in the Mooi River Valley region."
K. Kirk Woodman, PGeo, and senior project geologist is the qualified person overseeing Etruscan's diamond projects in South Africa.
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