Option secured to purchase Postma diamond mine, South Africa
Clear Creek Resources Ltd CK
Shares issued 3,251,001 Jan 30 close $0.70
Tue 3 Feb 98 News Release
Mr Wade Dawe reports
Clear Creek Resources has entered into an agreement to acquire a 100%
shareholding in a South African company, Blakeley Investments (Pty) Ltd,
which holds an option to purchase an operating open pit diamond mine (known
as the Postma mine) in the Postma kimberlite pipe. The site is close to the
town of Postmasburg and 170km west-northwest of Kimberley, South Africa.
An independent geological report on the Postma pipe suggests that the pipe
could be mined to a depth of 340m and postulates recovery of about two
million carats. The eastern part of the pipe has been mined to a depth of
40m.
The Postma kimberlite is believed to have been initially exploited in the
early part of the century, but the operations reportedly ceased after
accidental flooding of the pit. The pit was recently dewatered, a
crusher-concentrator plant was built, and mining activities have now
resumed. Production data from the dewatered pit indicates a grade of 30
carats per 100 tonnes. A high percentage of gemstones is present, including
very high quality blue-whites, with some stones as large as seven carats. A
conservative but economic grade of 17.5 carats per 100 tonnes has been
estimated for the entire pipe, with an average selling price of about
US$120 per carat.
Management believes that the project holds enormous potential. Grades may
be higher because a grade diluton may have been caused by the very high
(around 30%) content of locally-derived xenoliths in the present pit. A
ground-based magnetometer survey and geological survey suggest that the
pipe may be more than two hectares size. The present pit only occupies a
limited portion of this total area.
In addition to the Postma kimberlite pipe reserves, additional reserves may
be present in a concealed kimberlite dyke, which was indicated by the
geomagnetic survey. The dyke, which is probably 0.5m to 2m thick, appears
to traverse 1.4km of the property. The potential for possible large blows
on the dyke remains to be evaluated.
Blakeley has entered into an option agreement with Northwest Diamond
Company (Pty) Ltd pursuant to which Blakeley has been granted an option to
purchase from Northwest the Postma mine as a going concern. The option
period commences on March 1 1998 and will run for 180 days. The 180 day
option period will be used to undertake drill and bulk sampling
investigations of the Postma kimberlite and the associated kimberlite dyke,
to check the equipment, and to test the reliability, production capacity
and operating costs of the processing plant.
The purchase consideration for the mine will be 4.1 million South African
rands (equivalent to approximately C$1.21 million at the current rate of
exchange). During the option period, Blakeley will lease the Postma mine
and its infrastructure at a cost of 180,000 South African rands
(approximately C$53,000 at the current rate of exchange) per month. Sales
proceeds and profits from all diamonds recovered during the option period
will accrue to Clear Creek.
By exercising the option, Clear Creek will also acquire the fixed assets
and the numerous movable assets that form the basis of the site
infrastructure and current mining operation. The fixed assets include two
parcels of land (27.5 hectares) in Postmasburg with their various
improvements (office block, store roms, living quarters, civil work for
the fixed plant). Movable assets include earth-moving machinery, transport
vehicles, the kimberlite processing plant, and various items of
miscellaneous equipment, with spare parts and office furniture.
In addition to the payment to Northwest to exercise the option,
consideration payable by Clear Creek for the total shareholding in Blakeley
will be as follows:
1) C$20,000 upon signature of the agreement, which has been paid;
2) 100,000 shares in Clear Creek to be issued within five days of VSE
approval of the transaction; and
3) Within five days of the exercise of the option, a further C$50,000
plus 900,000 shares in Clear Creek, which shall be subject to further
regulatory approval in due course.
In addition, a finder's fee of 100,000 shares is payable when the option is
exercised.
Clear Creek views the Blakeley takeover as an exciting opportunity to
acquire a going concern whereby immediate profits can be realized in the
first year of production, and with enormous exploration potential. The
takeover bears witness to management's determination to seek out and
acquire world class assets to add value for the benefit of all
shareholders. Following the recent acquisition of the option to purchase
the Good Hope alluvial diamond property on South Africa's west coast, and
the better-than-expected results presently emerging from that test program,
the Blakeley takeover affords another unequivocal demonstration of
management's commitment to a defined strategy of expansion in the
richly-endowed diamond fields of South Africa.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
