Pure Gold Minerals Inc -
29.2 carat yellow diamond discovered at Douglas project
Pure Gold Minerals Inc
PUG
Shares issued 26379471
1998-06-02 close $0.76
Wednesday Jun 3 1998
Mr. Donald Sheldon reports
On the company's recently acquired Douglas project in South Africa a 29.2 carat
yellow fancy diamond has been discovered. The diamond is valued at
approximately $1,400 per carat.
The new diamond will be added to the package of stones recovered last month
that already include several large, gem quality diamonds. Of particular note are a
clear (VVSI) 3.67 carat, a yellow (fancy) 3.80 carat and a pure white 6.67 carat
diamonds. The first 3.67 carat stone recovered during April is valued at $1,800
per carat. The 6.67 carat stone is valued at $1,540 per carat.
The Douglas project is a part of the joint venture agreement recently reached with
Thabex Exploration, a publicly trading (Johannesburg Exchange) South African
diamond exploration company. Pure Gold has the right to acquire a 51 per cent
interest in Thabex's alluvial diamond concessions in South Africa, including the
Douglas project, with details as summarized below:
Concession size: 450 hectares
Estimated reserves: 3,600,000 tonnes
at 1.1 carats/hundred
tonnes
Estimated price
per carat: $800(x)
Mining costs/100
tonnes $140
Plant operating
costs/100 tonnes $27
Admin, security and
rehabilitation
costs/100 tonnes $27
Total royalties 5 per cent
(x) All dollar figures based on an estimate of 3.6 Rand = CDN$1
Mining of the Douglas project began April 15, 1998. Production has just been
increased from an initial start-up rate of 100 tonnes/month to current levels of 500
tonnes/day. The first 30 days of production recovered 160 carats of diamonds.
Within the next quarter, production is expected to reach optimized levels of
50,000 tonnes per month.
The 450 hectare concession is secured by a mining permit and provides a 100 per
cent title to the joint venture.
Pure Gold will finance a total of $2,000,000 over the next 12 months to earn a 51
per cent interest in the project. The cash flow from the project should provide
positive proceeds to Pure Gold as funds are advanced. Cash raised through a
recent rights offering, ear-marked for the Alberta diamond project, will not be
used for this new venture. |
