Shades of things to come Francois. Do you have a calculator? Do you know how to use it?
How to evaluate a big dyke It is the value of the diamonds silly!
News Release
Tuesday 28 January 1997
MINING
Rex Diamond Mining
INDEPENDENT CONSULTANT VALUES TONGO FIELDS AT US DOLLARS 3.3 BILLION
Toronto, January 28 - Rex Diamond Mining Corporation today
announced the results of the appraisal of its Tongo Fields
properties in Sierra Leone.
Dr. Luc Rombouts Rex's consulting geologist reports:
"Sierra Leone currently produces about half a million carats
per year worth US$200 to US$300 per carat. In average value, Sierra
Leone is second only to Namibia, but with much more frequent
occurrences of exceptionally large stones (970 and 770 carat stones).
Since the discovery of diamonds in Kono in 1930, Sierra Leone has
produced more than 50 million carats. In the 1950's and 1960's
diamond production peaked at 2 to 3 million carats per year placing
Sierra Leone second only to South Africa in total value. Virtually
all production was from alluvial sources. Known source rocks are the
kimberlite dykes (fissures) and small pipes of the KOIDU and the
TONGO-PANGUMA areas. Recently, local diggers started working the
large alluvial deposits in the ZIMMI region of Southern Sierra Leone.
Rex Diamond Mining Corporation has obtained leases covering the most
promising parts of TONGO and ZIMMI areas. The PANGUMA-TONGO dyke
trend covers an area of 30 km by 6 km wide. The Rex Diamond Mining
Corporation lease covers the eastern half of the PANGUMA-TONGO belt
and includes the most important kimberlite dyke zones: the LANDO,
KUNDU, TONGO and PEYIMA dykes (fissures). The Tongo kimberlite dykes
have been sampled, drilled and worked at the surface in the past.
Workings never extended deeper than 15 m.
The TONGO dykes are very rich (up to 3 carats/tonne) and constitute
an important high quality diamond resource. The continuity of the
dykes with depth has been proven down to 100 m by drilling by
SELECTION TRUST. Over a total strike length of 14,400 m and a depth
of 1,000 m the TONGO dyke system constitutes a huge diamond resource
of 18,897,150 carats worth US$3.3 billion. Small pipes are known
along the LANDO dyke zone and could further increase the resource
figure.
Assuming a value of at least US$175/carat for the diamonds in the
LANDO kimberlites and allowing for a mining dilution over a 1 m
stoping width, the average value content is US$140/tonne, amongst
the highest in the world. Total operating cost should remain well
below US$50/tonne (note: Rex operates its three fissure mines in
South Africa at a cost of less than US$25/tonne). Rex has built a
reputation as the specialist kimberlite fissure mining company in
South Africa. Rex has the know-how to evaluate and develop the KOIDU-
LANDO dyke system at Tongo into an important diamond mine.
The Zimmi Mining Lease along the Morro River, at the border with
Liberia, has great potential for alluvial diamonds and kimberlites.
The deeper channels, cut when the sea level was lower, are Rex's
prime alluvial diamond target. After a geophysical survey and bulk
testing, these deeper channels may quickly develop into an alluvial
diamond operation."
Dr. Luc Rombouts is a leading authority in worldwide diamond
evaluation and has acted as a consultant to major mining companies,
governments, the United Nations, and the World Bank. He was the
evaluator of the NWT diamond discoveries and is consultant for the
major Russian diamond projects.
While the production of gem diamonds has remained stable in the
recent years, there has been a sustained shift in consumer demand
towards higher quality and larger stones resulting in a strengthening
of prices in these categories. Only 18 percent of the world diamond
production (total est. 111,056,000 carats for 1996) is of gem
quality, but it represents more than 60 percent of its value (total
est. US$6,442 billion for 1996). With an average value of at least
US$175/carat, the Sierra Leone diamond properties underline the REX
commitment to be strategically positioned at the high end of the
market. Uniquely integrated REX combines the production of top
quality diamonds in South Africa and soon also in Sierra Leone, with
its own sorting, distribution and marketing organization in Antwerp.
CEO Serge Muller said: "Tongo Fields alone represents a potential
gross profit of at least US$1.4 billion for Rex."
Key Figures of the Tongo Fields Kimberlite Dykes
Key Figures of the Tongo Fields Kimberlite Dykes
-------------------------------------------------------------------------
Dyke Strike Kimb- Min- Depth Vol- Ton- Min- Carats US$/ US$
maxi- er- ing ume nage ing Ct (mil-
imum lite width grade lion)
(m) width (m) (m) (m3) (t) (Ct/t) (ct)
(m)
-------------------------------------------------------------------------
Lan-
do 6,300 0.32 1 1,000 6,300,000 16,695,000 0.80 13,356,000 175 2,337
Kun-
du 1,800 0.30 1 1,000 1,800,000 4,770,000 0.42 2,003,400 175 351
Ton-
go 1,500 0.25 1 1,000 1,500,000 3,975,000 0.25 993,750 175 174
Pey-
ima 4,800 0.25 1 1,000 4,800,000 12,720,000 0.20 2,544,000 175 445
-------------------------------------------------------------------------
Tot-
al 14,400 14,400,000 38,160,000 0.50 18,897,150 175 3,307
-------------------------------------------------------------------------
Serge Muller
CEO
Rex Diamond Mining
Where there are big diamonds, there are more big diamonds.
For the trivia buffs.
The World's Largest Rough, Uncut, Diamonds
Cullinan - 3,106.75 carats - 1905, South Africa
Excelsior - 995.20ct. - 1893, South Africa
Star of Sierra Leone - 968.80ct. - 1972, Sierra Leone
Zale - 890.00ct. - 1984, Africa
Great Mogul - 787.50ct. - 1650, India
Woyie River - 770.00ct. - 1945, Sierra Leone
Presidente Vargas - 726.60ct. - 1938, Brazil
Jonker - 726.00ct. - 1934, South Africa
Reitz - 650.80ct. - 1895, South Africa
Unnamed - 620.14ct. - 1984, South Africa
The World's Largest Polished Diamonds
Cullinan I - 530.20 carats - Pear Shape - Colorless - British Crown Jewels
Incomparable - 407.48ct. - Pear Shape - Yellow - Diamond Dealer, USA
Cullinan II - 317.40ct. - Cushion Cut - Colorless - British Crown Jewels
Great Mogul - 280.00ct. - Rose Cut - Colorless - Unknown Location
Nizam - 277.00ct. - Dome Cut - Colorless - Private Collection, India
Great Table - 250.00ct. - Rectangular Cut - Pink - Unknown Location
Indien - 250.00ct. - Pear Cut - Colorless - Unknown Location
Jubilee - 245.35ct. - Cushion Cut - Colorless - Private Collection, France
De Beers - 234.50ct. - Round - Yellow - Private Collection, India
RedCross - 205.00ct. - Square Cut - Yellow - Unknown Location
20 million tonnes X 1.5 Carots per tonne X C$450 per tonne= 13.5 billion dollars
40 million tonnes= 27 billion Canadian Dollars
2 million tonnes production per year would be a very significant portion of the world's production!
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