Hello Gord
Off the wire this morning:
April 28, 1999 09:34
Canabrava Diamond Corporation Announces Progress Report on Corporate Activities
VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--April 28, 1999--Canabrava (VSE:CNB) Canabrava Diamond Corporation (CNB-V) is pleased to provide the following update on its exploration projects in Canada and Brazil.
Brazil Canabrava Joint Venture
Management is delighted with the recent signing of a major letter agreement with SouthernEra Resources Ltd. Under the terms of the agreement, SouthernEra can earn a 50 percent interest in the Project by spending a total of US$20 million over 7 years, with a firm commitment of US$1.5 million in the first 2 years. The agreement provides SouthernEra with a number of options including (a) a facility to reduce its initial earn in commitment, (b) the right to explore and develop the alluvial resources on the Project, and (c) the ability to ultimately increase its interest in specific properties to 70 percent (see News Release dated April 6, 1999 for details).
A comprehensive technical review of the Project was completed by Canabrava in December, 1998. This process included the compilation of an extensive geochemical database, as well as a number of field trips to the Project area and surrounding region to investigate and sample key target sites and drainages. Fieldwork included selected sampling of various known diamondiferous kimberlite/lamproite pipes to establish base-line geochemical criteria. Several new pipes were discovered during this program, and some of the best indicator mineral chemistry to date has been identified. Confirmation of the success of this initiative has been the attraction of a new partner with the credentials of SouthernEra to the Project.
A technical team consisting of both SouthernEra and Canabrava representatives is currently in Brazil designing a work program and budget for 1999. Several priority areas and targets have been identified and these, together with addressing a large backlog of samples in the laboratory, will be the main focus of the program. The process of interviewing candidates for key positions has commenced with a view to recommissioning the on-site laboratory and initiating an aggressive exploration program within the next month.
Rio do Sono Joint Venture
A new Joint Venture to develop the alluvial diamond resources on the Rio do Sono Project has been signed with Paramount Ventures and Finance Inc. Under the terms of the agreement, Paramount will spend US$1 million to earn a 50 percent interest in the Project. An experienced alluvial miner, Baines and Company has been hired as Project Manager, with Canabrava as operator (for further details see News Release dated March 18,1999).
Significant progress has been made on the Project over the past month. Numerous target sites within the active river channel have been identified for sampling, and additional exploration is being conducted using ground penetrating radar and waterborne geophysical techniques. Equipment procurement and construction is 75 percent complete, and bulk sampling operations and the initial recovery of diamonds are scheduled to commence within the next month. A mining plan will be developed and the operation will be stepped up to full commercial production as soon as possible.
Macapa/North Bahia Joint Venture
Results from the sampling program completed on the North Bahia Project last year have been received and evaluated. A full suite of indicator minerals, including pyrope garnet, chrome diopside, chromite and picro-ilmenite, were recovered from the Redondao kimberlite and subjected to microprobe analysis. The geochemical characteristics of these minerals are not consistent with a high diamond potential, and consequently, no further work is planned on this project.
On the basis of a reconnaissance trip to the Macapa Project in December 1998, it was decided that the Rio do Sono Project offered a significantly better opportunity to deliver shareholder value in the near term, and consequently, further work on the Macapa Project has been temporarily suspended. Paramount is earning a 50 percent interest in the Macapa/North Bahia Joint Venture by funding the first US$500,000 in exploration expenditure. Approximately US$100,000 has been spent to date.
Canada Ontario Joint Venture
The recent signing of an Option/Joint Venture Letter Agreement with Kennecott Canada Exploration Inc., which incorporates the Whitefish Lake Project (100 percent CNB) as well as the KAP and Rocky Island Lake Projects (50 percent CNB, 50 percent Paramount), has positioned the Company's Ontario diamond properties for early success. The agreement grants Kennecott the exclusive right to acquire a 60 percent interest in the Project by spending C$25 million within seven years, or by advancing the Project to a decision to begin development and construction of a mine, whichever occurs first. Kennecott has a firm commitment to spend C$1.5 million within the first 18 months (for further details see News Release dated March 15, 1999).
A total of 2,140 modern alluvium, lake sediment and glacial till samples were collected during the 1998 field season (Whitefish Lake Project - 526 samples, KAP Project - 969 and Rocky Island Lake Project - 645 samples). The aims of the programs were (a) to follow-up on previously identified priority areas (Whitefish Lake Project), (b) to complete first phase indicator mineral sampling over claims blocks at a density of one sample per square kilometre (KAP Project), and (c) to undertake regional reconnaissance sampling over an extensive area in order to identify high potential areas for more focused exploration (Rocky Island Lake Project).
All results have been received and evaluated, and the Company is pleased to report that the above objectives have been achieved and surpassed. Results are positive beyond expectations. Abundant high interest indicator minerals have been recovered on all three Projects, and numerous discrete target areas have been identified for follow-up. On the Whitefish Lake Project 6 of the 12 priority areas defined in the 1997 program have been confirmed to show a high potential for locating kimberlite and, on the basis of indicator mineral distribution and compositions, a further 7 new priority areas have been identified. Two new kimberlite occurrences have been discovered on the Whitefish Lake Project. One is an outcropping dyke, and the second is float material associated with a well-defined indicator mineral plume. These discoveries provide conclusive evidence to support a previous conclusion based on grain morphologies that the majority of indicator minerals recovered to date have been derived from proximal source rocks.
In addition to several hundred chromites and kimberlitic picro- ilmenites, over 250 pyrope garnets were recovered from the KAP and Rocky Island Lake Projects. Included in these are a suite of highly subcalcic G10 garnets with compositions similar to some of the best recovered from Lac de Gras region in the Northwest Territories. Numerous chromites with highly favourable compositions have also been identified. The majority of these grains display morphologies and surface textures consistent with minimal transportation in the secondary environment. Additional claims have been staked to secure the best areas, and more land will be secured following additional work.
Planning with Kennecott for a Phase Number 1 spring exploration program is well advanced, with a target date of early May for mobilization. The focus of the program will be to follow-up on the highest priority areas. Kennecott geophysicists are currently evaluating the full airborne dataset and, several high potential anomalies have already been identified. Details of a more extensive summer program will be finalised once the spring program is underway. Significant steps have been taken over the past few months to address the financial strength of the Company. In December 1998, the long term debt with Southwestern Gold Corporation was settled by way of a share for debt swap, and a Private Placement completed in April, 1999 netted $2.4 million subject to regulatory approval. With significant working capital and funding on the major projects secured through partners, Canabrava is well placed to cover corporate overheads in the medium term in addition to generating new projects.
The Company is extremely pleased to welcome SouthernEra and Kennecott as new partners. Both companies are well known for their aggressive approach to exploration, and they bring extensive experience and enviable records of success in diamond exploration to our Projects. In the short term, the Rio do Sono alluvial project with Paramount will bring cash flow to both companies.
Canabrava Diamond Corporation is actively exploring for diamonds in Brazil and Canada and looking at other opportunities worldwide. The Company is 59.6 percent owned by Southwestern Gold Corporation (SWG-T).
Rory O. Moore, President
Regards |
