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Gold/Mining/Energy : Kensington Resources Ltd. (V.KRT) * Diamond in the rough! -- Ignore unavailable to you. Want to Upgrade?

To: Digrdug who wrote (5032)	2/19/2001 6:30:26 PM
From: brian krause	Read Replies (1) \| Respond to of 5206

From halcro on the SH board. minesite.com DE BEERS STARTS TO INCREASE PRESSURE ON KENSINGTON RESOURCES AT FORT A LA CORNE KIMBERLITE PROJECT. De Beers is starting to hot up the pace at the Fort a La Corne kimberlite project in Saskatchewan, where it is in joint venture with Kensington Resources, just ahead of the results from the 2000 drilling season. These are likely to be quite exciting and anticipation has hotted up as a result of the recent announcement from its neighbour Shore Gold, which is carrying out a similar exploration programme on the Star kimberlite, that it has processed a total sample of 750.9 kgs of split kimberlite core, taken over a continuous interval of 144.2 metres, and it resulted in an estimated grade of 31.2 carats per 100 tones of ore. Hopefully the Kensington /De Beers joint venture will come up with something comparable, but the main criticism made of the Saskatchewan kimberlite pipes is that they do not seem to contain any large stones. This has stung De Beers into action and a guru has been imported from South Africa, one Johan Ferreira, who has come up with a forecast of the odds against production of smallish stones around 1 carat and bigger ones of 4.5 to 10 carats in several of the pipes which have been tested so far. How he does this is not that easy to understand, but he seems to have established a good track record and is highly regarded by De Beers. His forecasts have apparently been very cheering. No details have yet been announced, but rumour has it that on one kimberlite he has forecast one diamond in the 0.7 to 1.2 carat category for every 70 tones of ore mined and on another a stone in the 4.5 to 10 carat group for every 400 tonnes mined. This makes a lot of difference to the whole concept of Saskatchewan diamonds as a simple sum shows. It is early days to consider the size of a mining operation but if , for the sake of simplicity, 4,000 tonnes was treated daily, 10 large stones would be recovered and this would make a hefty difference to the overall value that would attach to the grade of the mine. Maybe De Beers is limbering up for the squeeze. It is never any fun being a junior partner to a giant and it is quite possible that De Beers will now put everything on fast forward in the hope that Kensington will not be able to come up with its share of the cash and will, therefore, be diluted. A proposed exploration budget of C$10 million for the 2001 season would mean that Kensington has to find the best part of C$5 million. It could do it, but there would be pressure. Alternatively, and there are long odds against this happening, De Beers might be so convinced by its guru that it might propose to proceed to mining, provided the overall grade from bulk sampling these particular kimberlites was satisfactory. We are then talking real money - possibly C$500 million. Again the pressure would be on Kensington, but a high proportion of the funds could be obtained from bankers and the Canadian government itself would want to see Kensington maintaining its share. The last possibility, therefore, is that De Beers might make a pre-emptive strike with a bid for Kensington. This would mean, however, that all information on the exploration programme would have to be put in the shop window so that shareholders could make up their minds. De Beers does not like transparency, so this does not look too likely and anyway the directors and friends of Kensington claim to have over 50 per cent of the shares under their control. Whatever the outcome it is clear that there is going to be a fair bit of action humming round Kensington in the near future. The fact that the theory of no large stones in Saskatchewan has been disproved to the satisfaction of De Beers should get the ball rolling. 20 February 2001