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Gold/Mining/Energy : Canadian Diamond Play Cafi -- Ignore unavailable to you. Want to Upgrade?

To: Famularo who wrote (73)	7/24/2002 4:03:53 PM
From: Just G	Read Replies (1) \| Respond to of 16206

Another point of View Great thread Frank. Regards G Date : July 25, 2002 minesite.com De Beers Finds Difficulty In Maintaining Relationships With Joint Venture Partners. The following story is quite short, but it should give food for thought for any junior mining companies contemplating, or already involved in , a joint venture with the South African diamond giant De Beers. Canadian listed Kensington Resources has just such a relationship with De Beers Canada Exploration at the Fort a la Corne diamond field in Saskatchewan where more than seventy one kimberlites have been identified, making it one of the largest diamondiferous clusters in the world. Kensington has just been told quite casually by De Beers that it has recovered another three diamonds from drill samples taken in 2001 from the 141 kimberlite pipe. And one of these diamonds was a macro weighing no less than 3.35 carats which came from “the upper part of drillhole 141-20 during final diamond recovery from previously unexamined clay-rich samples. The 3.35 carat stone is the largest diamond recovered to date for this project and on first inspection appears of similar quality to diamonds recovered previously from pipe 141.” This deadpan announcement was clearly agreed between the two companies, but it is utterly astonishing that such a stone could have been missed and the question has to be asked as to why the clay rich samples were not examined. No answer can be expected from De Beers and nobody from Kensington Resources wanted to comment as the relationship between the two companies has had its difficult moments in the past. Back in September 2000 Monopros, as the De Beers subsidiary in Canada was then called, announced that diamonds recovered from bulk samples taken at Fort a la Corne had been understated. The actual announcement by Monopros read as follows: “The most significant factor arising from the 1999 work was the unusually large number of diamonds recovered from the x-ray tailing material from the Sortex recovery plant. Monopros is taking steps to re-examine the entire 1997 tailings collection in view of these results. In addition investigations are underway to fully assess the treatment history of all pre-1999 macrodiamond recovery samples.” In fact Monopros agreed to re-sort all the Sortex tailings back to 1990. It appears that nothing much has changed at Monopros except the name. An expert in the diamond industry suggested tactfully that there is either a degree of incompetence or else it is something a little worse. The plain fact seems to be that De Beers finds it very difficult to maintain standards of ethics, efficiency and communication expected by joint venture partners and Mountain Province is cited as a case in point. One minute it was all go and the next De Beers was backing out. The other two diamonds which De Beers has stumbled on at Fort a la Corne are much smaller and are said to have been “recovered during a routine tails audit of +4 mm material from selected samples acquired during the 2001 drilling program, De Beers Canada Exploration Inc. reported the recovery of two additional stones weighing 0.28 carats (drillhole 141-28) and 0.125 carats (drillhole 141-23). These macrodiamonds were forwarded to De Beers facilities in London for valuation. Final results for three clay-altered samples, which had proved troublesome to treat and examine, are expected from De Beers shortly.” Once these values and results are received, they will be incorporated into a final, updated version of the July 2002 report entitled Updated Evaluation Report on Kimberlite #141 as at July 2002 (Incorporating Kimberlite #140) which was delivered to Kensington last Friday - a good four months later than promised and all of five days before De Beers admitted its little mistakes. How long the update will take to produce is anyone’s guess, but it will have to be quick as the new data will be needed when planning the 2002 exploration and evaluation programme for 2002 which is due to be finalised in the first week of August