here's an article from the northern miner last week on the work that is ongoing in Brazil w/ Verana Minerals ( VMCO) THI has a 50% interst and a work commit of $2MM I think.
Trans Hex renews quest for Brazilian diamonds
- By Stuart McDougall
Trans Hex International (THI-T) is once again searching Brazil's river
systems for alluvial diamonds.
The Toronto-based company's latest venture centres on a 49,000-ha
property stretching along 50 km of the Rio Grande River. Trans Hex can
earn a half-interest in the property from owner Verena Minerals (VMCO-C)
by spending US$2 million on exploration over the next three years, with
funding thereafter to be expended on a pro rata basis. The company will
also act as project manager.
Situated in the eastern state of Minas Gerais, the Rio Grande property
extends up to 6 km inland from either bank of the river after which it is
named. The property's gems are found in gravel horizons representing
paleochannels and terraces directly overlying bedrock. Where exposed by
garimpeiro workings, the gravels average between 2 and 4 metres in
thickness, contain well-rounded boulders and can occur up to 2 km from
the river's present course.
Previous exploration at Rio Grande has been limited to local mining
activities, with two such operations ongoing and a third now dormant.
This lack of modern exploration, however, has not altered the company's
perception of the property's potential.
"Rio Grande certainly appears to contain the thickest gravel we've ever
seen in Brazil," says Trans Hex President Neil Hoogenhout. "And from what
we've seen of the garimpeiro's sales records, they are extracting some
good-looking stones... though the smaller ones are left behind."
Trans Hex's first endeavor in Brazil began in late 1995, immediately
following its incorporation in Ontario as the international arm of Trans
Hex Group of South Africa, which retains a 65% interest in the company.
The agreement, which was with a private company, involved a property in
the northern state of Tocantins, but results proved discouraging and the
property was eventually dropped late last year.
In the ensuing months, Trans Hex turned its attention to the more
prospective Minas Gerais, including a brief pass over the Canabrava
diamond property, which was then being explored by Teck (TEK-T) and
Canabrava Diamond (CNB-V). Concurrently, the company signed a
letter-of-intent with Verena for Rio Grande, which has since become its
property of choice.
While modern exploration at Rio Grande is wanting, garimpeiros mined more
than 5,333 stones from 1985 to 1997 in the Bandeira area. The present
value of those diamonds, adjusting for historical inflation, is estimated
to be US$1.8 million or US$401 per carat. The mineralized gravels grade
between 0.02 and more than 10 carats per cubic metre. The grades were
substantiated somewhat by a bulk-sampling program carried out by the
local miners and Verena a few months prior to Trans Hex's involvement.
The samples, consisting of 40 and 420 cubic metres, were taken within 10
metres of each other. From the smaller sample were recovered eight stones
weighing 6.1 carats, which were subsequently sold for US$218 per carat.
Sixty carats were liberated from the larger sample, with six-tenths of
that total contained in 11 stones ranging in weight from 1.6 to 5.85
carats. That package fetched an impressive US$625 per carat on the
market.
A Verena press release on the program's results states that there are
still 250 ha of unmined continuous gravels at Bandeira. At an average
thickness of 2 metres, these gravels are believed to contain 5 million
cubic metres of mineralized material.
Since signing the letter-of-intent last May, Trans Hex has mapped the
ground surrounding all three areas. This, along with results from
ground-penetrating radar and aerial photography studies, has resulted in
the identification of several additional areas prospective for
mineralized gravels.
However, before any advanced exploration can begin, the partners must
first acquire surface rights for those portions of the property that are
farmland. If land is privately owned by local farmers, a company is
required to satisfy their demands without governmental assistance.
"The mineral title only excludes someone else from that area," explains
Hoogenhout. "Our main goal for the immediate future is to tie up all the
land positions we've looked at so far, particularly the surface rights."
Despite this uncertainty, Hoogenhout remains confident in his company's
ability to reach agreements, especially with farmers owning heavily
vegetated areas. "Because full rehabilitation is now required, the
farmers know they can force you to replace the topsoil once you've
finished and thus make it ready for farming."
Once a sufficient number of agreements have been reached, the company
will begin a program of widely spaced drilling to determine the lateral
extent and thickness of gravels in selected areas. This will be followed
by tightly spaced drilling to pinpoint areas for trenching and bulk
sampling.
Of potentially longer-term significance at Rio Grande is its thin veneer
of overburden, which has so far averaged 2 metres in thickness and not
more than 5 metres. This is quite different from the company's properties
(and those of its parent company) along southern Africa's famous Orange
River, where overburden can reach up to five times the thickness of the
diamond-bearing gravels.
"The negative to Rio Grande is all the farming, and that's why we are
concentrating on the surface [rights] situation," says Hoogenhout.
At North Bank, which is on the Namibian side of the river, Trans Hex
hopes to begin excavating two trenches early next year. The program,
which depends on a positive outcome to surface rights hearings, set to
renew in November, will involve the extraction of more than 460,000 cubic
metres of overburden to reach 149,000 cubic metres of gravels deposited
in a meso-aged (3-to-5-million-year) paleochannel.
Each trench will test an area selected from results of 122 of the 770
holes drilled into the channel. Results from the trenches are expected to
provide an upper limit estimation of the grade of the channel's estimated
30-million-cubic-metre resource.
Trans Hex funds 75% of the exploration costs on the property as part of
its requirement to maintain a half-interest. The rest is being covered by
Lazare Kaplan International (LKI-A) and a private Namibian company, each
of which owns a 25% interest in the property.
Meanwhile, a similar program is continuing at Trans Hex Group's Baken
mine on the South African side of the river. The program is testing the
arc of the 7-km-long-by-1-km-wide paleochannel currently being mined and,
if successful, could triple the mine life, currently estimated at six
years.
Hoogenhout, who is an executive director for Trans Hex Group, says a
recent miner's strike has delayed results but that work is now back on
schedule. This may turn into somewhat of a blessing as the company's
recent diamond sales were affected by Asia's financial woes and doubt in
North America's ability to sustain economic growth.
"It's unfortunate, but it does put us at a better base to ride the
turnaround," Hoogenhout says. "The problem is predicting when that is
going to happen -- probably earlier next year." |
