Subject:
KWG Diamond Project Brazil, Update - Two exploration pits excavated,
12 diamonds recovered weighing a total of 6.58 carats
Date:
Thu, 11 Feb 1999 15:17:54 -0500
From:
portfolio@newswire.ca
To:
"Portfolio Email User" <portfolio@newswire.ca>
Attention Business/Financial Editors:
KWG Diamond Project Brazil, Update - Two exploration pits excavated, 12 diamonds recovered weighing a total of 6.58 carats
MONTREAL, Feb. 11 /CNW/ - KWG Resources Inc. (''KWG'') along with joint
venture partners Spider Resources Inc. (''Spider'') and Line Island
Exploration Inc. (''Line Island'') announce the initial results and diamond
recoveries from the first two exploration pits at the Contendas site,
centrally located on the 162,000 hectare property which straddles the border
of the Minas Gerais and Goias states of central Brazil. Four diamonds ranging
in size from 0.19 carat to 1.00 carat weighing a total of 1.66 carats were
recovered from the first pit, while 8 diamonds ranging in size from 0.30 carat
to 1.06 carat weighing a total of 4.92 carats were recovered (to date) from
the second pit. Processing of what is believed to be non consolidated
epiclastic crater material within deep (8 - 9 meter vertical depth) linear
depressions radiating out from a nearby lamproite intrusion continues at the
second site. Two lamproite dikes (one of which contained a microdiamond) were
encountered in diamond drill hole 97-04, the collar of which is approximately
12 meters away from the centre of the second exploration pit.
After the removal of up to 2 meters of overlying clay rich soils (which
contain only trace amounts of chromite + ilmenite), a 2 - 3 meter layer of
poorly sorted sand and gravel (containing minor amounts 1 - 2% chromite +
ilmenite) is encountered. Beneath this layer (which is referred to as ''uru
gravel'') a 1.5 meter thick layer of poorly sorted residual gravel is
encountered which typically contains high indicator mineral content up to 10%
ilmenite + chromite with minor garnet (locally referred to as ''high forma''
gravel). Thickening of this lower layer occurs in linear depressions, which
tend to radiate out from a local (40 meter distant) interpreted intrusion.
These are currently believed to represent residual accumulations of
disaggregated associated dikes. These ''V'' shaped features are quite deep
(2.5 meters) with steep sides tapering with depth into the surrounding highly
disturbed schistose bedrock, wherein the content of ilmenite and chromite
dramatically increases to the 30% range. Several nearby shallow excavations
completed down to the bedrock suggest an overall deepening of the overlying
soil + sand and gravel towards the center of the interpreted intrusion. The
latter high forma gravel, with special preference to the residual material, is
excavated and delivered to a diamond collection plant.
The diamond processing plant is currently operating at an average daily
throughput of 5.42 tonnes per day. The accumulated throughput at the plant to
date represents several charges of different types of material from the
above-described layers found in the initial two test pits. It is too early to
determine the average grade of any one distinct layer sampled and only
generalities can be made. It is apparent from the results to date that the
following generalities apply; the overlying clay soils contain no diamond, the
uru gravels contain an occasional rare diamond, while the residual gravel
contains the most diamond. The high indicator residual material is currently
being more extensively exposed in test pit number 2 for eventual excavation
and processing for diamond content.
This test plant is designed to recover only those diamonds with two
dimensions greater than 2 millimeters, and less than 16 millimeters. The feed
material from the exploration pitting program, initially passes through a
trommel adapted with an oversize coarse screen (16 mm) which liberates the
feed from any clay and rejects to a coarse holding bin all material greater
than 16 millimeters. The feed material then passes through a series of
stacked vibrating screens with three screen-sizes; 2 mm., 4 mm., and 8 mm.
The minus 2 mm is washed away to tailings, while the +2 mm. - 4 mm, +4 mm - 8
mm and the +8 - 16 mm size fractions are classified into three feed hoppers.
At regular intervals over the course of the day, each hopper is individually
emptied into the diamond recovery portion of the plant and diamonds are
recovered using an X-ray diamond Sortex (c) system. The reject tailings are
manually removed to the nearby tailings area. As each diamond passes through
the Sortex it is embarded with x-rays which causes a fluorescence in the
diamond which translates into a light signal picked up by a photomultiplier.
The photomultiplier activates an electrical switch, which in turn causes a
trap door to open causing the diamond (as well as its immediate surrounding
mineral grains) to fall into a double locked collection bin. Each ejection
event is recorded internally in the control box and is displayed on an LED
panel. The diamond lock box is removed from the site and opened under very
tight security each evening.
The near surface epiclastic accumulations of diamond bearing gravel
surrounding a series of suspected lamproite intrusions which coalesce to form
the 130 hectare Contendas structure, has been tursely examined. It is
currently interpreted that this epiclastic material located in deep (7 - 8
meters) channels, which has been the subject of this most recent exploration
activity is related to either; a complicated flash flood type situation
contemporaneous with the ultramafic intrusion, or it may represent residual
accumulations of disaggregated, preferentially eroded dikes associated with a
larger intrusive event, with the accumulations indicating the subcropping dike
trends.
The results of this exploration program will be used to guide the
anticipated follow-up program which is designed to determine the likelihood of
locating in-situ primary sources of diamond in the region. As stated in
earlier press releases, locating the in-situ source(s) of diamonds has been
the objective of much exploration in the region, particularly considering the
high number of large diamonds found in the region over the past two centuries.
The Paranaiba River and its four main tributaries (St. Antonio, St. Inacio,
Douradinho and Bagegem rivers) have yielded at least 49 documented alluvial
diamonds which exceed 50 carats in size, the largest being the Presidente
Vargas diamond found in 1938 and weighing 726.7 carats. Recall, that on August
26, 1998, another large diamond was recovered by a garimpo operating a vacuum
type dredge approximately six kilometers upstream from the confluence of the
Rio Verde with the Paranaiba river, which in turn is 4 kilometers upstream
from the Contendas structure. This location lies well within the Spider
Diamond Mineracao Ltda. exploration concessions, though the alluvial access is
equally available to garimpeiro activity as well as mineral exploration
activity. The diamond weighs an impressive 350.65 carats (the eighth largest
stone recovered in Brazil in recorded history), the color is described as
''G'' (rare white), clarity as high, little fluorescence, with no internal
flaws or inclusions, although there are some minor internal stress fractures
near the triangular cleaved base of the crystal. This diamond remains unsold
at this time. Spider plans to commence initially geochemical exploration in
order to locate kimberlite targets in the area upstream of this discovery, and
has already identified through air photo interpretation and site visits
several sites for the possible origin of this large alluvial diamond.
In October 1998, Line Islands entered into an agreement with Spider and
KWG whereby Line Islands could earn a 50% interest in the North block of
claims and a 10% interest in the South block of claims by initially making a
down payment of $C150,000 to Spider and KWG. The second condition of the Line
Islands agreement entails the exploration expenditure of $C350,000 on the
project over 24 months effectively starting the date of the receipt of the
above mentioned down payment, upon completing this latter expenditure Line
Islands will have earned its full entitlement to 10% in the South block (which
hosts Contendas) and 50% in the North block, nevertheless Line Islands will
earn 10% in the North Block and 2% interest in the South Block for every
$100,000 expenditure by Line Islands.
NO REGULATORY AUTHORITY HAS APPROVED OR
DISAPPROVED THE CONTENT OF THIS PRESS RELEASE.
-0- 02/11/1999
For further information: Pierre R. Gauthier, (514) 866-6001
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