George, Since Nora Exploration was one of the original 12 picks, here's an article that was in the Northern Miner (February 1999)
Nora explores for Namibian diamonds
BY JOHN CUMMING
Among the ranks of Canada's diamond producers, one company often overlooked is Montreal-based Nora Exploration (NXI-M), which is mining the rich beach deposits found along the coast of Namibia in southwestern Africa.
For the past two years, Nora has been exploiting its 700 sq. km Otjua concession, which covers 140km of coastline, including beaches from Grosse Bucht (near Luderitz) in the north to North Rock in the south. The concession is 100 meters wide above the high-water mark and extends 5km into the ocean.
Nora first made its presence known in the region through the US$ 6.5 million acquisition of a 47% interest in Otjua Minerals, a privately held Namibian company whose remaining interest is held by Elizabeth Bay Diamond, which, in turn, is owned by Nora's chairman, Johannes Kleynhans of South Africa.
Since 1990, Otjua Minerals has been producing diamonds from the concession under contract to Namdeb Diamond Corp. (Namdeb), which owns the underlying mineral rights and purchases all Otjua's production. Namdeb is the country's leading diamond miner and is equally owned by the Namibian government and De Beers Consolidated Mines (DBR-Q); Following the acquisition, Nora boosted the capacity of Otjua's diamond recovery plant to 50 from 8 tones per hour. However; further investment in the operation has been delayed pending Nora's attempt to renegotiate its contract with Namdeb.
"It's a valid contract, but it's not suitable for a public company such as Nora", says Nora President Pierre Léveillé. "For instance, there is a confidentiality clause whereby we cannot disclose any production or exploration data, making it difficult for us to promote the company. That's why we are still a minority shareholder, we would like to buy the balance and be the sole owner of the contract, but only when it is renegotiated to our satisfaction".
Another difficulty for Nora at Otjua is the stipulation that once mining is under way in a designated area, that area must be completely mined out before the company can move on to other parts of the concession. As operations are just shy of breaking even, Nora is anxious to skip ahead to areas that have three times the grade of the area that is currently being mined.
Once the renegotiation is complete, Nora would like to expand operations at Otjua to at least three plants in order to balance out production and increase profits.
As Nora sorts out its contract with Namdeb, it continues to focus on its Namgem marine diamond concession. The 23,000 sq. km property is between 50 and 150 km off the Namibian shore, immediately west of Namdeb's main set of concessions (T.N.M., March 30 April 5/98) in an area extending northwards from the south of the Orange River along the outer edge of the continental shelf and slope.
"This is Nora's main potential and asset", says Léveillé.
The company has been steadily building up its interest in the Namgem concession, which now stands at 40%. With the imminent issuance of 1.1 million shares, Nora will have a 50% stake and further payments totaling US$720,000 will boost that figure to 60%. The remainder is held by Namibian Gemstones Mining Corp. (Namgem) a private company whose largest shareholder is a Namibian businessman.
As part of its earn-in, Nora funded a US$1,2 million geophysical survey in 1997. The survey, performed by a research center affiliated with the Geological Survey of South Africa and the University of Cape Town, targeted areas 200-500 meters deep and employed echo sounders for bathymetry, sidescan sonar for sea-floor surface-feature mapping, and seismic systems for sediment profiling.
The study found that within about one-fifth of the concession, the sea bed consists exposed rocky areas or rock covered by 1 to 2 metre veneer of unconsolidated sediments. In these areas, there is evidence of erosional activity in the form of paleo-channels, marine terraces and incised gullies. The size of the wave-abraded areas is substantial, at roughly 1,900 sq km.
Nora plans to spend about $3 million this year following up on the study, with $500,000 earmarked for geophysical work, and the balance to be spent on limited sampling. To help fund this program, Léveillé excepts to close another placement by February.
Once Nora has established specific targets at Namgem, it will be necessary to carry out a more ambitious bulk-sampling program, perhaps with the help of a senior partner.
Meanwhile, farther north in Namibia, Nora has acquired half interest in two marine-diamond concessions that total 190,500 ha and are situated between the 100 metre and 200 metre isobaths.
Nora is hammering out the details of two joint-venture agreements with the concessions' private owners, Woduna Mining Holdings and Karas Mineral Holdings. After that, the partners plan to carry out a $400,000 geophysical study similar to the Namgem study.
Regarding Nora's marginal Ghanaian alluvial diamond concessions, where the company started out in Africa in the nid-1990s, Léveillé says the low-maintenance concessions will be retained in case there is a rebound in the market for near-gem diamonds.
Regards,
John Stella
Investor Relations
Nora Exploration Inc. |
