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Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: .Trev who wrote (14926)	2/18/1999 12:49:00 PM
From: Gord Bolton	Read Replies (1) \| Respond to of 26850

off topictraders only. MSC.U ASE Halted last news Jan. 20th, 98--very low share price $.025 last year high $.60 MESSINA DIAMOND CORPORATION - LARGE OPEN PIT DIAMOND MINE INDICATED AT LIQHOBONG -------------------------------------------------------------------- - 700,000 CARATS PER YEAR POTENTIAL - 2,600,000 TONNES PER YEAR INDICATED - US$40,000,000 AVERAGE GROSS ANNUAL REVENUE PROJECTED - 22% PROJECT INTERNAL RATE OF RETURN - POTENTIAL INCREASE OF UP TO 1,700% IN MESSINA'S ANNUAL PRODUCTION -------------------------------------------------------------------- TORONTO, Jan. 20 /CNW/ - Messina Diamond Corporation (TSE - MSC.U) has received a positive pre-feasibility study for its Liqhobong Project in Lesotho from Fluor Daniel Southern Africa (Fluor). According to Fluor, based on currently available information and the latest sample results, a 2.6 million tonne per year open pit mine can be constructed at an estimated initial capital cost of US$52 million to produce approximately 700,000 carats (ct) annually for approximately 11.5 years, generating average gross annual revenues of around US$40 million. Such a project would generate an internal rate of return of 22%. An extensive bulk sampling program on the two kimberlite pipes at Liqhobong has been underway since July 1997. The sampling of the Satellite Pipe (1.6 ha) has now been completed and has confirmed the earlier reported partial results (August 13, 1997 and November 13, 1997 press releases). A total of 6,098 ct of diamonds were recovered from the 8,871 tonne total sample, representing a recovered grade of 68.74 carats per hundred tonnes (cpht). A recent evaluation of the complete parcel of diamonds has indicated a weighted arithmetic average value of US$38.50/ct. Gemstones from this parcel have been previously valued at up to US$1,400/ct. Sampling of the first 12,722 tonnes from the large Main Pipe (9.5 ha) was completed in December 1997. This sample (representing approximately 30% of the planned sample weight from the Main Pipe) recovered 2,061 ct, representing a recovered grade of 16.2 cpht. A recent evaluation of these diamonds has indicated a weighted arithmetic average value of US$63.93/ct. Fluor's prefeasibility study, based on the total results of the bulk sample from the Satellite Pipe and the initial 30% of the bulk sample from the Main Pipe, has indicated that an economic diamond mine can be constructed at Liqhobong for approximately US$52 million over an 18 month period. The study recommends that the open pit mine operate at 7,200 tonnes/day (2.6 m tonnes/year), initially blending ore from the Main and Satellite Pipes. After six years the mine would be expanded to treat 12,000 tonnes/day (4.4 m tonnes/year) of Main Pipe kimberlite only, at an estimated capital cost of US$20 million. Diamond production would be approximately 700,000 ct annually during the project life of approximately 11.5 years. Fluor's estimate of project operating costs of US$4.43 per tonne indicates that Liqhobong could be one of the lowest cost operators worldwide and could provide an operating margin of approximately 67%. The prefeasibility study was costed in South African Rand, converted at an exchange rate of R4.85 to US$1.00. Fluor verified all sample results and evaluation procedures utilized by Messina, but did not evaluate diamond quality or value itself. Messina plans to continue the Main Pipe sampling and complete a bankable feasibility study during 1998. With Messina's current annual rate of production of approximately 37,000 ct per year from the Star and Messina mines, this potential additional production from Liqhobong could increase Messina's annual production by up to 1,700%. This increase would make Messina the second largest diamond producer in Southern Africa behind DeBeers based on current production levels. The forward-looking information contained in this press release, including estimates of grade, future production, operating costs and capital costs, is based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from expected results. Actual results may differ materially as a result of, among other things, the grade, quality and recovery of diamonds mined varying from estimates and current samples, capital and operating costs varying significantly from estimates, unexpected delays, changes in exchange rates and fluctuations in the price of diamonds. -30-