Lets put this here too....
NATURAL RESOURCE INVESTOR
& WORLD GOLD STOCK REPORT
/ / / FAX ALERT #8, Vol. 1999 / / /
(company-sponsored investor relations report)
CANABRAVA DIAMOND CORPORATION (VSE:CNB)
KENNECOTT SIGNS $C25-MIL JV WITH CANABRAVA
TO CONDUCT MAJOR DIAMOND EXPLORATION
PROGRAMS ON CNB'S PROSPECTS IN ONTARIO,
CANADA
Company Also Signs $US 1-mil JV to Start
Production on 15,000-Hectare
Alluvial Diamond Property in Brazil
FAX HOTLINE FOR MARKET HOURS 3/26/99
Canabrava Diamond Corporation (VSE:CNB) has made a name
for itself with
extremely well-conceived Canadian diamond exploration
programs. Under the
direction of its president, Dr. Rory O. Moore, who formerly
managed highly
successful programs at Diamet and BHP, CNB has spent the past
two years
exploring in Ontario.
What Canabrava was able to accomplish was considerable
success in defining
numerous targets that look quite promising for the discovery of
diamondiferous
kimberlite pipes. These explora-tion programs are on the
Whitefish Lake
Project, 100% owned by the company, and on the KAP and Rocky
Island Lake
Projects, 50% owned by CNB and 50% by Paramount Ventures
and Finance Inc. The
areas include more than 200,000 hectares of staked and leased
lands, and are
located northeast of Wawa, Ontario.
Kennecott, in Ontario
Now CNB's innovative diamond exploration sense has paid off in
spades. CNB
said last week that both it and Paramount have signed a major
Option/Joint
Venture Letter Agreement with Kennecott Canada Exploration Inc.
to explore the
Company's Ontario properties for diamonds.
Under the terms of the Letter Agreement, Kennecott will have the
exclusive
right to acquire a 60% interest on all of the Canabrava and
Canabrava/Paramount properties by spending twenty-five million
dollars
($C25,000,000) within seven years, or by advancing the project to
a decision
to begin development and construction of a mine, whichever
occurs first.
Kennecott must also commit to a minimum exploration expenditure
totaling one
million five hundred thousand dollars ($C1,500,000) within
eighteen (18)
months of executing the Option Agreement. Once Kennecott has
earned its 60%
interest, the parties will form a joint venture and fund ongoing
explora-
tion/development programs on a pro-rata basis. Kennecott will be
the operator.
The terms outlined in the Letter Agreement are subject to the
completion of a
formal Option Agreement, plus management and regulatory
approvals.
The Kennecott deal puts a serious focus on the diamond-bearing
potential of
this part of the Canadian Shield. We wouldn't be surprised to see
an
exploration rush into the area near Wawa. Could this be Canada's
next big
diamond play?
A Cash-Generating JV in Brazil
At nearly the same time as its Kennecott news release, CNB also
announced a
new JV with Paramount to start production on a large alluvial
diamond deposit
in Brazil. The project is expected to generate sizeable on-going
cash flows to
the company.
CNB and Paramount signed a joint venture agreement to develop
the alluvial
diamond deposits on Canabrava's 100% owned Rio do Sono
Property, Brazil. The
Rio do Sono alluvial diamond property is comprised of
approximately 15,000
hectares of exploration concessions located near the town of
Paredao do Minas,
300 kilometres south of Brasilia in the State of Minas Gerais.
Under the terms of the Agreement, Paramount will spend $US1
million to earn a
50% interest in the Rio do Sono Project. Once Paramount has
earned a 50%
interest, the joint venture will fund ongoing costs on a pro-rata
basis. The
joint venture has engaged the services of Baines & Co. to be the
Project
Manager. Baines & Co. have successfully run alluvial diamond
operations in
Sierra Leone, Angola and in the Central African Republic. Upon
recovery of
alluvial diamonds from the Rio do Sono Project, net operating
profits will be
shared initially as to 45% Canabrava, 45% Paramount and 10%
Baines & Co. When
Paramount receives the equivalent of $US1 million from its 45%
share of net
operating profits, the distribution will thereafter be 50%
Canabrava, 40%
Paramount and 10% Baines & Co. Canabrava will be the operator
and have the
right to market the diamonds.
The property encompasses over 40 square kilometres of diamond
bearing terrace,
paleochannel and active river channel gravels where local miners
have been
recovering diamonds for more than 150 years. Large diamond
bearing terraces,
old river channels and numerous active river channel traps
have been inaccessible to the local miners due to a lack of any
mechanized
equipment. Terrace gravels are between 2 and 12 metres thick
while older river
channel gravels are much thicker. Four sets of rapids within the
property
concessions host hundreds of untouched trap sites and these areas
will be the
immediate focus of development.
Historical production from the property is unknown, however
published reports
together with work completed by Canabrava have indicated grades
of the terrace
and old river channel gravels varying from 0.15 to 0.30 carats per
cubic
meter. One bulk sample taken in an active river trap returned 3.0
carats per
cubic meter. Average stone size is 0.3 to 0.5 carats and the largest
recovered
stone reported to be 18 carats. Historical values of Rio do Sono
diamonds is
$US140 per carat.
Canabrava is 59.6% owned by cash-rich Southwestern Gold
Corporation (TSE:SWG),
which has about 25 major joint ventures with companies like
Newmont, Pan
American and others in Peru, Chile and China.
In our view, CNB deserves to be followed closely from this point
onwards for
the potential of breakout developments. CNB closed on Thursday,
March 25, at
$CDN 1.15/share.
NRI/WGSR
_______________________
For immediate corporate information, call Canabrava Diamond
Corporation at
604-669-2525. A US broker knowledgeable in diamond
exploration companies is
Rick Rule at 800-477-7853.
Published by NRI/WGSR, 501 W. Glenoaks Blvd., Suite 340,
Glendale, CA, 91202.
Except for free trial issues, cost for subscribers is set at $449/year
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frequency as events dictate. For subscription information, call
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or fax 818-249-7024. This issue of the Fax Alert Service has been
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covered, and text has been approved by the company. Publisher is
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reliable but its
accuracy cannot be guaranteed. Investing in junior securities is
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and carries a high degree of risk. Readers should consult their own
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viewpoints expressed
herein. NRI/WGSR has no affiliation with any broker. This is not
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may not be
used in any jurisdiction in which shares of the company have not
been
exempted/registered. Please consult your broker to determine the
legality of
your purchase or sale. Safe Harbor Disclaimer: Certain statements
contained
herein constitute forward-looking statements within the meaning of
Section 27A
of the Securities Act and Section 21E of the Exchange Act. Such
statements
include, without limitation, statements regarding business and
financing
plans, business trends and future operating revenues and expenses.
Although
the company believes that the statements are reasonable, it can
give no
assurance that such expectations will prove to be correct.
Forward-looking
statements are typically identified by the words: believe, expect,
anticipate,
intend, estimate and similar expressions, or which by their nature
refer to
future events. The company cautions investors that any
forward-looking
statements made by the company are not guarantees of future
performance, and
that the actual results may differ materially from those in the
forward-
looking statements as a result of various factors, including but not
limited
to, the company's ability to continue its substantial projected
growth, or to
fully implement its business strategies. Copyright 1999
NRI/WGSR |
