Aug 28, 2008
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| | | | | Kono "Lion" Kimberlite Dykes - Prodution JV
Mano has concluded a Heads of Agreement to enter a Joint Venture for the production of diamonds from the underground mining of diamond-bearing kimberlite dykes (the "Lion" dykes) defined within Mano's three contiguous licence areas that cover 260km2 across the world-famous Kono diamond district ("Kono Licences") of Sierra Leone (http://www.manoriver.com/i/pdf/news/nr0417_01dec.pdf) Though an investment of US$3m over 3 years Crown will earn a 51% interest in Mano's 100% owned subsidiary, The Kono Diamond Corporation Ltd, which will hold the three Kono licences. Thereafter Mano has the option to co-fund to maintain its interest at the 49% level. The agreement between Mano and Crown envisages Crown as Operator moving directly into underground mine construction and production in 2005, based on:
About the Kono diamond districtThe Kono diamond district has been extensively worked primarily by alluvial miners since diamonds were first discovered in the 1930s and is reported to have produced 65-70% of Sierra Leone's historical diamond carat output. By 1969, historical production from alluvial sources in the Kono area was estimated at 9 million carats (Hall P.K., 1969; The Diamond Fields of Sierra Leone). The district is the source of the world's third largest gem diamond found to date; namely the 969 carat 'Star of Sierra Leone'. In 2002, Reuters reported news issued by the Government Gold and Diamond Office and Ministry of Mines that a 110 carat stone had been discovered and officially exported. It sold for US$958,000 (±US$10,000 per carat) and was said to have been discovered within Mano's Kono licences. About Crown DiamondsCrown Diamonds (www.crowndiamond.com.au) is a specialist underground diamond mining company that anticipates production of 170,000cts in 2005 and 240,000cts by 2008, from its existing high grade underground kimberlite dyke mining operations in the Republic of South Africa. Summary of Results from Mano's Kono licences to dateExploration commenced throughout the 3 Mano EPL's in February 2002. A total of 117 stream sediment samples were collected and processed for kimberlite indicator minerals. Abundant kimberlitic ilmenite, garnet and chromite were yielded from many samples and in some cases chrome diopside and diamond was also recovered from a few samples. During the sampling kimberlite dykes were located and mapped and these do conform to some of the indicator anomalies. However, numerous anomalies were identified in areas of no known kimberlite and these obviously represent undiscovered kimberlite occurrences. Exploration results from Mano's Kono licences have previously been reported by Mano and are summarised as follows and in Table 1:
In some cases mini bulk samples were unavoidably mixed with surrounding country rock material, resulting in a reduction in the reported grade. Each sample was washed and jigged on site to recover diamonds in the +0.71 to --2.0mm and +2.0mm size fractions. All of the diamonds recovered from these samples were weighed and described by the Cape Town laboratory of Mineral Services Ltd. Exploration programmeSelections of grains, particularly garnet, ilmenite and chromite, were submitted for microprobe analysis and excellent results generated. A very strong population of G10 garnets shows that the sources of these indicators are likely to be diamondiferous.
As part of the detailed follow up programme detailed loam sampling was conducted over some high priority stream anomalies. During this exercise more kimberlite dykes were discovered and they were all designated Lion-1 to 10. The most extensively mapped kimberlites are the Lion-1 and 2 kimberlites with discontinuous strike lengths of over 5km each being confirmed. A mini-bulk sample of 1.7t of diluted Lion-1 kimberlite yielded 22 diamonds in the +1.0mm size fraction, weighing 1.1-carats for a preliminary macrodiamond grade of 65cpht. This is considered to be very encouraging due to the diluted nature of the sample and it is therefore possible to assume that the actual grade of the kimberlite is likely to be higher.
Small grab samples of the Lion-1, 2 and 4 kimberlites returned 3, 17 and 1 macrodiamond respectively. These results are most encouraging since the samples comprised only 30kg of decomposed kimberlite material each. Mineral chemistry analysis of the Lion-1 to 4 kimberlites confirms the high-interest nature of each kimberlite (see garnet plot). The Lion-5 to 10 kimberlites remain to be tested. Accepting that the diamond value from primary sources is likely to be lower than that of alluvials, even with a grade of 65cpht and a value of only $150/ct this would equate to an in-situ ore value of $97/ton. Kimberlite dyke mines in South Africa generally operate on a mining cost of approximately $25 to $30/t so it is clear to see that even with probable higher operating costs in Sierra Leone the project will have robust economics based on the likely diamond values and kimberlite grades. The immediate and mid-term future plans will see the underground sampling and mining of the dykes with an aggressive follow up programme to identify further kimberlite dykes and also attempt to locate a potential pipe or blow that is indicated by petrographic results on some isolated diatreme facies kimberlite float that was discovered some 2km to the southwest of the Koidu 1 pipe. This follow up programme may involve an airborne geophysical survey, loam sampling and mini-bulk sampling of the best kimberlite dykes. Further mapping and sampling of the dykes will also be undertaken to determine the attitude of the dykes along strike and depth and to generate a preliminary resource model. 1.0 Yengema EPL (103 km²)The Yengema EPL lies on strike of the 240° to 250° trending kimberlite dyke swarm, eight kilometres to the west-south-west of Koidu. The diamonds are associated with the dyke swarm as well as a number of related kimberlitic breccia pipes and blows. Although the majority of drainage channels have been mined for alluvial diamonds in this area, no detailed investigation has been conducted of the underlying bedrock. Established theory suggests that the alluvial diamonds lie in the immediate vicinity of eroded primary pipes and dykes. Detailed Landsat interpretation by Mano demonstrates that the intense structural features which contain the kimberlites at Koidu continue through Yengema and into the Nimini Hills across Golden Leo licences. 2.0 Njaiama EPL (103 km²)The Njaiama Nimikoro EPL lies along the eastern flank of the Nimini Hills, within a zone of amphibolites and minor ultramafic units. The extensive alluvial diamond deposits in central Kono are considered likely to be not only derived from immediately underlying dykes and pipes, but also from source rocks on higher ground to the south of Kono, from which the main rivers in Kono have their source. The Njaiama EPL targets this region. The Koidu diamond field lays 15 kilometres east-north-east of the northern part of the EPL. South of the Yengema area, the diamond field at Njaiama one kilometre east of the licence has been yielding diamonds which are morphologically distinct from the Yengema stones and which appear to be derived from drainage systems paralleling the known kimberlite trend.
This area has long been known for producing clear and coloured stones which are different from the generally larger coated diamonds in the main kimberlite zone in Koidu. The main focus of Mano is to find extensions of known kimberlites, which could be sourcing these rarer stones.
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