Exploration Update - Kimberlite KX36, Botswana

RNS Number : 2920Z

Petra Diamonds Limited

14 March 2012

 



14 March 2012                                                                                                           LSE: PDL

 

Petra Diamonds Limited

("Petra", "the Company" or "the Group")

Exploration Update - Kimberlite KX36, Botswana

Highly Encouraging Drilling and Microdiamond Results

Petra Diamonds Limited announces an update in respect of the exploration work programme at kimberlite KX36 ("KX36"), which is situated in Petra's Kukama East project area in central Botswana.

A drilling and microdiamond sampling campaign was carried out at KX36 in 2011 and microdiamond results from samples taken from delineation/evaluation drill core have now been received and analysed. A total of 1,373m was drilled in five holes; the deepest borehole was drilled to a vertical depth of 516m below surface, with the borehole ending in kimberlite at that depth.  A total of 250 diamonds, collectively weighing 0.756 carats, was recovered from 403.88kg of kimberlite; the largest diamond recovered was a white, transparent dodecahedron, weighing 0.393 carats.

Highlights

·     Initial modelled (undiluted) diamond grade between 75 carats per hundred tonne ("cpht") and 180 cpht, based on 90% confidence limits around the estimated average grade of 130 cpht, at a +1 Diamond Trading Company ("'DTC") sieve size

·     Independent diamond content modelling of the results indicates a reasonably coarse diamond size distribution, implying that the average diamond value for KX36 may be positively affected by the presence of a large proportion of coarse stones

·     Incorporation and integration of all drilling results into the existing 3D geological model indicates a potential kimberlite tonnage of between 28 million tonnes ("Mt") and 34 Mt to a vertical depth of 516m below surface. The deposit remains open ended at depth

·     Delineation drilling and geophysics indicate a surface area of approximately five hectares under circa 78m of Kalahari overburden

·     Large diameter (24 inch) drilling campaign will commence during April 2012 to obtain a bulk sample

Johan Dippenaar, CEO of Petra, commented:

"These initial drilling and microdiamond analysis results indicate that kimberlite KX36 has significant potential, in terms of its possible size, diamond grade and potential coarse diamond size frequency distribution. The next step is a large diameter bulk sampling drilling programme, commencing in April 2012, in order to obtain further information with regards to grade and an indication of diamond value."

Jim Davidson, Technical Director of Petra, commented:

"Our exploration programme in Botswana has led to the discovery of five new kimberlites so far and the strong micro diamond results and the favourable coarser diamond size indications for kimberlite KX36 are most encouraging. We have now launched the next phase of our evaluation of this exciting discovery, with the bulk sampling work programme scheduled to commence shortly. KX36 is approximately 60km from the nearest known kimberlite, meaning there is the potential for KX36 to be part of a new kimberlite field."

Conference Call

The Company will today host a conference call at 9:30am GMT to discuss the Exploration Update with investors and analysts. Participants may join the call by dialling one of the following three numbers shortly before the call:

From UK (toll free): 0800 368 1895                           

From South Africa (toll free): 0800 983 097

From rest of the world: [phone]

Participant passcode: 395788#

Background

Petra's exploration activity is focused on Botswana, which is considered to be one of the best addresses in the world for diamond exploration, given its stable fiscal regime and its superb geological prospectivity. Sekaka Diamonds (Pty) Limited ("Sekaka") is Petra's wholly owned operating subsidiary in Botswana. Sekaka holds diamond prospecting licences in Botswana covering approximately 22,250km², all of which are "on craton" (areas underlain by ancient, thickened continental crust, known to host economic primary diamond deposits) and Petra/Sekaka operate a highly focused and cost effective exploration programme in country.

The kimberlite KX36 is situated in the Kukama East project area, in the south east extremity of the Central Kalahari Game Reserve. Delineation drilling and geophysics indicate a surface area of approximately five hectares under circa 78m of Kalahari overburden. KX36 is approximately 60km from the nearest known kimberlite, and therefore does not from part of any other known kimberlite cluster, meaning there is the potential for KX36 to be part of a new kimberlite field.

Results

A total of 1,373m of HQ and NQ sized core was drilled in five holes. The deepest borehole was drilled to 516m vertical below surface, with the borehole ending in kimberlite at that depth. Geological logging suggests very little internal variation within the kimberlite, and an average of 10% internal waste has been estimated from logging of the boreholes drilled to date.  After detailed geological logging and petrographic analysis, a representative sample of 403.88kg of kimberlite was selected (refer detail in table below) for microdiamond analysis, subdivided into 20kg aliquots for processing. Areas of internal waste within the kimberlite were avoided as much as possible while sampling the drill core. The total sample weight represents approx. 5.8% of the total kimberlite core recovered during this drilling campaign. All samples were sent for processing to the SGS caustic fusion facility in Johannesburg, South Africa, with final diamond recovery down to 0.075mm in size carried out by the MSA Group Analytical Services ("MSA").

A total of 250 natural diamonds larger than 0.075mm square mesh sieve size were recovered from the sample aliquots, collectively weighing 0.7563734 carats. Nine commercial sized diamonds were recovered (>0.85mm square mesh sieve size), and the largest stone is a white transparent dodecahedral crystal with dimensions of 4.28mm x 3.86mm x 2.57mm, weighing 0.3927715 carats.

Results are summarised in the following table:

Number of diamonds according to bottom sieve size fraction (square mesh in microns)
Hole	Sample ID	Weight (Kg)	+75	+106	+150	+212	+300	+425	+600	+850	+1180	+2360	No. of diamonds
H4	80-125	19.98	0	0	4	2	2	1	0	0	0	0	9
H4	125-170	20.46	0	0	4	4	3	1	0	0	0	0	12
H4	170-215	20.14	0	1	2	0	0	2	0	0	0	0	5
H4	215-232	20.08	0	2	2	3	2	0	2	0	0	0	11
H5	83-128	20.66	0	0	1	0	6	2	0	0	0	0	9
H5	128-173	20.12	0	4	7	3	1	0	0	1	0	0	16
H5	173-218	20.34	0	2	4	6	2	3	0	0	0	1	18
H6	81-126	20.16	0	2	4	3	1	1	2	0	0	0	13
H6	126-171	20.02	0	0	2	1	0	0	0	0	0	0	3
H6	171-216	20.62	1	1	4	0	1	0	0	1	0	0	8
H6	216-242	20.02	0	7	4	1	2	3	0	0	0	0	17
H7	77-122	20.24	0	0	4	2	1	0	0	0	1	0	8
H7	122-167	20.08	0	8	6	8	3	0	1	0	1	1	28
H7	167-212	20.2	0	0	7	5	2	1	3	0	0	0	18
H7	212-257	20.1	0	1	5	1	5	0	0	0	0	0	12
H7	257-302	20	0	3	6	3	2	1	3	0	0	0	18
H7	302-347	19.98	0	0	2	1	0	1	1	0	1	0	6
H7	347-392	19.96	0	0	3	1	1	2	0	0	0	1	8
H7	392-437	20.12	1	3	4	3	2	2	2	0	1	0	18
H7	437-482	20.6	0	6	3	1	2	0	1	0	0	0	13
	TOTAL	403.88	2	40	78	48	38	20	15	2	4	3	250

Interpretation

Microdiamond results were modelled by Mr Johannes Ferreira, an independent consultant (associated with MSA) with more than 30 years' experience in diamond content modelling of primary diamond deposits worldwide. His conclusions are:

·     Microdiamond sampling thus far implies an undiluted grade of between 75 cpht and 180 cpht, based on 90% confidence limits around the estimated average of 130 cpht, at a +1 DTC diamond sieve size.

·     Initial results could be regarded as highly positive, with indications of a reasonably coarse diamond size distribution, implying that average diamond value for this deposit will be positively affected by the presence of a large proportion of coarse stones in a normal production parcel.

Drilling results have been incorporated by Petra into a 3D geological model of KX36, giving a preliminary kimberlite tonnage estimate by Petra of between 28 Mt and 34 Mt to a vertical depth of 516m below surface. The tonnage range has been estimated on geological modelling and the quoted tolerance on the borehole surveys of the core drilling campaign. The deposit remains open ended at depth.

Outlook

A large diameter (24 inch) drillingcampaign will commence during April 2012 to obtain an initial bulk sample from KX36 and to ascertain further information with regards to grade and an indication of diamond value.

Notes

1.   The caustic fusion laboratory/microdiamond recovery laboratory in southern Johannesburg, South Africa is an independent commercial laboratory that is jointly managed by SGS South Africa (Pty) Ltd and the MSA Group, and this specialised facility is ISO 9001:2008 certified.

2.   The modelled undiluted diamond grades do not take into account the internal waste % estimated during core logging.

3.   The modelled diamond size distributions and undiluted diamond grades reported assume 100% recovery of diamonds above a #1 DTC sieve, and 0% recovery below a #1 DTC sieve (approximately 0.85mm square mesh). Therefore grade estimation does not take into account potential losses during production processing due to screening and diamond lock-up, or additional incidental diamonds recovered below the #1 DTC sieve size.

4.   HQ diamond drill core has a core diameter of 63.5mm; NQ diamond drill core has a core diameter of 47.6mm.

5.   The Company previously announced that a total of 1,730m of drilling was undertaken on KX36; the 1,373m noted in this announcement refers to delineation drilling only, the total of 1,730m includes the three original kimberlite discovery holes.

6.   The information in this update that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Jim Davidson, Pr. Sci. Nat. (reg. No. 400031/06), who is a Member of the Geological Society of South Africa, a 'Recognised Overseas Professional Organisation' ('ROPO'). Jim Davidson is a full-time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify. Jim Davidson has given his written consent to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

7.   It should be noted that the tonnage, size and modelled diamond grades quoted in this report are conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

For further information, please contact:

Petra Diamonds, London	Telephone: [phone]
Cathy Malins	[e-mail]

Buchanan (PR Adviser)	Telephone: [phone]
Bobby Morse Cornelia Browne	[e-mail] [e-mail]

RBC Capital Markets (Joint Broker)	Telephone: [phone]
Martin Eales	[e-mail]
Pierre Schreuder	[e-mail]

Canaccord Genuity Limited (Joint Broker)	Telephone: [phone]
Rob Collins	[e-mail]

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. The Company has a well-diversified portfolio, with interests in eight producing mines: seven in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star) and one in Tanzania (Williamson). It also maintains a highly focused exploration programme in Botswana.

Petra offers an exceptional growth profile, with a core objective to steadily increase annual production to over 5 million carats by FY 2019. The Group has a major resource base in excess of 300 million carats.

Petra conducts all its operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL'.

For more information, visit the Company's website at www.petradiamonds.com 

 

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