Paragon Diamonds operational update

RNS Number : 4410L

Obtala Resources Limited

04 September 2012

 



4 September 2012

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Paragon Diamonds operational update, Motete Dyke, Lesotho

The Board of Obtala Resources Limited, the natural resources investment and development company, announces the following RNS made by Paragon Diamonds Limited this morning:

Obtala Resources Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
Macquarie Capital (Europe) Limited (Nomad and Broker)
Steve Baldwin	[phone]
Nicholas Harland

4 September 2012

Paragon Diamonds Limited

("Paragon" or the "Company")

(AIM: PRG)

Operational update, Motete Dyke project, Lesotho

Paragon Diamonds Limited, the African focused diamond explorer and developer, is pleased to announce an operational update from its Motete Dyke operation in Lesotho.

Highlights

·      3rd bulk sample treated - 214 tonnes processed and 130 carats recovered

·      Overall recovered grade of 55 cpht for the Motete Dyke

·      Drilling programme complete - 1,109 metres drilled, kimberlite intersected 13 times

·      Diamonds scheduled for independent valuation

Paragon Diamonds Ltd. announces that is has completed its Motete Dyke bulk sampling and drilling programme. These results will be consolidated and published in an upcoming resource statement and scoping study expected shortly.

Bulk Sampling

Material from trench T2 in the central portion of the dyke has been processed and grades that are consistent with all previous results recorded. Combined with previous results (Trenches T1 & T3) the overall recovered grade calculates at 55 carats per hundred tonnes (cpht).

This recovered grade from the bulk sample plant is as expected when compared to the micro-diamond model, as the current bulk sampling plant is not correctly configured to recover 100% of the present diamonds. A significant number of (especially the smaller) diamonds could not be recovered. Tailings samples are being submitted to DebTec (DeBeers) in Johannesburg for enhanced recovery using "ModRUP" dual wave X-ray recovery, to determine the presence of these additional stones and help optimize future production planning to ensure that the maximum economically viable grade is recovered.

The diamonds recovered so far have now been characterized by a specialist from consultants the MSA Group, and are being prepared for export and independent valuations in the near future.

Sample MTD-T2 consisted of 214.2 dry tonnes of kimberlite and yielded 130.28 carats of diamonds and 1,933 individual stones for a grade of 50 carats per hundred tonnes (cpht). Overall, 595 dry tonnes of pure kimberlite were treated for the recovery of 329.49 carats. Results are per the table below:

	MTD-T1		MTD-T2		MTD-T3		Total
	Cts	Stns	Cts	Stns	Cts	Stns	Cts	Stns
DTC+15	1.72	3	2.55	2	1.28	1	5.55	6
DTC+13	2.50	4	2.27	3	1.49	2	6.26	9
DTC+11	10.65	32	13.43	39	11.26	33	35.34	104
DTC+9	15.28	84	19.20	100	14.04	77	48.52	261
DTC+7	11.98	105	18.16	148	14.00	119	44.14	372
DTC+5	37.46	590	45.54	690	39.84	628	122.84	1,908
DTC+3	15.16	455	22.66	645	14.61	428	52.43	1,528
DTC+2	3.80	164	4.76	207	2.30	98	10.86	469
DTC+1	1.24	48	1.71	99	0.60	32	3.55	179
Total	99.79	1,485	130.28	1,933	99.42	1,418	329.49	4,836

Drilling

The delineation drilling programme at Motete has been completed, and 1,109 metres were drilled in 10 holes. Kimberlite was intersected on 13 occasions, as dual (parallel) dykes were present in three drill holes. A total of 35 metres of kimberlite core was recovered, and the actual horizontal width of the dyke varied between 2.13-1.30 metres with an average width at depth of 1.49 metres. The deepest hole intersected kimberlite at 170 meters below the Motete Valley floor at 2,280 metres above sea level, where the horizontal width was 1.53 metres. Thus the presence of the dyke has been demonstrated over 470 metres of vertical height and it remains open at depth. Survey data from the drilling is being integrated with detailed surface mapping to generate a wire-frame model of the dyke and hence an accurate resource tonnage.

The evidence from drilling indicates that the dyke does not taper significantly with depth, maintaining a width well in excess of one metre. As such, the original in-house estimate of 1+ million tonnes to a depth of 100 m below valley floor, and a deposit highly amenable to low-dilution underground mining, appears to be validated.

Paragon MD Stephen Grimmer commented: "Following the conclusion of evaluation activities at Motete, we now eagerly await the delivery of the maiden resource statement by the MSA Group and the scoping study in by Paradigm Project Management both of which are currently being prepared. Also, following the recent agreement to project finance the Motete dyke with our local partners in Lesotho we are now well positioned to begin planning and development of a mine at Motete, once the outstanding tasks have been successfully completed."

In accordance with the AIM Rules, the information in this announcement has been reviewed by Stephen Grimmer PhD., MSc., a qualified geologist with 25 years' diamond exploration experience.

For further information:

Paragon Diamonds Limited Francesco Scolaro - Chairman Simon Retter - Finance Director www.paragondiamonds.com	[phone]
Fox-Davies Capital Ltd (Nomad and Broker) Jonathan Evans Simon Leathers	[phone]

 

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