APPROVAL RECEIVED FOR COMMENCEMENT OF TRIAL MINING SEPPELT 2 DIAMOND PIPE
The company advises that it has received consent from the Department of Industry and Resources (DOIR) to commence trial mining activities at the Seppelt 2 kimberlite pipe in the Kimberley region of Western Australia. The approval, which is subject to standard conditions, follows the examination of the company’s Notice of Intent which was lodged with DOIR in January 2004.
♦ Trial mining will provide Run of Mine information that will allow the decision to commit to an openpit mining operation by mid year in order to exploit the high-grade 200cpht weathered kimberlite which underlies the infill gravels of 60cpht. Information gained from the trial will also be used to examine the viability of establishing underground mining operations.
♦ To date 3,566 carats of diamonds have been recovered from Seppelt 2 which have been independently valued at US$35.46 per carat using a 1mm cut-off. Using a preferred +1.5mm lower screen cut-off the value of the diamonds increased to US$48 per carat. The largest diamond recovered to date is 8.5 carats in size, valued at US$12,500 (US$ 1,500 per carat).
♦ A pilot HMS treatment facility and associated infrastructure (owned by the company) is being deployed to the Seppelt 2 site. This plant will treat a sample of approximately 20,000 tonnes of near surface kimberlite and infill material at a rate of up to 30tonne/hr.
♦ The trial is expected to recover in excess of 15,000cts of diamonds (estimated value A$1m at USD exchange rate of $0.75 cents), which will adequately fund the trial mining program.
♦ Seppelt 2 lies on a fissure system that runs for over 3km and appears from the test excavation work completed to date, to join the recently discovered Seppelt 5 kimberlite to the north. A sample of weathered kimberlite from Seppelt 5 has reported a very high macro/micro diamond result which is consistent with a commercial-size diamond grade in excess of 200cpht as found at Seppelt 2.
♦ Further evaluation of the Seppelt 1 resource will be undertaken in conjunction with the Seppelt 2 trial. Seppelt 1 lies 5km north-east of Seppelt 2 within the same structural corridor. Seppelt 1 has an inferred resource of 1.7 million tonnes at an average grade of 38.7cpht.
♦ Announcements with respect to trial mining diamond recoveries will be made progressively as results come to hand.
Yours faithfully Clayton Dodd Managing Director Cpht = carats per 100 tonnes
I think the key word here is profit - 'The trial is expected to recover in excess of 15,000cts of diamonds (estimated value A$1m at USD exchange rate of $0.75 cents), which will adequately fund the trial mining program.'
Cheers..
SKR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
