progress report: akwatia diamond project

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Paramount Mining Corporation Ltd
ABN 73 102 426 175
170 Railway Parade, West Leederville, Perth, Western Australia 6007
Business: TEL (618) 93824822 FAX (618) 93824899
Email: [email protected]
3rd October 2005 Report to the Australian Stock Exchange
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PROGRESS REPORT:
AKWATIA DIAMOND PROJECT
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Paramount Mining Corporation Limited (ASX: “PCP”) today released provisional results
from initial field work carried out on the Akwatia Diamond Project located in Ghana.
The Company is currently operating within the Phase 1 “due diligence” period of its Joint
Venture with Lakeport Group Limited (“Lakeport”). Previous announcements discussing
details of the joint venture and option period were made on 18th and 20th of July 2005.
Diamonds were noted in the field in concentrates from all but two sites of nine tested (see
table below). Gold was noted in all samples. The final concentrates have yet to be processed
and analysed in a laboratory to extract any additional diamonds and gold that may be present.
The complete set of results after laboratory analysis will be presented in a future report.
Pit Diamonds Carats
1 19 0.820
2 5 0.360
3 0 0.000
4 16 1.260
5 1 0.005
6 5 0.120
7 4 0.160
8 0 0.000
9 61 2.980
TOTAL 111 4.967
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Some of the diamonds recovered from Pit 4 (Grid measurement 2 mm)
The programme was designed to validate the presence of diamonds and gold from the work of
earlier explorers during the 1990s. Pit sites were selected from a variety of locations within
the project area.
The programme was not quantitative and was designed solely to determine the presence or
absence of diamonds, and assess the authenticity of previous work carried out at similar sites.
Several days were spent during the programme liaising with the various Chiefs and local
officials, with the customary ceremonies being carried out where required.
Using a team of local people, most of whom had assisted with previous programmes in the
concession area, and demonstrated both enthusiasm and good work ethics, excavation of
gravels from nine pits was completed, with subsequent processing on site to produce heavy
mineral concentrates. Each pit measured 1.5 x 1.5 metres, with depth varying from around 1.5
to 2.1 metres. The bedrock in all cases consisted of grey Birimian metasediments, in most
cases weathered to an impervious clay. Gravels were between 0.4 to 1 metre thick.
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For all pits a component of up to 10 cm of weathered bedrock was sampled along with the
gravels to ensure that diamonds sticking in the clay base were recovered.
On site sample processing involved initial de-sliming to remove clay by manual churning in a
series of drums, followed by screening to remove oversize material above 12 mm in diameter.
Diamonds in the Akwatia region are generally no greater than 2 carats in size, therefore
establishing the oversize cut-off at 12 mm.
The cleaned and screened undersize material was then concentrated by jigging, using a
rectangular local screen which has a mesh aperture of approximately 1 mm. Visible diamonds
were recorded and weighed in the field as summarised in the table above.
The material falling through the rectangular mesh screen was collected in a large container the
contents of which were pan concentrated on site, using a local calabash pan.
The final jig and pan concentrates have been exported to Perth for laboratory treatment to
detect missed diamonds, and to measure the gold content.
Local methods were employed during the Phase 1 field work in order to ensure that results
were comparable with those of previous explorers, who had used these methods in their field
work. Also, it enabled the Company to gain early results at the same time as assessing the
logistical aspects of the work area, and technical requirements for future programmes.
The size range and frequency of diamonds and gold particles at this stage appear to be
consistent with results achieved by previous explorers. The Company is highly encouraged
by the recovery of almost 5 carats of diamonds from field testing of a small number of
exploratory pits.
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DUE DILIGENCE REVIEW OF TENEMENT STATUS:
AKWATIA DIAMOND PROJECT
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During the Company’s option period under the Joint Venture Agreement with Lakeport to
acquire an equity interest in the Akwatia Diamond Project, a detailed review of the tenement
status is being undertaken with several issues associated with tenement ownership arising.
For part of the Akwatia Diamond Project concession, approximately 37 square kilometres
(around half of the overall project area), the Company is currently seeking clarification in
relation to the validity of termination of an option to purchase arrangement between the
previous owner of that part and a third party. The Company will advise the market as more
information comes to hand.
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Prepared by:
Maureen Muggeridge
Chairman / Chief Executive Officer
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based
on information compiled by Maureen Muggeridge, BSc, FAIG, Chairman and Chief Executive Officer of
Paramount Mining Corporation Ltd. Ms Muggeridge is a full-time employee of the company. She has
sufficient experience relevant to the style of mineralisation and type of deposits under consideration, and to the
activity undertaken, to qualify as a competent person as defined in the 2004 Edition of the “Australasian
Code for Reporting of Mineral Resources and Ore Reserves”. Maureen Muggeridge consents to the inclusion
in the report of the matters based on her information in the form and context in which it appears.