Namibian increases measured and indicated Luderitz Bay diamond resources

Following a review of the company’s mining results, the measured and

indicated component of its diamond resources in features 019 and 020, Luderitz

Bay mining licence, have increased threefold, from 292,000 carats to 1,155,000

carats (measured – 836,000 carats; indicated – 319,000 carats).

Since the start of operation in April of 1998, production results in feature

019 have significantly exceeded expectations based on grade estimates

originally calculated from sampling. Independent geological consultant, Marine

& Coastal Geo-Consultants, was commissioned to reassess mining resource

potential in feature 019 and adjoining feature 020.

Three factors were cited as influencing the upgraded resource estimation.

Firstly, the original resource calculation method used 10 square metre point sampling

results. For geostatistical modelling purposes, the significantly higher grades

encountered in the three larger 100 square metre bulk samples were not incorporated

in the calculation. Secondly, the technical limitations of the Namrod sampling

tool did not enable the two layers of mineralization in feature 019 to be

fully sampled. The second mineralized layer has been widely encountered in the

area mined to date. Thirdly, mining results have confirmed a consistent

pattern of strong geological control in the grade distribution in feature 019.

A summary comparison of original and revised resource estimates of the

total carats in the measured, indicated and inferred categories are as

follows (1):

Original Revised

Total Total

Carats Carats

1996 1999

Measured 261,484 836,000

Indicated 30,200 319,000

Inferred 2,362,000 1,645,000

(1) The 1999 inferred resource category includes 9,000 carats and 464,000

carats in features 011 and 018 respectively in Luderitz Bay mining licence and

406,000 carats and 82,000 carats in features 022 and 012 respectively in

Hottentot Bay grant, Namibia. These estimates have not been reassessed.

The estimates have been determined using a cutoff grade of 0.1

carats per square metre.

Based on the revised grade model, all of the original resource in the

inferred category of feature 019 has been upgraded to the equivalent of the

measured and indicated category.

Exploration and further resource delineation remain high priority targets

for the company. During the quarter, a three-week trial mining program was

conducted in its Hottentot Bay grant using the NamSSol mining system. Further

exploration is planned in 2000 to replenish and increase the company’s diamond

resources.

WARNING: The company relies on litigation protection for “forward-looking” statements.