Afri-Can has received the conclusions of the final report pertaining to the sampling program conducted in October, 2002, on block J offshore Namibia. The focus of the report prepared by R.W. Foster and K. Lord was to determine the geology and potential size of the most prospective areas and the potential economics of the concession. Although problems associated with the sampling vessel and equipment resulted in a shortened sampling program, the authors of the report have been able to draw the following conclusions from the work done:
the diamondiferous nature of feature No. 8, indicated by the phase 1 sampling, has been confirmed, and the extent of the mineralization has been well defined within the area sampled;
the grade in the defined mineralized area is estimated to be 7.2 carats per 100 cubic metres of screened gravel (1.6-millimetre screen). This implies that, at this stage, the project is within the realm of potential viability. Further sampling work is therefore justified;
analysis of phase 1 and 2 samples confirms that the largest stones were found in the deeper samples and this result suggests the presence of two separate populations of diamonds. The more likely reason for this is the presence of two separate diamondiferous zones, the lower of which contains larger stones but lies beneath the indurated horizons that was infrequently sampled by the airlift due to the difficulties encountered by the contractor;
new geological evidence gained during the voyage has led to improved understanding of the origin of the diamonds in block J and the reasons for their distribution. It appears that there are three types of diamondiferous deposits — marine gravel lags, paleo-surf zone gravel waves and aeolian-fluvial valleys; and
the potential of block J to contain a significant quantity of diamonds has been enhanced by the 2002 sampling program.
New feature
During the phase 2 sampling, some fragments of conglomerate were recovered that contained mollusc fossils that were more similar to lower Tertiary (from 65 million years to three million years ago) forms than to those of the late Pleistocene (from three million years to 8,000 years ago). The geological model for the area has therefore been reconsidered, and it is now proposed that the formerly Pleistocene beach material was in fact an outcrop of basal Tertiary sandstones and conglomerates, the erosion of which has formed deposition of gravel lags. Detailed study of the side scan sonar information shows that the material outcrops as a series of small scarps and occurs discontinuously along the whole length of the lease area (45 kilometres). Thirteen of the phase 1 sample spreads intersected the delineated zones, yielding a total of 12 diamonds. The area of the lag gravel zones is about 17.5 square kilometres.
Thus it is now believed that feature No. 8 area may contain two mineralized zones: 1) the valley lag gravels adjacent to the basal conglomerate outcrop; and 2) the gravel trapped between the boulders of the gravel waves further to seaward (the geological model proposed at the end of the phase 1 sampling program).
Toward the south of block J (in feature No. 17) two broad valleys occur. Each has a train of gravel waves extending eastward up the valley from the basal Tertiary outcrop which are mineralized and are targeted for further sampling.
Regional potential
Tabulated below are the areas (in square kilometres) of indicated mineralization and potentially mineralized zones within block J and the relationship between the findings of the 2001 and 2002 programs:
Geotype Indicated Potentially
mineral- mineralized Total
ized zone zone (km2) (km2)
(km2)
Fluvial-
aeolian 3.7 0.5 4.2
Gravel
lag 2.7 14.8 17.5
Gravel
waves 1.4 19.0 20.4
2002
total 7.8 34.3 42.1
2001
total 10.0 25.0 35.0
The differences from the 2001 findings resulted from the review and refinement of the geological model. This will be a continuing process as more information is gathered and further analysis is done on existing data.
Comparison between 2001 and 2002 shows a reduction in the area of indicated mineralization because the phase 2 sampling gives a better definition in feature No. 8. However, the overall potential has increased because recognition of the gravel lag deposits has opened up the potential of the northern paleo-coastline. In addition, recognition of the gravel lag deposits has in turn explained the occurrences of diamonds in isolated depressions and drainage channels cut into the basement surface. This means that the diamond-bearing potential of such features can be more realistically assessed, and their priority for inclusion in future sampling programs has increased.
Economic potential
Within the mineralized area, phase 1 and phase 2 sampling (except the bulk sample) together extracted a total of 136.83 cubic metres of plantfeed, from which 70 diamonds weighing 9.89 carats were recovered. This amounts to an exploration grade of 0.072 carat per cubic metre or 7.2 carats per 100 cubic metres of plantfeed. Taking into consideration the uncertainties of grades estimated from exploration activities versus production performance from the same area, production costs in similar marine environments and assuming a diamond value of $100 (U.S.)/carat (below the Namibian average), the authors of the technical report have concluded that the grades indicated in sampling undertaken to date suggest that operations based thereon have the potential to be profitable.
Recommendations
It is recommended that further phase 2 sampling should be undertaken in 2003 with the objective of quantifying the potential of block J as a whole.
Block J is the subject of a joint venture between Afri-Can and Woduna Mining Holding Pty. Ltd. Currently, Afri-Can holds an undivided interest 70 per cent of the concession. Block J covers an area of 994 square kilometres measuring approximately 45 kilometres long by 21 kilometres wide in water depths ranging from 70 metres to 167 metres. The concession lies on the northern boundary of the known rich diamondiferous deposits currently being mined along the south and central Namibian west coast.
WARNING: The company relies upon litigation protection for “forward-looking” statements.
