Afri-Can Marine Minerals Corp. and Diamond Fields International Ltd. have arranged an option agreement that enables Afri-Can to acquire a 90-per-cent interest in diamond mining leases No. 111, No. 138, No. 139 and No. 32 off the coast of Namibia in the region of Luderitz. Mining lease (ML) No. 111 hosts a historical resource of 950,000 carats of gem-quality diamonds.
The option agreement is valid for two years, and in order to complete the acquisition, Afri-Can is required to spend $800,000 of exploration expenditures on the MLs before the first-year anniversary and an additional $2.5-million of exploration expenditures before the second-year anniversary of the option agreement. Afri-Can entered in the option with its Namibian partner Woduna Mining Holding (Pty.) Ltd. Upon exercise of the option on MLs No. 111, No. 138 and No. 139, the interests in the MLs will be: Afri-Can at 80 per cent, DFI at 10 per cent and Woduna at 10 per cent. Upon exercise of the option on ML No. 32, the interests in the ML will be Afri-Can at 90 per cent, Woduna at 10 per cent, DFI at 7 per cent and Full Screen Investments (Pty.) Ltd. at 3 per cent.
Afri-Can’s technical team is currently reviewing the extensive database and planning work programs. The main goal is to resume production as soon as possible. Some areas will need further exploration, such as geophysical surveying and sampling, in order to define properly the resource and to establish a definitive mining plan. Afri-Can intends to identify the areas that could resume mining as soon as possible.
About the MLs
ML No. 111 lies between five kilometres to 20 kilometres north of Luderitz. It covers 312 square kilometres and sits in water ranging from 30 metres to 70 metres in depth. ML No. 111 hosts four different depositional areas. The ML was originally granted for a period of 15 years and is renewable on Dec. 4, 2015. A resource estimate and a feasibility study were prepared by MRDI and AGRA-Simons in 2000. The historic resource, which is not compliant with National Instrument 43-101, amounted to 1.1 million carats with an average grade of 0.3 carat per square metre. The resource existed in the Marshall Fork, Staple basin/Conical Beach and Diaz Reef areas. DFI produced intermittently between 2001 and 2007 about 158,200 carats, mainly from the Marshall Fork area, implying remaining historical resources of approximately 950,000 carats. Special stones recovered from Marshall Fork included a gem-quality 17.42-carat stone, a rare 5.26-carat light blue diamond, which sold for $10,457 (U.S.) per carat, and a 2.45-carat pink gem diamond, which sold for $16,771 (U.S.) per carat.
Afri-Can is not treating the historical resource as a current mineral resource and will undertake to prepare an NI 43-101-compliant resource estimate as part of its exploration program. In order to comply with NI 43-101 and to upgrade the historical resource to an inferred or indicated level, Afri-Can will carry out a geophysical survey covering a minimum of 1,000 line kilometres and a sampling program of a minimum of 400 samples of five square metres over targeted areas.
In 2006, SRK Consulting estimated an NI 43-101-compliant indicated resource on a small area of ML No. 111, called Diaz prospect No. 1, of 63,000 carats over 315,000 square metres with an average grade of 0.2 carat per square metre. Production to the end of September, 2007, amounted to 16,245 carats with an average size of 0.43 carat per stone. DFI ceased production following the world financial crisis.
ML No. 32 extends 65 kilometres north of Luderitz, covers 176 square kilometres and extends from the high-water mark to 30 metres of water depth. Between 1987 and 1997, a total of 37,335 carats was produced by various contract divers working from the shore with small vessels. No significant production has been undertaken in this property since that time. The ML is renewable on Feb. 18, 2019.
ML No. 138 and ML No. 139 (originally EPL 1607 A and B) are adjacent to the west of ML No. 32 and ML No. 111, and cover 92 square kilometres and 130 square kilometres, respectively, in water ranging from 30 metres to 120 metres in depth. Previous sampling data from ML No. 138 and ML No. 139 will be reviewed in order to plan further work and potential resource estimation. ML No. 138 is renewable on Nov. 4, 2019. ML No. 139 is renewable on Nov. 4, 2029.
Pierre Leveille, president and chief executive officer of Afri-Can, stated: “We are very pleased with this agreement. The DFI portfolio of mining leases complements EPL 3403 and offers very good development potential. It will enable us to get a resource base and then start production. We feel that we are sitting on a strong project in a very solid industry.”
Ian Ransome, president and CEO of Diamond Fields, stated: “The Afri-Can agreement is a positive step forward in the restructuring of the company. It further develops the Namibian concessions and allows DFI to focus on developing its other marine portfolio. The structure of the agreement has only an upside for the company with the potential to generate a revenue stream.”
Leonard Gardner, BSc (honours, geology), PrSciNat, is the qualified person who has reviewed this press release and is responsible for the technical part of this press release, and is the designated qualified person under the terms of NI 43-101.
