GRN.L Regulatory News (GRN)

28 Oct 2005 08:14

Gravity Diamonds Limited28 October 2005 RELEASED ON BEHALF OF: GRAVITY DIAMONDS LIMITED (ASX & AIM : GRN) 28 October 2005 Quarterly Report for the period ended 30 September 2005 PLEASE REFER TO THE ATTACHED PDF FOR THE APPENDIX 5B "MINING EXPLORATION ENTITYQUARTERLY REPORT" Paste the following link into your web browser to download the PDF document related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/2919t_-2005-10-28.pdf • Loam sampling in Abner Range area in NT returns kimberlitic chromites • Major drilling program to test diamond targets commences in the DRC _______________________________________ • Northern Australia Diamonds, Northern Territory Processing of ABN 021 kimberlite pipe RC drilling samples continues. Loam sampling of FALCON(R) gravity targets in vicinity of ABN 021 returnskimberlitic chromites; ground geophysical surveys to delineate drill targetsunderway. Geochemical sampling of FALCON(R) targets on the Arnhem and Victoria projectscompleted. • Ellendale-Blina, Western Australia No fieldwork was undertaken in the quarter. • King George North, Western Australia No fieldwork was undertaken in the quarter. • Kasai Craton - Democratic Republic of Congo ("DRC") Major drilling program to test 30 diamond targets commenced. Regional kimberlitic indicator mineral sampling program completed. • Cash (30/9/2005) $3.8 million (3 cps). /2 GRAVITY DIAMONDS 2 Forthcoming activities The following programs are planned for the December 2005 quarter: Project Location Exploration Activity Planned TimetableNorthern Northern Sampling FALCON(R) targets on October -Australia Territory Cox-Arnold project; Ground geophysical NovemberDiamonds surveys in Abner Range District 2005Ellendale-Blina Western Evaluation of palaeochannels October - Australia December 2005King George Western Results evaluation and review October -North Australia December 2005Kasai Craton DRC, Drilling of kimberlite targets October Africa 2005 - January 2006 AUSTRALIAN PROGRAMS NORTHERN AUSTRALIA DIAMONDS JV - Northern Territory (Rio Tinto ExplorationAgreement; Gravity can earn 51%) Fieldwork during the quarter focused on district exploration on the Abner Rangetenement in the McArthur Project. The program included loam sampling of FALCON(R) targets in the ABN 021 area and ground geophysical surveys to delineatetargets for drilling. Elsewhere on the Northern Australia Diamonds program,first pass reconnaissance sampling was completed over previously identifiedFALCON(R) targets on the Arnhem and Victoria Projects. Abner Range (McArthur Project) ABN 021 Discovery No fieldwork has been undertaken at ABN 021 following the completion of thefifteen 51/2 inch RC drill hole programme (927m) reported last quarter. Thisprogram was designed to both delineate the margins of the kimberlite and obtainmaterial for diamond recovery testwork. Sample recoveries were variable withhigh water flows, extensive soft kimberlitic clays and deep weathering (to >75 metres depth) limiting sample return and prematurely terminating a number ofholes. All drill hole samples have been sent to Diatech Laboratories in Perth forprocessing through a micro-DMS plant, with all material between 0.3mm to 6.0mmin diameter observed. No crushing or reprocessing of oversize material or DMStailings has been undertaken. Processing and observation of drill hole samplesis ongoing and results will be reported once the detailed data has been receivedand evaluated. Abner Range District Exploration Work has recently commenced on district exploration within the vicinity of theABN 021 kimberlite pipe. A number of kimberlite targets identified from theinitial interpretation of the FALCON(R) gravity survey have, until recently,been inaccessible to vehicles. Sampling of these targets, located in a sandcovered valley 0.8 - 3.5 kilometres north of the ABN 021 kimberlite, wascompleted during the quarter. Indicator mineral results are now finalised as shown in the following figure. Anumber of gravity target areas have returned significant kimberlitic chromitecounts from 40-50 kilogram, -1.6mm loam samples. Significantly, the mineralchemistry of these chromites is similar to that observed in loam samples fromdirectly above the ABN 021 kimberlite and a similar dispersion pattern away fromthe source kimberlite could also be expected. The FALCON(R) gravity targets uponwhich the samples were taken are of similar amplitude and dimension to thatproduced by the ABN 021 kimberlite. /3 GRAVITY DIAMONDS 3 Gravity is highly encouraged by the results of this first targeted loam samplingin this area. Follow-up exploration work involving ground geophysical surveys todelineate targets and to optimise planned drill testing has commenced. Other Projects - Northern Australia Diamonds Field exploration on the Benda and Tee Dee FALCON(R) survey areas was completedduring the quarter. Numerous promising targets were tested in locationsassociated with historic indicator mineral and microdiamond anomalism. Fieldcrews have since been mobilised to the Cox-Arnold FALCON(R) survey area wheregeochemical sampling is currently in progress. Benda (Arnhem Project) A helicopter-supported sampling program focused on 38 FALCON targets in theBenda area within the Arnhem Project was completed during the quarter. Prior toGravity farming in to this area, Rio Tinto had conducted first-pass samplingwhich returned significant numbers of kimberlitic indicator minerals. Gravityflew a FALCON(R)? survey in late 2003, which resulted in the delineation of 41potential targets in this area of compelling geology. On field inspection, threeof these were assessed to be of low priority, not warranting testing. Thecurrent sampling program comprised of gravel/loam samples for HMS analysis and187 conventional soil geochemical samples. This program included seven drainagesamples in strategic locations outside of the FALCON(R)? survey area. Analysisof the samples will be carried out by Diatech Laboratories in Perth, withresults anticipated to be received during the December quarter. Tee Dee (Victoria Project) A small, helicopter-supported mapping and sampling program was completed on sixFALCON targets in the Tee Dee Hill area. The FALCON targets were interpretedfrom the airborne survey flown by Gravity in late 2003, which focused on an areaof strongly anomalous kimberlitic indicator minerals highlighted in previousexploration by Rio Tinto. The program comprised of six gravel/loam samples to besubmitted for HMS analysis. Other target areas were visited as part of thisprogram but field investigations indicated that sampling for HMS analysis wasnot warranted. All geochemical samples have been sent to Diatech Laboratories inPerth for analysis and results are expected to become available during theDecember quarter. Cox-Arnold (Hodgson Project) Field crews have been mobilised to this project area where the proposedgeochemical sampling program on 12 FALCON(R) targets is presently underway. ELLENDALE-BLINA JV - Western Australia (50/50 JV with Blina Diamonds NL, BlinaManaging) Following the recent announcement by Blina Diamonds about recovering commercialdiamonds from palaeochannel material immediately south of the joint venturearea, further work is planned to investigate the palaeochannel systems definedfrom the 2003 FALCON(R) airborne survey and subsequent target drilling. Thetiming and extent of the proposed further drilling will be considered jointly byGravity and Blina this field season. /4 GRAVITY DIAMONDS 4 KING GEORGE NORTH JV - Western Australia (50/50 JV with North AustralianDiamonds Limited (formerly Striker Resources NL), North Australian Diamondsmanaging) No fieldwork was conducted on the joint venture area in the Kimberley region ofWestern Australia. During the previous quarter, follow-up of five prioritytargets and five moderate targets was completed in a substantial field samplingprogram with the collection of a total of 47 loam, 10 stream, 11 rock and ninesoil samples. These targets were selected from the 25 priority targetsidentified from the integration of the FALCON(R) survey data, a diamond samplingdatabase and local geophysical surveys, which were sampled in 2004. Positiveresults received to date include three samples reporting single microdiamonds,one sample reporting a macrodiamond and five samples reporting positive forindicator minerals. Results are pending for 19 of the stream/loam samples.Microprobe analyses are pending on the samples which contained indicatorminerals. The significance of the results will be fully assessed when allanalyses are received during the forthcoming quarter. DEMOCRATIC REPUBLIC OF CONGO PROGRAM KASAI CRATON (BHP Billiton Framework Agreement and Third Party Options) Luebo Project On the Luebo project, the high resolution aeromagnetic survey covering a 7,000square kilometre area was completed in July. This area was selected because ofthe positive KIM results returned from the 2004 sampling program, as well as thepresence of extensive alluvial workings by artisanal diamond miners. The final processed aeromagnetic data was received during the quarter and hasrevealed numerous magnetic signatures that are consistent with responses fromkimberlite pipes. Importantly, the magnetic targets occur in several clustersthat would suggest the presence of individual kimberlite fields in the area. Preliminary interpretation of the very large dataset led to the selection ofapproximately 30 high priority targets for testing. The magnetic targets havebeen prioritised according to size, their location with respect to positiveindicator mineral samples sites, closeness to active artisanal diamond workingsand their accessibility. To date, 21 of these targets have been field checked toexamine the geological setting and confirm site logistics and accessibility.Drill site preparations to ensure safe access for the helicopter-borneoperations and local community liaisons have been ongoing over the past twomonths. The first phase major diamond drilling program to test up to 30 magneticanomalies for diamondiferous kimberlites has commenced. Drilling has beencalculated to a target depth of between 90 metres and 170 metres based ongeophysical data and is consistent with the interpreted depth of basement of thearea surveyed. A portable diamond drilling rig has been contracted fromGeosearch International in Johannesburg, South Africa for an approximate 3,000metre program. The first target being tested is LUMAG013, with the full programexpected to be completed early in the new year. Gravity's operations areinitially being based in the town of Demba, north of Kananga. Regional Sampling Program (Penge, Maniamuna and Gungu Projects) Excellent progress on this program has been made throughout the field season.The regional, broad-based heavy mineral sampling program, involving twohelicopter-supported sampling crews, was completed at the end of September. Thiscompletes the sampling program over Gravity's interest in over 125,000 squarekilometres of its own and third party exploration permits. The sampling pointsfor the project areas are shown below. Samples of approximately 30kg weight have been taken at an average spatialdensity of one per 50-100 square kilometres, with in excess of 1,700 samplescollected. These samples add up to a total of 50 tonnes of geological materialneeding to be processed, observed and analysed. Heavy mineral samples are beingsubmitted for processing and picking to MSA Geoservices laboratories in SouthAfrica, while geochemical samples are being sent to Genalysis laboratories inSouth Africa and Australia. Analysis of the first batch of samples from theManiamuna Project commenced in July 2005 and early results are expected towardsthe end of this year. /5 GRAVITY DIAMONDS 5 Consignments of the final batch of heavy mineral and geochemical samples will beshipped from the field by end October. It is anticipated that the analyticalresults will be received on a continuous basis over the next six months. Becauseof the complex and time consuming process of analysing the samples forkimberlitic indicator minerals and the large number involved, analyses willcontinue well into the first half of 2006. As previously reported, the detailedevaluation of the results will allow a significant ground reduction of the totalholdings with only the most prospective areas being retained. Exploration on the Kasai Program is being carried out on ground held by BHPBilliton under the Framework Agreement between the parties and a variety ofoption agreements with other companies. The information in this report that relates to Exploration Results is based oninformation compiled by Gravity Diamonds Limited's Managing Director, PhillipHarman BSc (Hons), who is a member of The Australasian Institute of Mining andMetallurgy. Mr Harman has sufficient experience which is relevant to the styleof mineralisation and type of deposit under consideration, and to the activityundertaken. He is qualified as a Competent Person as defined in the 2004 Editionof the "Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves". Mr Harman has consented to the inclusion of thisinformation in the form and context in which it appears in this report. Further Information: Phil Harman, Managing Director, Gravity Diamonds Ltd. Tel: 00-61-3-9909-7655Elisa Bartlett, Assistant to the Managing Director, Gravity Diamonds Ltd. Tel:00-61-3-9909-7655Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: 020-7628-5518 This information is provided by RNS The company news service from the London Stock Exchange