6 May 2011 07:00
Paragon Diamonds Limited
("Paragon" or the "Company")
(AIM: PRG)
Paragon Diamonds, the AIM quoted, African focused diamond production and development company, today announces an operational update relating to its operations in Lesotho and Zambia.
Highlights
·; Lemphane (Lesotho)
o Work underway for commencement of initial +5,000t bulk sampling at Lemphane followed by further +5,000t and +10-15,000t respectively to determine likely grade/valuation and distribution
o 15tph Mobile DMS plant acquired by Paragon in November 2010 being shipped to Lesotho to commence bulk sampling processing and subsequent trial mining
·; Kaplamp (Zambia)
o Remote sensing to be undertaken immediately with ground magnetic surveys to follow
o Mini-bulk sampling to commence in Q3 to determine grade/valuation
o Pre-wash and pan plant already acquired by Paragon awaiting shipment to Zambia
Following the recent announcement, on 21 April 2011, of the conditional acquisition of a further 54.2% of International Diamond Consultants ("IDC") the Directors of Paragon, in consultation with the existing IDC employees and consultants, have undertaken a review of the operational strategy at both the Lamphane and Kaplamp diamond projects, the results of which are set out below.
Lemphane (Lesotho)
A detailed work programme and costing, plus operational procedures for bulk sampling is being prepared. This will be completed by the end of May 2011. Permits will be applied for from the government of Lesotho prior to commencement of the sampling and processing but these are expected to be in place before the end of June 2011.
Once the permits are obtained, work will commence immediately on a bulk sample programme of +5,000t within the Kimberlite in order to gain a better understanding as to the likely grade and value of diamonds contained within the pipe. Following this initial extraction there will be a continuous follow up sampling programme of a further +5,000t and then a subsequent +10-15,000t of ongoing material.
Stripping of overburden, mapping of trenches, and preparing the sample for extraction will commence as soon as permits have been obtained. A mobile crusher will be used to crush and stockpile the sample awaiting processing by the plant which is expected to arrive on site by the beginning of Q3 2011.
Bulk Sampling Plant
Work has already commenced on shipping the recently acquired 40 tph pre-treatment and 15 tph modular DMS diamond recovery plant (as announced on 29 November 2010) to Lesotho where it will be re-assembled and used to process stockpiles of crushed ore.
In addition to the sampling activities, work will also be undertaken over the coming months on the construction of slimes and water dams and pump accumulation of process water and other necessary infrastructure works as required.
The initial results from the bulk sampling programme are expected in Q3 2011 at which stage indicative metallurgical parameters as well as grade, valuation and distributions within the pipe can be estimated. At this stage a further review of the strategy will be undertaken and if appropriate, trial mining will be commenced.
Zambia - Kaplamp Project
The Kaplamp project consists of a province of at least 12 lamproite intrusions and dykes, up to 45 hectares in size, of which at least seven are reported to be diamondiferous. The province has been compared to the Ellendale lamproite province in Western Australia, in terms of its size, geological setting and number and distribution of lamproite bodies. The Ellendale province hosts a number of economic diamond occurrences, two of which are presently being mined.
Applications have been started to gain permission to commence exploration in the KapLamp licence with remote sensing and interpretation of satellite imagery to commence shortly. In early Q3 2011, it is expected that a ground magnetic survey will be undertaken followed by drainage sampling of the five principle targets. The samples will then be sent to South Africa for processing.
Following the initial samples, mini-bulk sampling will be undertaken on the identified targets using a pre-wash pan plant that has already been acquired by Paragon and is currently in storage in South Africa awaiting shipment to Zambia. The intention is continue with the bulk sampling and if appropriate trial mining for the duration of Q3 2011 up to the commencement of the rainy season in November 2011.
Commenting today, Stephen Grimmer Chief Executive Officer said: "Our agreement to significantly increase our stake in IDC is transformational for Paragon. I am very optimistic about the opportunities that Lemphane and Kaplamp present for the Company and believe that the initial work we have proposed should deliver meaningful results by Q3 2011 in order to progress these two projects in an efficient manner."
In accordance with the AIM Rules, the information in this announcement has been reviewed by Stephen Grimmer PhD, a qualified geologist with over 20 years' diamond exploration experience.
Paragon Diamonds Limited Frank Scolaro - Chairman Stephen Grimmer - Chief Executive Officer Simon Retter - Finance Director www.paragondiamonds.co | +44 (0) 20 7099 1940
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Fox-Davies Capital Ltd Simon Leathers Jonathan Evans
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Definitions
t "tonnes"
tph "tonnes per hour"
DMS "Dense Media Separation"