Diamond Concessions

Afri-Can's Northern Concession:

Afri-Can’s northern concession area, the Woduna (Block J), is adjacent to a region where the estimated inferred diamond resources exceed 4.25 million carats. The southern boundary of the northern concession is situated 105 km. north of Luderitz. This concession area represents Afri-Can’s near-term production potential.

WODUNA (BLOCK J) CONCESSION

Block J covers an area of 994 sq. km. and occupies a part of the continental shelf in water depths ranging from 70 to roughly 170 meters. It is located off the coast of Namibia, 105 km. north of Luderitz, 10 kilometers west of the concession ML 36 (formerly operated by Namco) and bordered to the south by concession (EPL 1950), (also formerly held by Namco) that has a reported resource of 653,000 carats. The Block J (EPL 2499) concession is the subject of an option and joint-venture agreement signed in October 1999 between Afri-Can and Woduna Mining Holding (PTY) Ltd. Currently, Afri-Can holds a 70% undivided interest and is the operator of the joint venture.

Since October 1999, Afri-Can has invested in excess of CDN$4.4 million on Block J. The methodical approach used in exploring the concession has allowed the Corporation to complete two successful sampling programs.

Reconnaissance sampling: In mid-November 2001, De Beers Marine (PTY) Ltd. was contracted with its vessel the “mv Douglas Bay” to conduct a reconnaissance sampling programme. The objective of this programme was to prove the existence of diamonds and to delineate areas with diamondiferous sediment. 338 samples were collected from 29 anchor spreads covering an area of 728 sq. m. of gravels. A total of 23 gem quality diamonds weighing 4.65 carats were recovered, of which the largest stone weighed 0.64 carat. The samples were collected from 17 features of which eight proved to contain diamonds. Two of the samples contained more than one diamond. This is very significant as it proves that concentrations of diamonds occur in some areas well in excess of the normal background concentrations present along and off the West Coast of Namibia. The four main features identified are known as Features #8, #6, and #16 & # 17. (news)

Follow-up sampling: In mid-September 2002, Afri-Can concluded an agreement with Gemfarm Investments (PTY) Ltd to conduct the first phase of the follow-up sampling programme designed to determine the continuity of mineralization along and across the features, establish sufficient quantitative data to support an inferred resource, and establish preliminary data on potential mining economics. A total of 25 samples averaging 13.24 sq. m were collected over a sea-floor area of 0.365 sq. km. The samples were taken from two anchor spreads of which 21 samples were excavated in the first spread and four samples on the second spread. 11 samples were taken within the mineralized area, producing 84 gem quality diamonds, of which the largest stone weighed 0.49 carats. (news)

Analysis of the combined data from both programmes by Afri-Can’s technical team concluded that the diamondiferous nature of Feature #8, 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 m3 of screened gravel (1.6 mm screen). New geological evidence gained during the the sampling programmes 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.

During the phase 2 sampling, some fragments of conglomerate were recovered that contained mollusc fossils that were more similar to Lower Tertiary (from 65 to 3 million years ago) forms than to those of the late Pleistocene (from 3 million 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 km). 13 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 sq. km. The potential of Block J to contain a significant quantity of diamonds has been enhanced by the 2002 sampling programme. (news)

Follow-up phase 3 sampling is designed to determine the continuity of mineralization along and across the features, establish sufficient quantitative data to support an inferred resource and establish preliminary data on potential mining economics. Trial mining activities will also be conducted during the programme.