The Block J Marine Diamond Concession is located off the coast of Namibia, 105 km north of Luderitz. Covering an area of 994 square kilometres, Block J occupies a part of the continental shelf in water depths ranging from 70 metres to roughly 170 metres. The Block J Concession is subject to an option and joint-venture agreement signed in October 1999 between Afri-Can and Woduna Mining Holding (PTY) Ltd. Afri-Can holds a 70% undivided interest and is the operator of the joint venture. Block J is not subject to any royalties, back-in rights, payments or other agreements or encumbrances.
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Highlights
• Since 2000, Afri-Can has invested US $6 million in marine diamond exploration on Block J, completing three geophysical surveys and two sampling programmes. Afri-Can successfully completed Phase 1 of its Resource Delineation Programme which consisted of a geophysical survey totalling 1353 line-kilometres, and the extraction of 39 vibracore samples of 100 mm in diameter.
• Discovery of three large marine diamond deposits on Block J. These are similar to other major deposits that produce in excess of 1 million carats a year. The Phase 2 quantitative sampling programme in 2008 will involve up to 400 large bulk samples, each of 10 square metres. Phase 2 aims to establish an Inferred Diamond Resource in compliance with National Instrument 43-101.
• Potential diamond content is estimated at to up to 1.8 million carats on one of the mineralized areas in a 2008 technical report prepared in accordance with the provisions of National Instrument 43-101.
• Our geological team has a total marine diamond experience of more than 120 years. Our Resource Development Manager was involved in the discovery, off the coast of Namibia, of the largest marine diamond deposit ever delineated, the “Atlantic One” deposit, held by Namdeb and mined by De Beers Marine.
Geological settings
The March 30th, 2008 report entitled "The Geological History of EPL 2499 (“Block J”), Offshore, Republic of Namibia, with special reference to diamond mineralisation” prepared in accordance with National Instrument 43-101 is based on the high resolution geophysical survey and vibracore sampling programme carried out in October and November 2006. The report recommends a quantitative sampling programme to develop mineral resources on Block J. Key points are:
• Geophysics and vibracoring work in 2006 and subsequent interpretation and analysis of the results have much improved understanding of the geological history of Block J. This has allowed much greater confidence in targeting particular sediment formations.
• It is now known that, since early Tertiary times, a major drainage system ran off the continent into Block J. This provided a conduit for diamonds, released from Tertiary formations at higher levels, down into Block J during times of low sea level.
• During the last glacial maximum lowering of sea level, the older sediments were eroded and the Terrestrial Colluvial (“TC”) formation was deposited. Where the TC formation occurs adjacent to earlier diamondiferous outcrops, such as the Miocene Basal Unit, the former contains many diamonds.
• During the rise in sea level from the last glacial maximum at about -127 metres (below current sea level), there were stillstands, of at least 900 years each, at -123 metres, -112 metres, and -105 metres in the Block J area. Showing stillstands During those times, diamonds would have been in transport along the coast and were concentrated in places where conditions were favourable. Extensive gravel deposits occur in Block J dating from those times.
• Map 14 shows the current sampling targets in Block J. The outcrop of the Miocene basal Unit, and the TC formation adjacent to it, form an almost continuous ribbon across the property from north to south. Earlier sampling has shown that these formations contain diamonds and together they therefore form a major target for quantitative sampling.
• The total area of the mapped and interpolated outcrops of the Miocene Basal Unit and the TC formation is approximately 12.3 square kilometres, slightly more than the original estimate of approximately 11.5 square kilometres (see technical report entitled "Phase 2 Sampling in Feature 8, EPL 2499, Offshore, Republic of Namibia", reported in Afri-Can's press release of January 31st, 2007, which estimated potential mineral content at between 0.6 million and 1.6 million carats). The average grade of the samples within the target zone was 0.053 carats per square metre, and the average of the best 20% (used to compensate for inadequate sampler performance) was 0.146 carats per square metre. Applying these figures to the total area of the TC formation target zone suggests a potential mineral content between 0.7 and 1.8 million carats.
"Statements of potential quantity are conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.
Mr. Richard W. Foster is responsible for the Delmar Geoservices Ltd. report and is the designated Qualified Person. Mr. Foster has 43 years of postgraduate experience in exploration geology and specifically in marine diamonds. His experience includes marine geophysics, marine exploration and sampling, resource sampling and estimation and resource management. He is registered as a Professional Natural Scientist with the South African Council for Natural Scientific Professions (SACNASP) and thus meets all the requirements of a Qualified Person in terms of NI 43-101. Delmar Geoservices Ltd. has given its approval to the reference to the Delmar Geoservices Ltd. report and information derived therefrom in this announcement in the form and context in which it appears."
• The remaining targets on Block J cannot be assessed at the moment because of inadequate sampling. They are mainly beach deposits from the stillstands of the last rise in sea level in Features 6, 8, 19, and 17, but TC formation and Valley Fill material also occurs in some of those Features. Phase 1 sampling showed that they contain diamonds. Their total area is about 15.3 square kilometres.
Phase 2 Sampling Programme
A quantitative sampling programme will be conducted in 2009. The first round of sampling will mainly focus on Features 6, 8 and 17 insert maps and will comprise a 200 metres x 200 metres square grid, with about 325 samples of 5 square metres each. The 2009 programme is aimed at establishing an Inferred Diamond Resource in compliance with National Instrument 43-101, in some of the target areas.
Statements of potential quantity are conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.
Sampling Vessel
Afri-Can has an agreement with International Mining and Dredging Holding Ltd. (“IMD”) to carry out its sampling program marine concession Block J in Namibia. The sampling vessel is the MV DP Sampler (to be renamed), which is presently under conversion at the JML Shipyard in Singapore.
The 105 metre and 6,700 ton DP Sampler, which has two bow thrusters, a stern thruster, and two 60 ton cranes, is equipped with a full Dynamic Positioning II System and a mineral processing plant for diamond recovery. The mineral processing plant comprises a Feed Preparation module, a Primary Storage module, a Comminution module, a 20 tons-per-hour Dense Media Separation module, a fully-integrated X-ray Recovery unit, and a Final Recovery module incorporating a closed loop glove box sorting facility with an integrated safe. The vessel also hosts a moon pool of 8 metre by 10 metre that opens up in the base of the hull for access by sampling equipment to the water below, and an A-frame rated at 140 tons safe working load.
The 5 square metre sampling drill system is capable of operating at water depths of 250 metres and through 12 metres of overburden material. The sampling system can extract up to 21 samples per day. The sampling tool has sufficient capacity to crush footwall, boulders and cobbles in order to access trapped diamond resources, as well as drill through to older gravel concentrations. Importantly, the drive system of the sampler is umbilical, as opposed to a rigid drill pipe system, allowing work to be conducted during even adverse weather conditions. The system is designed to provide precise quantitative sample volumes, which will enable delineation of detailed economic resources, and establishment of mining equipment and technology.
IMD is an international marine mining contractor with state-of-the-art geophysical survey and sampling equipment. The parent company of IMD (Argo SRL) owns several marine exploration and mining vessels that have been successfully operating diamond mining projects in Namibian territorial waters for over ten years.
