CAPE TOWN (Business Day) -- Diamond exploration company Tawana Resources has begun discussions with several alluvial diamond operators who have the plant, mobile equipment and staff to help with a large-scale operating trial at its Eastern Gravels project near Kimberley.
Tawana Resources has a 74% stake in the Eastern Gravels alluvial diamond project, with black economic empowerment partner Seven Falls holding 26%.
BHP Billiton earns a 2.5% gross revenue-profit royalty.
The group said yesterday that trial mining in a typical section showed diamond grades of 2.27 and 3.07 carats a 100m^3 .
These grades were more than twice the estimated break even grade of 1.32 and provided strong evidence of the project's potential, Tawana Resources said.
At the Daniel kimberlite project, in which Tawana [ASX:TAW; JSE:TAW] has 22.2%, BHP Billiton [NYSE:BHP; LSE:BLT] 51.8% and Seven Falls 26%, Tawana Resources recently announced the discovery of three new kimberlites.
The discovery of the three new kimberlites has led to the reassessment of all previously drilled targets and the selection of several targets for drill testing in the first quarter of this year.
The partners have agreed to a programme for this exploration, which entails drilling 65 targets identified by aerial surveys using Billiton's proprietary Falcon technology.
At Kareevlei Wes, a kimberlite project which is 74% owned by Tawana, the group estimates a break even grade of 4,43 carats in 100 tons is needed.
The diamond grade of two of the pipes is 11 carats, a third pipe is showing high variation and the fourth pipe is showing a grade of about 5.7 carats.
Tawana Resources had applied for mining rights at Kareevlei Wes and was advised that it would take at least four months for the application to be processed, the company said.
In Australia, Tawana Resources has formed a joint venture company in conjunction with De Beers with a view to exploring Australian diamond projects.
It has started a sampling programme.
Tawana Resources recently completed a one-for-three issue of options to shareholders so that it could upgrade future envisaged production from Kareevlei and Eastern Gravels and maintain its exploration momentum.
Tawana Resources raised A$2.2 million in December through placing 3.7-million shares with institutions at A$0.60 each.
