SearchGold Resources Inc./Stellar Diamonds Operational Update : Diamond Production and Sales, 30 Carat Diamond Recovered on Mand
May 28 2009 - 9:00AM
Marketwired
SearchGold Resources Inc. ("SearchGold") (TSX VENTURE: RSG)
(FRANKFURT: S10) is pleased to announce an operational update for
Stellar Diamonds Limited ("Stellar" or "the Company") in which it
holds 2.7 million shares or an interest of 5.5%.
HIGHLIGHTS
- Mandala project entered commercial production in April 2009.
Over 7,600 carats produced to date at an average grade of 44 carats
per hundred tons, including gem and non-gem diamonds of: 31.33,
12.94, 10.93, 5.79, 4.92, 4.66, 4.22, 3.98 and 3.7 carats in
size.
- Kono underground trial mining produces 4,400 carats to date,
the three largest diamonds being: 11.95, 11.40 and 10.55 carats in
size.
- Kono diamond sales realise $125,000 at an average $46 per
carat.
- Temporary care and maintenance of the Kono project implemented
due to weak diamond market.
OPERATIONAL UPDATE
Mandala Mine (85% ownership), Guinea
The Mandala alluvial diamond mine, 85% owned by Stellar with 15%
Net Profit Interest payable to local partners once past capital and
operating costs have been recouped, is now in production following
the successful commissioning of the plant on 20 April 2009. The
project comprises an independently verified diamond resource of
535,000 carats (NI 43-101 compliant).
Since January, the 55km access road from Macenta to Mandala was
rehabilitated and upgraded and the plant transported to site, where
it was erected and commissioned within 8 weeks. The plant has a
name plate head feed of 100 tons per hour and a DMS capacity of 30
tons per hour. Diamond recovery is by Flowsort X-Ray with a grease
table back-up, all performed under strict security conditions.
Commissioning and initial production material has come from
numerous areas within the mining concession as the Company
effectively embarked on a large-scale bulk sampling in order to
test the resource and the plant's capability to handle the
material. This has led to the recovery of some 7,670 carats at an
average grade of 0.88 carats per cubic metre (approximately 44
carats per hundred tons). The largest diamonds produced to date
weigh 31.33ct, 12.94ct, 10.93ct, though not believed to be of gem
quality. However, some excellent quality gemstones of 4.66ct,
3.98ct, 3.73ct and 3.33ct have been recovered.
These first diamonds have recently been exported to Antwerp for
valuation and sale, to test market conditions.
Modifications to the plant will see the daily production
increase from the current average of 300 cubic meters per day to
around 500 cubic meters per day (approximately 1,000 tons per day)
in the near future.
Kono Project (49% ownership), Sierra Leone
Underground trial mining has continued at the Pol-K and Bardu
kimberlites. Total diamonds produced to date is over 4,400 carats.
The in-situ grade of the Pol-K kimberlite consistently averages 65
carats per hundred tons. However at Bardu, a new kimberlite
intrusion has recently been intersected and sampled and has
returned an average grade of 140 carats per hundred tons, with a
large frequency of +1 carat stones.
A parcel of 2,697 carats of diamonds was recently exported to
Antwerp for sale. The parcel comprised mainly of Pol-K goods (80%)
with Bardu goods (20%). The sale realised $125,000 at an average of
$46.34 per carat. By means of comparison, in September 2008 a sale
of 811 carats from Pol-K and 252 carats of Bardu realised average
prices of $152 and $52 per carat respectively ($128/ct
average).
The difference between the two sales values clearly demonstrates
the present adverse conditions in the diamond market. On this basis
the Company and its 51% joint venture partner, Petra Diamonds
Limited, have agreed to place the Kono project onto temporary care
and maintenance until the rough diamond market improves
sufficiently to achieve more reasonable sales values for what the
partners consider to be good quality run of mine diamond
product.
Karl Smithson, CEO of Stellar commented:
"We are very pleased at the progress made in bringing the
Mandala project into production and the team on the ground needs to
be commended for their efforts. The initial grades at Mandala are
high for an alluvial diamond project and with the confirmed
presence of some larger diamonds, including a single stone of 31
carats, this bodes well for the future economics of the
project."
"However, the diamond market continues to be challenging as
exhibited by the low average price realised for the Kono diamond
sales. The most recent sale in April was over 60% lower than the
sale performed in September 2008, demonstrating the diamond market
still has a long way to go in terms of its recovery. Although the
diamond grades from Kono remain encouraging we realise that it is
not sustainable to continue to trial mine at such prices.
Therefore, with our partners Petra Diamonds, we have reluctantly
decided to enter a temporary care and maintenance of the Kono
project. This situation will be continually monitored as the
diamond market changes. We take a long term view on the Kono
project and in an improved diamond market the trial mining will be
resumed with the objective of determining the economics of the
project."
Philippe Giaro, P. Geol., President and CEO of SearchGold
Resources Inc. and Qualified Person for SearchGold, has reviewed
and approved the content of this release.
About SearchGold Resources Inc.
SearchGold Resources is a Canadian-based mining company
primarily focussed on gold deposits in Africa. Shares of SearchGold
Resources Inc. are listed for trading on the TSX Venture Exchange
as "RSG"; and the Frankfurt Stock Exchange as "S1O".
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: SearchGold Resources Inc. Philippe Giaro President
& CEO 32-473-52-30-29 phgiaro@skynet.be SearchGold Resources
Inc. Denis Tremblay Vice-President 1-514-866-4224
info@searchgold.ca http://www.searchgold.ca CHF Investor Relations
Alison Tullis Senior Account Manager 1-416-868-1079 x233
alison@chfir.com
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