ACN 078 606 434
Level 3, 46 Ord Street West Perth WA 6005, PO Box 1153 West Perth WA 6872
Tel +61 (08) 9483 3500 Fax +61 (08) 9483 3599 Website www.bonaparte.com.au
ASX AND MEDIA RELEASE
15 July 2008
31 CARAT DIAMOND AND POSITIVE TRIAL MINING RESULTS
DRIVE ACQUISITION OF SOUTH AFRICAN ONLAND DIAMOND MINE
Bonaparte Diamond Mines NL (“Bonaparte “or “the Company”)(ASX:BON) has recently completed trial mining and processing of a 16,000 ton bulk sample at the Savanna diamond mine in South Africa.
Parcel of Savanna Diamonds including the two large stones of 23 and 31carats.
Two large, high value gem quality diamonds of 31 carats and 23 carats respectively in size, were recovered as part of a total package of 202 diamonds weighing 241 carats.
The two large stones have been independently valued at US$290,000 and US$260,000 respectively. Bonaparte has now exercised its right to acquire 100% of the assets in the Savanna diamond mine and processing plant at a total price of AUD$625,000 and plans to move into full production during 2008. Details of the revised commercial terms are attached in Appendix 1.
Managing Director Mike Woodborne said, “The Savanna alluvial diamond deposit has revealed its potential to produce large, high-value diamonds, which is very exciting.
Overall it can produce diamonds at an economic rate and we are delighted to be moving forward with a mining project to generate cashflow to support both our diamond and marine phosphate development plans.”
“There is upside potential for higher grades and higher value diamonds within the deeper channel deposits, and for higher mining rates with development of additional features at Savanna,” Mr Woodborne said.
The Savanna alluvial diamond deposit is estimated to be Mesozoic in age, the same age as the majority of South Africa’s diamond bearing pipes, which is believed to account for the uniquely large size of the diamonds found to date.
Bonaparte Chairman Ted Ellyard holding the 31 carat diamond with MD Mike Woodborne
Level 3, 46 Ord Street West Perth WA 6005, PO Box 1153 West Perth WA 6872
Tel +61 (08) 9483 3500 Fax +61 (08) 9483 3599 Website www.bonaparte.com.au
Detailed results of the bulk sampling are provided in Appendix 2.
In summary, a total of 16,234 tonnes of gravel from a potentially lower grade pit on the edge of the main channel deposit was processed.
The bulk sample of processed material yielded 202 diamonds for 241 carats (“cts”) at an average size (arithmetic mean) of 1.19 carats/stone (“ct/st”), inclusive of the two large diamonds. Diamond quality is high with the majority of stones being considered gem quality.
The majority of the diamonds recovered are derived from the 8,000 tonnes of processed basal gravel (2m gravel above bedrock), which is targeted for production. During the trial mining, the basal gravel produced 144 diamonds weighing 194cts from 8,124 tonnes processed giving an average recovery of 2.4cts per hundred tonnes of gravel processed (“cpht”), inclusive of the two largest diamonds (lower screen size 1.5mm). Higher diamond grades, including the larger stones, are anticipated in the deeper parts of the Savanna channel deposit
Independent assessment of a 179.38ct parcel, comprising 127 diamonds at an average size of 1.41cts (inclusive of the five largest diamonds), was completed in June 2008 by a suitably qualified expert. The parcel was valued at a total of US$541,000 to US$670,000. Bonaparte retains 100% of diamonds and revenues as per the terms of the acquisition agreement. The valuation gave an average price range of US$3,018/ct to US$3,900/ct (excluding the two largest diamonds, the price range is US$510/ct to US$615/ct.)
Bonaparte now plans to upgrade the processing plant and to start production at the site from 1 October 2008, processing an average of 25,000 tonnes/month of plant feed gravel.
This is based on an assumed average of 2cpht recovered grade, a 4:1 stripping ratio and diamond value of US$1,500/ct based on assessment of results to date. At this production level, initial after-tax revenues of approximately AUD$2 million per annum are anticipated of which Bonaparte will retain a 74% share. There is upside potential in the form of higher grade and higher value diamonds within the deeper channel deposits, as well as possible expansion of the output rate with the development of additional features and further large, high-value diamond recoveries.
There are no JORC compliant resource estimates for the 182,000m2 Savanna target feature. The planned production drilling programme will be expanded to generate data for JORC compliant resources estimates and mine planning of the current mine feature, as well as to define resource in the additional development features. In the interim, the Company is satisfied that the existing geophysics and drilling data, coupled with the information from the bulk sampling results, show adequate grounds for assuming an average basal gravel thickness of 2m within the primary production feature, which will support production for the next three years at the planned output rate.
Level 3, 46 Ord Street West Perth WA 6005, PO Box 1153 West Perth WA 6872
Tel +61 (08) 9483 3500 Fax +61 (08) 9483 3599 Website www.bonaparte.com.au
Apart from the primary Savanna production feature there is an additional surface area of 370,000m2 comprising three ancient channel remnant features, similar to the Savanna feature as well as a peripheral deposit of surface “channel edge” gravels for further development.
Bonaparte Chairman, Ted Ellyard, said, “The Board’s decision to proceed with full scale mining of the Savanna project was only taken after extensive analyses and review. The occurrence of these high value diamonds in the relatively small bulk sample makes this a very exciting and potentially rewarding project and much credit is due to Mike and his highly competent South African team.”
For further information please contact:
Michael W Woodborne
Managing Director
+ 61 8 9483 3500
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Michael W Woodborne (M.Sc, AusIMM, AIG, Pr.Sci.Nat), who is an employee of the Company. Mr Woodborne has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Woodborne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Level 3, 46 Ord Street West Perth WA 6005, PO Box 1153 West Perth WA 6872
Tel +61 (08) 9483 3500 Fax +61 (08) 9483 3599 Website www.bonaparte.com.au
Appendix 1 Details of Revised Commercial Terms
Under a Heads of Agreement dated 18 March 2008 (“HOA”) including subsequent revisions, Bonaparte will acquire certain of the assets of Savanna Diamonds (Pty) Ltd, namely, all plant , equipment and mineral title associated with the Savanna Diamond Project (“Savanna Assets”). The Savanna Assets will be held in a newly registered South African subsidiary company, Matayo Trading 7 (Pty) Ltd in which Bonaparte has a 74% shareholding and the remaining 26% shareholding, which will be on a fully contributing basis to the subsidiary’s capital and operating costs, is to be acquired and held by Black Economic Empowerment (BEE) compliant entities. In this regard, Bonaparte has already identified and engaged a key BEE partner to acquire an initial 15% shareholding.
The acquisition price for the Savanna Assets is ZAR4.5m (AUD$625,000) payable in two tranches. The first payment of AUD$490,000 was paid on or before 14 July 2008.The balance of AUD$135,000 is due within seven days following grant of the new order mining right which currently is in the process of being converted from the old order mining right. An option fee of AUD$143,000 was paid in December 2007 to secure the acquisition option over the Savanna Assets and a trial mining period. Additional outlays of up to AUD$100,000 are anticipated and will include vendor commission which is subject to finalisation. The application for the new order mining right has been submitted and accepted for processing at the South African Department of Mines and Energy. A protocol number has been issued for the application and a positive outcome is anticipated. Permissions have been issued for mining operations to continue at the Savanna mine site in the interim.
Appendix 2 Geological setting and details of Bulk Sampling Operations
Locality of Savanna Project,
Level 3, 46 Ord Street West Perth WA 6005, PO Box 1153 West Perth WA 6872
Tel +61 (08) 9483 3500 Fax +61 (08) 9483 3599 Website www.bonaparte.com.au
The diamond bearing gravel deposits on the Savanna property are located within remnants of an ancient (>180million year old) river channel that lies in Dolomite country rock which is prone to formation of deep potholes. The primary Savanna target feature (Savanna Mine target, estimated surface area 182,000m2) is located within the ancient river channel gravel deposit and incorporates a deep pothole feature in the northern sector identified by previous explorers using geophysics and limited coring. Initially two bulk sampling/trial mining sites were identified 1) the north pit, to test interpreted high potential grade/value deposits and 2) the South pit, at the southern end of the channel to test lower potential grade/value deposits. Due to delays and performance issues with the earthmoving contractors, trial mining was completed only at the southern end (South Pit site). Moving northwards the channel drops into a large, deep (40m) pothole feature. Gravel deposits located within river channels and pot-holes in particular are recognised as prime trap sites for diamonds. Gravel was recovered from three test areas in and around the south pit, namely channel edge gravels (peripheral surface gravel deposits just north of the pit), and intermediate gravel and basal gravel (lower 2 m of gravel).
The bulk sampling results are presented in the table below.
Stones Carats
Recovered
Cpht ct/stn
Tonnes Processed
*
Channel edge
2 035
13
16.39
0.81
1.26
South pit intermediate
6 075
45
30.60
0.50
0.68
South pit basal gravel
8 124
144
193.53
2.38
1.34
Total Material Processed 16 234 202 240.52 1.48 1.19
(*conversion factor m3/tonnes = 1.7)
recovery of 2.4cts per hundred
outh Africa. Diamonds are not kept onsite at the mine and
are held off-mine in secure facilities.
s well
BON
bonaparte diamond mines nl
