news
Cream plans trial mining in Sierra Leone
2007-12-07 19:10 ET - Street Wire
by Will Purcell
Frank Lang's Cream Minerals Ltd. plans more work on its Sewa River diamond project in Sierra Leone once the weather dries out early next year. The company has been finding intriguing diamond grades from small samples of river gravels this year and is applying for a mining licence as a result.
The plan
Cream Minerals acquired its Casierra diamond project in 2005 through an option with Casierra Diamond Corp. Casierra acquired the project in the mid-1990s but its remote location and civil unrest in the West African nation hampered progress for several years. Sierra Leone is now experiencing an African version of peace -- its civil war is officially over, but armed roadblocks are occasionally set up to extort money from travelers.
Cream resumed mini-bulk sampling this year after a two-year hiatus and the work yielded enough sparkle to warrant larger tests. The two companies plan to apply for a mining licence covering their piece of the Sewa River, which will allow them to ship gems out of the country for appraisal and sale.
To prove the merits of the project, Cream and Casierra will need larger samples to yield enough diamonds for a proper appraisal and grade determination. Cream, which has now completed the spending required to earn a 70-per-cent interest in the project, expects to expand its mini-bulk testing to the bulk stage and into a trial mining operation once the permissions are received.
The players
The Vancouver-based Mr. Lang, 80, knows gold exploration, but the co-discoverer of one of the Hemlo gold deposits has had limited involvement with diamonds. He briefly tried gem hunts in the early 1990s with some of his other companies, but Ontario proved far stingier with gems than it did with gold.
Mr. Lang's partner, Casierra, is a private British Columbia-based company run by Ben Ainsworth, who also serves as Cream's project manager in Sierra Leone. Mr. Ainsworth started work for Placer Development Ltd. in the early 1960s, but diamonds do not figure prominently in his resume prior to Casierra's Sierra Leone play.
The encouragement
Cream and its partner tested about six cubic metres of gravels from the Sewa River this year, coming up with 10 diamonds. Those stones weighed 3.3 carats, supporting a grade of 0.55 carat per cubic metre and an average stone weight of one-third carat. That materiel conceivably could contain 1.8 million carats.
Historical estimates on what is now Cream's main Sewa River block put the potential amount of diamondiferous gravel within the main river channel at 2.2 million cubic metres, with another 1.15 million cubic metres in the flats and lower terraces. The estimated diamond content was about 0.5 carat per cubic metre.
Cream and Casierra's latest small tests provide support for those still hypothetical numbers, but the partners will have considerably more work to accomplish to establish the value of their Sewa River gems. The coarse average stone weight obtained in the tiny parcel this year does offer encouragement, and Sierra Leone is renowned for its valuable diamonds. Recent estimates suggest that rough diamonds from the area sell for over $250 (U.S.) per carat.
Grades and values close to those numbers would easily support a mine, as the partners think they could set up a commercial venture on their 10.5-kilometre stretch of the Sewa River for less than $10-million (U.S.), and operating costs should not consume a large portion of the potential revenues. The partners will need to prove those potential revenues with a large diamond parcel, and trial mining appears the most effective approach.
Cream closed down two pennies to 40 cents Wednesday on 85,500 shares.
--------------------------------------------------------------------------------
Reader Comments - Comments are open and unmoderated, although libelous remarks may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.
--------------------------------------------------------------------------------
Too bad more Howe Street players aren't like Frank Lang, someone who actually does real business.
Posted by Investor @ 2007-12-07 19:24
--------------------------------------------------------------------------------
Add a new comment
Name (required)
Email (optional)
Homepage (optional)
Note: this information will be made public along with your comment