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Diamonds & Gold prospects (Tefea, Kano)

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Diamonds & Gold Prospects (Tefea, Kano) Diamonds & Gold Prospects (Tefea, Kano) Document Transcript

  • Saga Logistics Co., Ltd. DIAMONDS & GOLD PROSPECT TEFEA AREA / KANO DISTRICT SIERRA LEONE Developed by: January, 2004 DOVE Equipment & Machinery Co., Ltd. (Engineering & Technical Services Division) WWW.DOVEMINING.COM
  • Saga Logistics Co., Ltd. PREFACE The prospecting and exploration survey of the Diamonds & Gold Fields of : 1) TEFEA AREA 2) BAGBEMA AREA 3) BENDU AREA 4) KUNDOMA AREA Locate in the western part of Yengema Field, Kono District on the banks of Bafi River, was conducted durning the Nov – Dec, 2003, by Mr. Trakarn Nualbandan, The Senior Geologist with DOVE Engineering & Technical Services, a division of DOVE Equipment & Machinery Co., Ltd. All information, opinion and recommendations expressed in this report are solely for the internal use of DOVE and it’s clients. All rights of this report are reserved and no part of this report may be stored, reproduced, transmitted, or utilized in any from or by any means, without the express written permission of DOVE Equipment & Machinery Co., Ltd. DOVE EQUIPMENT & MACHINERY CO., LTD. 919/363 SILOM GALLERIA, 29TH FLOOR SILOM ROAD, BANGRAK BANGKOK 10500, THAILAND Tel: 662-630-1750/3 Fax: 662-630-3065 E-mail: SALES@DOVEMINING.COM Website: WWW.DOVEMINING.COM
  • Saga Logistics Co., Ltd. TABLE OF CONTENT SECTION CONTENT PAGE 1.0 INTRODUCTION 1-1 2.0 THE MINERAL INDUSTRIES OF SIERRA LEONE 1-1 MAP (1/1) SIERRA LEONE 2-1 2.1 GOLD 2-2 2.2 RUTILE 2-2 2.3 ILMENITE 2-3 2.4 BAUXITE 2-4 2.5 GRANITE (Dimension Stones) 2-5 2.6 PETROLEUM 2-5 2.7 OTHER ACTIVITIES 2-5 MAP (1/2) MINERAL MAP OF SIERRA LEONE 2-6 3.0 WORLD PRODUCTION OF NATURAL DIAMONDS 3-1 3.1 WORLD LIFE-CYCLE OF DIAMOND PRODUCTION 3-2 3.2 DIAMOND PRICES 3-3 4.0 DIAMOND DEPOSITS OF SIERRA LEONE 4-1 4.1 DIAMOND PRODUCTION IN SIERRA LEONE 4-1 4.2 DIAMOND PRODUCING AREAS 4-2 4.3 DESCRIPTION OF DIAMOND PRODUCTION 4-2 MAP (4/1) The diamond field of Sierra Leone – Index Map 4-4 MAP (4/2) The diamond field of Sierra Leone – 4-5 Geology of South-East Sierra Leone MAP (4/3) The diamond field of Sierra Leone – 4-6 Geomarphology of South-East Sierra Leone 5.0 DIAMONDS DEPOSITS OF TEFEA AREA 5-1 5.1 INTRODUCTION 5-1 5.2 LOCATION AND TRANSPORTATION 5-1 5.3 GEOGRAPHY AND TOPOGRAPHY 5-1 5.4 PREVIOUS EXPLORATION 5-2 5.5 PREVIOUS EXPLOITATION ACTIVITIES 5-2 5.6 GENERAL GEOLOGY OF TEFEA AREA 5-2 MAP (5/1) The diamond field of Sierra Leone – 5-3 Diamond distribution in South-East Sierra Leone MAP (5/2) Yengema 5-3
  • Saga Logistics Co., Ltd. SECTION CONTENT PAGE 6.0 BAGBEMA AREA (BG1 & BG2) 6-1 7.0 BENDU AREA (BD) 7-1 7.1 METHOD OF EXPLOITATION 7-1 7.2 PROPOSED PILOT PLANT 7-1 8.0 OTHER POTENTIAL AREA 8-1 9.0 METHOD OF EXPLOITATION 9-1 9.1 PROPOSED PILOT PLANT 9-1 10.0 CONCLUSION AND RECOMMENDATION 10-1
  • Saga Logistics Co., Ltd. 1.0 INTRODUCTION Sierra Leone is an independent republic, which lies on the bulge of West Africa and forms part of the West African Region. Sierra Leone became an independent republic in 1961, having previously been a British Protectorate since 1896 and under British administration since 1787. Freetown, the capital of this small West African state, derives its name from the freed slaves who were resettled there in the late 18th century. Their descendants have since played an important part in Sierra Leone’s culture and economy. During 1991 and up until early 2002 the country was ravaged by a decade of civil war that cost hundreds of thousand of lives and destroyed much of the country’s economy and infrastructure. The war ended in January 2002 and since then the Government of Sierra Leone has been putting in place the foundations to rebuild the country’s economy. Sierra Leone with the help of ECOWAS, the European Union (EU) and the United Nation (UN), and after three peace agreements, has managed to steer itself on to a path of peace, security and economic growth. Sierra Leone has made strong and evident progress to recover from the previous decade of civil strife. President Kabbah’s government has identified the mining sector as a prime vehicle to boost the much-needed, post-conflict economic growth, and a concerted effort is being made to enhance the country’s attractiveness to investors and increase direct foreign investment. 2.0 THE MINERAL INDUSTRIES OF SIERRA LEONE Mineral production in Sierra Leone in 2000-2003 consisted mainly of artisanal recovery of Diamond and Gold. Civil strife has adversely affected investment in natural resource development since 1995, even though the conditions have improved with the implementation of the July 1999 peace agreement. Table # 2.1, clearly indicates the important rule of Diamonds & Gold production, in the current economic livelihood of Sierra Leone. TABLE # 2.1 SIERRA LEONE: ESTIMATED PRODUCTION OF MINERAL COMMODITIES 1/ 2/ (Source: United States Government) Unit 1995 1996 1997 1998 1999 2000 2001 Bauxite MT 00 00 00 00 00 00 00 Rutile MT 00 00 00 00 00 00 00 Ilmenite MT 00 00 00 00 00 00 00 Cement 3/ MT 100,000 160,000 50,000 100,000 100,000 100,000 100,000 Diamond CARAT 214,000 270,000 400,000 250,000 600,000 600,000 600,000 Gold KG 4,000 16,000 20,000 15,000 30,000 30,000 30,000 Gypsum MT 4,000 5,000 2,000 4,000 4,000 4,000 4,000 Salt MT - 50,000 10,000 1,000 1,000 1,000 1,000 Iron Ore 1/ Table includes data available through July 26, 2001. 2/ Estimated data are rounded to no more than three significant digits. 3/ Production from imported cement clinker. PAGE 1-1
  • Saga Logistics Co., Ltd. PAGE 2-1
  • Saga Logistics Co., Ltd. In 1999, the Sierra Leonean Parliament enacted an amendment to the 1994 Mines and Minerals Act that introduced three new sections. These were a procedure for sale and export of precious minerals by license holders, penalties for unlawful possession of precious minerals, and penalties for smuggling precious minerals from Sierra Leone (Source: Mining Journal, 2000d). On January 18, 2002, the President of Sierra Leone announced the end of hostilities in the country, thus bringing the rebel war to an end. This announcement paved the way for mineral rights holders to re-start mineral exploration activities in the country once again. The Sierra Leone Mining Ministry issued a notice to all license holders to declare their intentions by providing proposed Project plans. Several licenses had expired owing to non- performance, the holders had suspended some whilst others were protected by force majeure. 2.1 GOLD Between 1930 and 1955, Artisanal and semi-mechanized gold mining spread around all areas of alluvial gold in the main schist belts of the ‘Sula’ mountains, ‘Kangari’ hills, ‘Nimini’ hills and ‘Gori’ hills. Bedrock gold deposits were mined in semi-mechanized operations at ‘Baomahun, in ‘Kangari’ hills and in the ‘Sula’ mountains at ‘Dalakuru’, near lake ‘Sonfon and ‘Yirisen’. Gold mining largely ceased following the agreement of the government to the Alluvial Diamond Mining Scheme in 1956, which for the first time legally allowed local people to mine diamonds. Gold exploration recommenced in the 1960s, when the Geological Survey undertook drilling programs for Gold and Base Metals at (Baomahun, Dalakuru and Komahun) in the Nimini Hills. Harry Winston undertook a program of underground development and drilling at Baomahun the late 1980s and established a pilot Heap-Leach pad and went into partnership to develop the deposit with Golden Star Resources Company, which subsequently was interrupted by the civil disorder. Following the election of President Kabbah in 1996, Exploration & Prospecting licenses for gold were granted, over almost all the known areas prospective for gold. However to date only a few companies have commenced working; Mano River Resources and Golden Prospect Co. being the most serious. The artisan miners perform the balance of the gold mining activities, mostly as a byproduct to the diamond mining. TABLE # 2.2: Gold Production in Sierra Leone (Official Records) (SOURCE: Geologic Survey of Sierra Leone) 1980-1984 1985-1989 1990-1994 1995-1996 GOLD (OZ) 46,300 51,700 13,854 654 2.2 RUTILE Rutile mining commenced in 1967 from mineral sands in the southeast of Sierra Leone. The operating company, Sierra Rutile Ltd. was owned by Nord Resources Corporation of the US and Consolidated Rutile Ltd. (CRL) of Australia. The mine was closed during the period of civil unrest but has been maintained on a care-and- maintenance basis. Since 1996 three studies have been made for the re-starting of the mining operation and the expansion of the mine involving the European Union’s Sysmin Fund proposed. PAGE 2-2
  • Saga Logistics Co., Ltd. In November 2000, Sierra Leone’s President announced that he hoped that Sierra Rutile Ltd. (owned 100% by MIL Investments SA of Luxembourg) would be producing sometime in 2002. Furthermore, he pledged to assist in any financing needed to restart operations. Nord Resources Corp. of the United States, which sold its 50% share in Sierra Rutile Ltd. in 1999, had forecasted capital expenditures of more than $100 million were needed to restart operations (Source: Industrial Minerals, 2001). Sierra Rutile Ltd. has now been taken over completely by MIL Investment SA, a company owned by Jean Raymond Boule, who has had a controlling interest in Nord Resources for sometime. Sierra Rutile had operated the largest and highest-grade resource of Rutile in the world prior to its abrupt closure in 1995 (accounting for about a third (33%) of the world’s production). The FOB price of Rutile (Australian-Ports) raised nearly 50%, from $ 450 USD to $ 675 USD per Ton, for a period of time. How ever the world production of Titanium Concentrates was estimated to have increased 6% compared with that of 1994. Owing to the loss of Sierra Leone as a major producer of natural Rutile, production suddenly decreased 33%. However, increased production of Ilmenite (7%) and Titaniferous slag (20%), primarily from Australia and South Africa, offset the decrease in the world Rutile production. TABLE # 2.2 TITANIUM: WORLD PRODUCTION OF RUTILE BY COUNTRY (Metric Tons) (SOURCE: United States Government) Country 1991 1992 1993 1994 1995 Australia 201,000 183,000 186,000 233,000 200,000 Brazil 1,094 1,798 1,744 1,911 1,900 India 13,635 10,000 13,900 14,000 14,000 Sierra Leone 154,800 148,990 152,000 137,000 -- South Africa 77,000 84,000 85,000 78,000 90,000 Sri Lanka 3,085 2,741 2,643 2,410 2,400 Thailand 76 281 49 49 -- Ukraine NA 5,000 4,000 3,000 4,000 U.S.S.R. 9,000 NA NA NA NA United States W W W W W Total 460,000 436,000 445,000 469,000 312,000 NA: Not applicable W: Withheld to avoid disclosing company proprietary data In 2001, the World Bank approved a $ 10.5 million US for renovation project, with plans to open the operation before 2004. Sierra Rutile is in process of raising $ 110 million US, required for the project. 2.3 ILMENITE Ilmenite is another major source of Titanium, with fairly major deposits in Sierra Leone. Ilmenite was mined mainly as the by-product of Rutile, by Sierra Rutile Ltd., up to the civil disorder in Jan 1995 and operation have seized since. Ilmenite occurrence is mainly in the beach sands in ‘Sulima’ area (Pujehun district), as well as within the Freetown Peninsular, near ‘Hastings’ and ‘Waterloo’. Other high potential areas are ‘Whale River’, ‘Toke River’, ‘Orugu River’ and ‘Big Water’ near York Pass. PAGE 2-3
  • Saga Logistics Co., Ltd. TABLE # 2.3 TITANIUM: WORLD PRODUCTION OF ILMENITE BY COUNTRY (Metric Tons) (SOURCE: United States Government) Country 1991 1992 1993 1994 1995 Australia 1,363,000 1,786,000 1,804,000 1,782,000 1,979,000 Brazil 69,064 76,558 90,567 97,439 102,000 China 150,000 150,000 155,000 155,000 160,000 India 311,537 300,000 320,000 300,000 300,000 Malaysia 336,347 337,744 288,950 115,885 151,680 Norway 625,000 708,000 713,000 826,000 830,000 Portugal 40 30 25 20 00 Sierra Leone 60,371 60,331 62,900 47,400 00 Sri Lanka 60,861 33,283 76,930 60,445 60,000 Thailand 17,075 2,967 20,821 1,677 33 Ukraine NA 250,000 200,000 150,000 200,000 U.S.S.R. 350,000 NA NA NA NA United States W W W W W Total 3,360,000 3,720,000 3,750,000 3,570,000 3,810,000 NA: Not applicable. W: Withhold to avoid disclosing company proprietary data. 2.4 BAUXITE Bauxite is associated with weathering of Hypersthene feldspar rich rocks of the Kasila group, which forms a NNW-SSE trending belt along the edge of the West African Craton. The occurrence of Bauxite in Sierra Leone was first recorded in 1920, on the road from ‘Falaba’ to ‘Waia’ in the north. The Geologic Survey discovered the biggest deposit in 1960 in ‘Mokanji’ and ‘Gbonge’ hills in ‘Moyamba’ district and Sierra Ore and Metal Co. (SIEROMCO) discovered the second most important deposit in ‘Port Loko’ area in 1972, with average grade of 48% Alumina and 3-3.5% Silica and reserves of over 100 million tons, out of which 77.3 million tons of proven Bauxite. The ‘Gbonge’-‘Mokanji’ Bauxite deposit was developed in 1963 by SIEROMCO, and subsequently in late 1960’s by Sherbro Minerals, a subsidiary of (Pittsburgh Plate Glass) and British Titan Products. Alusuisse Group of Switzerland, which was the owner of the SIEROMCO bauxite mine, began mining at Moyamba district in 1963 up to Jan 1995. From 1963 to Jan 1995 (mine closure, due to RUF rebel activities), the production grew from 150,000 Tons/year to 1,500,000 Tons/year, in late 1980’s and declined to 800,000 Tons/year until Jan/1995. Averaging 55-56% Alumina and 3-4% Silica. Total world production of Bauxite in 1994 was 107,000,000 Tons, produced by total of 27 countries. SIEROMCO Has announced that after reassessing the mine, it had decided not to return to Sierra Leone and was looking for a buyer of its operation (Source: Mining Journal, 200d; Economist Intelligence Unit, October 20, 2000, Sierra Leone economic background, accessed June 6, 2001). PAGE 2-4
  • Saga Logistics Co., Ltd. Currently SIEROMCO has handed over the control of the mine to the government in return for its liabilities and negotiations are underway with Sierra Rutile to take over the operations of the mine. Many of the assets were destroyed during the civil unrest. 2.5 GRANITE (Dimension Stones) Olympus Mining Ltd. began a pilot quarry operation near Freetown in 1995 and closed operation in 1997. In 2000 Olympus Stone, Inc., of Canada entered into an agreement to acquire the Black Pearl granite mine at Adonkia, Freetown. The mine had a production capacity of 300 cubic meters per month of dimension stone. Management estimated that $437,000 would be required to restart operations (Source: Canada Newswire, April 10, 2000. Olympus announces Black Granite mine acquisition). Olympus also has licenses in the southeast. A second company Swalford has also taken out licenses. It appears that South African based dimension stone companies are very interested to establish a base for the production of products in West Africa, on the basis that from West Africa to Europe the freight charges can significantly be reduced in comparison to the freight charges from South Africa. 2.6 PETROLEUM Following geophysical surveys across the continental shelf of Sierra Leone, two oil wells were drilled in the early 1980s. Following recent research suggesting that the oil trap structures are likely to be in much deeper water there has been renewed interest in the area. The government signed a non-exclusive survey agreement in August 2000 with TGS/NOPEC (of Houston, Texas and Oslo, Norway respectively) for a US$3.5 million, 2,500-line kilometer, and two-dimensional seismic survey of the continental shelf. A follow-up project of 3,200 line kilometers of in-fill has now been completed for the central and eastern continental shelf area and the company followed this up with a 9,000-line kilometer survey of the Liberian continental shelf. The government of Sierra Leone is in the process of reviewing its petroleum law to bring it into line with other petroleum-producing nations and, following this passing into law, will ask for bids for blocks of the shelf. This includes the possibility that a major explorer could take the whole region of interest. The government has asked TGS/NOPEC to supervise this process on its behalf with a bid round proposed for late 2001, with successful tenders being advised by February, 2002. Follow-up exploration expected for the 2002-3 season would include three-dimensional seismic imaging and proposals for the drilling of wells. 2.7 OTHER ACTIVITIES In a joint venture with the Ministry of Mineral Resources of Sierra Leone, TGS- NOPEC Geophysical Co. of the United States began a two-dimensional seismic survey that will cover 2,500 km in Sierra Leone’s portion of the Liberia offshore basin (Africa Energy and Mining, 200c). PAGE 2-5
  • Saga Logistics Co., Ltd. PAGE 2-6
  • Saga Logistics Co., Ltd. PAGE 2-7
  • Saga Logistics Co., Ltd. 3.0 WORLD PRODUCTION OF NATURAL DIAMONDS World natural diamond production for 2001 was estimated at a total of 118.9 million carats with a value of US$ 7.8 billion. TABLE # 3/1 NATURAL DIAMONDS: ESTIMATED WORLD PRODUCTION, BY TYPE AND COUNTRY SOURCE: United States Government (Thousand carats) Country 1997 1998 1999 2000 2001 Gemstones: 4/ Angola 1,100 2,400 3,360 3,914 4,653 Australia 18,100 18,400 13,403 11,992 10,700 Botswana 15,111 14,772 16,000 19,368 20,100 Brazil 100 100 900 1,000 1,000 Canada -- 203 2,429 2,558 2,600 Central African Republic 400 330 311 346 360 China 230 230 230 230 235 Congo (Kinshasa) 3,300 5,080 4,120 3,500 9,100 Cote d’ Ivoire 207 210 270 210 210 Ghana 664 649 282 178 700 Guinea 165 294 410 278 270 Liberia 80 150 120 100 100 Namibia 1,350 1,390 1,550 1,520 1,490 Russia 11,200 11,500 11,600 11,600 11,600 Sierra Leone 300 200 450 450 450 South Africa 4,500 4,300 4,000 4,300 4,470 Tanzania 82 83 200 301 302 Venezuela -- 80 59 80 85 Zimbabwe 321 10 15 7 5 Other 22 32 429 44 70 Total 57,200 60,400 59,600 62,000 68,500 Industrial: Angola 124 364 373 435 517 Australia 22,100 22,500 16,381 14,700 13,100 Botswana 5,000 5,000 5,350 5,850 5,060 Canada 1,091 Central African Republic 100 200 120 115 120 China 900 900 920 920 950 Congo (Kinshasa) 18,677 21,000 16,000 14,200 10,400 Cote d’ Ivoire 100 100 128 110 110 Ghana 166 160 101 712 170 Guinea 40 98 140 91 90 Liberia 120 150 80 70 70 Namibia 71 73 89 80 -- Russia 11,200 11,600 11,500 11,600 11,600 Sierra Leone 100 50 150 150 150 South Africa 5,540 6,460 6,020 6,480 6,700 Tanzania 35 15 35 55 53 Venezuela 85 17 36 29 40 Zimbabwe 100 19 30 13 10 Other 79 80 87 126 200 Total 64,500 68,700 57,500 55,700 50,391 Grand Total 122,000 129,000 117,000 118,000 118,891 1/ World totals and estimated data are rounded to no more than three significant digits; may not add to totals shown. 2/ Table includes data available through May 27, 2002. 3/ In addition to the countries listed, natural diamond is produced in Nigeria, but information is inadequate to estimate output. 4/ Includes near-and cheap-gem qualities. PAGE 3-1
  • Saga Logistics Co., Ltd. About 10 percent of the total production volume is Gem quality, which will be polished and set in diamond jewelry and 55 percent are near-gem qualities, which are polished by the vast low-cost Indian, Thai and Chinese cutting industries. The remaining balance is of industrial quality. Although more than 90 percent of industrial diamonds are produced synthetically, there are still some preferred uses for natural stones. De Beers’s mines in Southern Africa (Botswana, South Africa, Namibia, Tanzania) provide 45 percent by value of the world total production. 3.1 WORLD LIFE-CYCLE OF DIAMOND PRODUCTION The diamond life cycle is a representation in values of the steps in the diamond chain, from mining of rough to retailing of polished diamond jewelry. Table 3/2; present the estimated values of the official productions. TABLE # 3/2: World Diamond Production values by Country, 2001 Carats Average Price Value Producer Country (Thousand) US $/ Ct. US$(Mill) Angola 5,170 141.00 729 Australia 23,800 10.60 252 Botswana 25,160 82.00 2,063 Brazil 1000 40.00 40 Central African Rep. 480 146.00 70 Canada 3,691 134.00 495 Congo (Dem. Rep.) 19,500 21.00 410 Ghana 870 21.00 18 Guinea 360 200.00 72 Namibia 1,490 280.00 417 Russia 23200 83.00 1,926 Sierra Leone 600 230.00 138 South Africa 11,170 77.00 860 Tanzania 355 120.00 43 Venezuela 125 115.00 14 Other 1920 118.00 227 Total 118,891 65.00 7,774 NOTE: The Average prices were retrieved from US Government statistics. The progression through the diamond life cycle shows how world rough diamond production of US$ 7.9 billion (estimated total world production) becomes US$ 13.5 billion in polished diamonds at polished wholesale prices. Ultimately, it translates into US$ 56 billion in worldwide diamond jewelry sales, estimated at US$ 28 billion in wholesale value; this value includes the non-diamond components such as precious metals, designs, distribution costs and semiprecious stones. TABLE # 3/1: The Diamond Pipeline, 2001 Rough Rough Value of Polished Retail Sales Diamond Purchased Polished Ex- Diamond of Diamond Production for production Content in Jewelry Production Retail Sales (polishing) US$7.9BN US$9.1BN US$11.4BN US$13.5BN US$56.0BN Sources: Diamond Intelligence Briefs, De Beers PAGE 3-2
  • Saga Logistics Co., Ltd. 3.2 DIAMOND PRICES Open market prices of rough diamonds, which had fallen in many of the small and medium size ranges of gem quality by as much as 20 percent in the second half of 2001, recovered strongly in early 2002 after strong Christmas season diamond jewelry sales, but prices again softened in the second half of 2002, in the same categories. The rough diamond prices again recovered in 2003. Prices for large better color (white) stones have remained strong throughout. TABLE # 3/3 PRICES OF U.S. CUT DIAMONDS, BY SIZE AND QUALITY IN 2002-3 (SOURCE: Jewelers’ Circular Keystone) Carat Description, Clarity 2/ Representative prices (GIA Weight Color 3/ January 4/ June 4/ December 4/ terms) 0.25 G VS1 $1,500 $1,500 $1,200 .25 G VS2 1,380 1,380 1,150 .25 G SI1 1,130 1,130 975 .25 H VS1 1,400 1,400 1,100 .25 H VS2 1,250 1,250 1,000 .25 H SI1 1,050 1,050 925 .50 G VS1 3,400 3,400 3,200 .50 G VS2 3,000 3,000 2,800 .50 G SI1 2,500 2,500 2,400 .50 H VS1 3,000 3,000 2,800 .50 H VS2 2,700 2,700 2,400 .50 H SI1 2,400 2,400 2,200 .75 G VS1 3,800 3,800 3,800 .75 G VS2 3,600 3,600 3,600 .75 G SI1 3,300 3,300 3,300 .75 H VS1 3,650 3,650 3,500 .75 H VS2 3,450 3,450 3,450 .75 H SI1 3,100 3,100 3,000 1.00 G VS1 5,900 5,900 5,800 1.00 G VS2 5,700 5,700 5,500 1.00 G SI1 5,000 5,000 4,800 1.00 H VS1 5,500 5,500 5,200 1.00 H VS2 5,300 5,300 4,900 1.00 H SI1 4,800 4,800 4,700 1/ Data are rounded to no more than three significant digits. 2/ Gemological Institute of America (GIA) color grades: D - colorless; E – rare white; G, H, I – traces of color. 3/ Clarity: IF – no blemishes; VVS1 – very, very slightly included; VS1 – very slightly included; VS2 – very slightly included, but not visible; SI1 – slightly included. 4/ Source: Jewelers’ Circular Keystone. PAGE 3-3
  • Saga Logistics Co., Ltd. 4.0 DIAMOND DEPOSITS OF SIERRA LEONE The alluvial diamond mining fields in Sierra Leone cover most of the eastern province to central – south of the country. The totally area enclosed and currently known as diamond mining area is roughly about 19,943 square kilometers, out of the total area of 71,740 square kilometers (country total area). However from the known diamond mining area, only 12% or roughly 207 square kilometers is regarded as diamond mining region. Sierra Leone is renowned for the quality of its diamonds and for the recovery of some of the most spectacularly large stones of very high value. The largest diamond, discovered in February 1972, was the 969.8 ct ‘Star of Sierra Leone’, which is the 3rd largest diamond ever found in the world. In 1945, there was the recovery of 770 ct gem quality in Yengema on the flats of Woyie stream. In 1996, two stones weighing 188 ct and 283 ct were recovered. During our recent trip to the Kono district, we received reports from the locals, confirmed by the village chief that more recently two stones weighing 1,441 ct and 700 ct were recovered. Since the initially discovery of diamonds in Gbogbora stream in Kono District, in 1930, the alluvial diamonds fields of Sierra Leone have produced over 73 million carats of diamonds (see Table 4/1). However there are still substantial undeveloped resources, both alluvial and primary deposits, to be Explored & Exploited. 4.1 DIAMOND PRODUCTION IN SIERRA LEONE The annual diamond production in Sierra Leone since the initial discovery of diamonds in 1930 is presented in (Table 4/1). TABLE 4/1: SIERRA LEONE ANNUAL DIAMOND PRODUCTION YEAR TOTAL YEAR TOTAL 2001 600,000 cts 1980-4 2,095,400 cts 2000 600,000 cts 1979 855,160 cts 1999 600,000 cts 1978 542,080 cts 1998 250,000 cts 1977 10,679,500 cts 1997 400,000 cts 1976 9,619,400 cts 1996 270,000 cts 1975 1,377,190 cts 1995 214,000 cts 1974 1,716,360 cts 1994 255,000 cts 1973 1,354,780 cts 1993 158,000 cts 1972 1,799,350 cts 1992 347,000 cts 1971 1,944,170 cts 1991 243,000 cts 1970 2,047,070 cts 1990 778,000 cts 1969 1,934,470 cts 1989 134,000 cts 1968 1,519,530 cts 1988 11,000 cts 1967 1,419,910 cts 1987 302,000 cts 1966 1,436,700 cts 1986 381,000 cts 1965 1,464,150 cts 1985 348,700 cts 1929-64 26,210,400 cts Total production 73,907,320 cts PAGE 4-1
  • Saga Logistics Co., Ltd. 4.2 DIAMOND PRODUCING AREAS The main Diamond producing areas in Sierra Leone are concentrated in Placer (Alluvial) fields of (Kono, Keneme and Bo) districts and are mainly situated in the drainage areas of the (Sewa, Bafi, Woa, Mano and Moa) rivers and their tributaries, as it is depicted on “The mineral map of Sierra Leone” (Map ½), and on “The Diamonds fields of Sierra Leone/ Index Map” (Map 4/1) scale 1:250,000, and subsequently on “The geologic map of South-East Sierra Leone” (Map 4/2) scale 1:500,000, and the “Geomarphology map of South-East” (Map 4/3) scale 1:500,000. The balk of the diamonds recovered to date are placer deposits (Alluvial) Diamonds, which were discovered in river channel-gravels, flood plains-gravels, gravel residues in soil, and swamps. There are also two primarily Kimberlite deposits discovered in Koidu and Tongo areas. The Koidu reserves are estimated at 6.3 million carats, down to the depth of 600 meters, the mining-lease has been granted to (Rex Mining Company), and the Tongo Kimberlite reserves are estimated at 3.2 million carats to the depth of 600 meters, the mining-lease has been granted to (Branch Energy Company). The exploration permits have also been granted to (Olympus Development Co.) for the exploration of Panguma Kimberlite dykes, which are part of the Tongo Kimberlite dyke system. The information recently produced by the Geologic survey points to the fact that not all Alluvial diamonds occurrences, discovered to date, could be linked to the two known Kimberlite sources of (Koidu and Tongo) district. This is mainly due to the fact that the two Kimberlite deposits of Koidu and Tongo, constitute only a very small part of the diamond field discovered to date and also some of the high-grade placer (Alluvial) deposits are discovered at a fairly long distance of 112.65 kilometers from the known Kimberlite deposits. Therefore the conclusion points that there are other primarily diamonds sources, with unknown nature, and possibly they may well differ from the existing Kimberlite deposits in some respects. 4.3 DESCRIPTION OF DIAMOND PRODUCTION The majority of the diamonds produced in Sierra Leone are considered as Gem Quality. The production of 1993-2001 (Table 3/2), presents the ratio of Gem quality diamonds to the industrial quality. TABLE 4/2: DIAMOND PRODUCTION (% GEM QUALITY) (Source: United States Government & World Diamond Mining, 12/2003) Year Gem Diamond Industrial Diamond Total 2001 450,000 cts [75%] 150,000 cts [25%] 600,000 cts 2000 450,000 cts [73%] 150,000 cts [27%] 600,000 cts 1999 450,000 cts [75%] 150,000 cts [25%] 600,000 cts 1998 200,000 cts [80%] 50,000 cts [20%] 250,000 cts 1997 300,000 cts [75%] 100,000 cts [25%] 400,000 cts 1996 162,000 cts [60%] 108,000 cts [40%] 270,000 cts 1995 113,000 cts [53%] 101,000 cts [47%] 214,000 cts 1994 155,000 cts [61%] 100,000 cts [39%] 255,000 cts 1993 90,000 cts [57%] 68,000 cts [43%] 158,000 cts Total production 1,575,000 cts [66%] 802,000 cts [34%] 2,377,000 cts PAGE 4-2
  • Saga Logistics Co., Ltd. The characteristic features of the diamonds produced in various fields differ, and thereby the percentage of Gem quality of the diamonds production in various fields differs, as it is presented in (Table 4/3). TABLE 4/3: DIAMONDS PRODUCTION (QUALITY RATIOS) (Percentages by weight) (Source: P.K. Hall, Diamond fields of Sierra Leone) Clear Coated Bort (Opaque) Yengema/Field 50 45 5 Tongo Fiel 93 3 4 Upper Sewa 58 38 4 Middle Sewa 66 30 4 Lower Sewa 77 20 3 Matemu 90 2 8 Kenja/ Moa 97 1 2 Clear category diamonds represent the percentage of the production (Gem Quality), which will be polished and set in the diamond jewelry. A certain percentage of the (Coated) Category is considered as “Near-Gem” qualities. These would have been graded as industrial diamonds, some 40 years ago, but are now polished by the vast Low-Cost (Indian, Thai and Chinese) cutting industries. The remaining balance (Bort) category is considered as Industrial Quality. The range of sizes over which the Sierra Leone diamonds occur is a large one, and in any standard month’s production the weights of individual stones will vary from 0.03 carat to 50 carats. Larger stones are occasionally found; the largest recorded being one of 783 carats from the Yengema area. PAGE 4-3
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  • Saga Logistics Co., Ltd. 5.0 DIAMONDS DEPOSITS OF TEFEA AREA 5.1 INTRODUCTION The area under prospecting in ‘Tefea’ consists of four (4) blocks (Block BG1, BG2, BD and KD), which are located in the western part of ‘Yengema’ field along ‘Bafi’ river and its tributaries, in Kono district, as it is identified on the “Diamonds Fields of Sierra Leone” (Map 5/1), scale 1:250,000, and topographic map of “Yengema”, scale 1:500,000 (Map 5/2). After one week of prospecting and survey of the three prospecting blocks, under licenses in the ‘Tefea’ area (Blocks/ BG1, BG2 & BD), as well as the adjacent areas under exploitation by the local miners and analyzing the data retrieved from the report of (P.K. Hall, and Geologic survey), as well as various information retrieved from US government. We believe that there is a good alluvial diamond deposit (with gold concentration), feasible for mechanized mining operation. However due to the time constraints and the height of ground water level, we did not get the chance to do detail pitting & trenching for further analysis of the minerals concentration. However checking the old pits at nearby area and analyzing the associated minerals, discovered in the area, we are convinced that the two blocks designated as (BG1 & BG2) located in ‘Bagbema’ and one block designated as (BD), located in ‘Bendu’ area, should be considered as the initial mining area, to setup the pilot processing plant and conduct Exploitation. The 4th area (Block KD), marked on the topographic map (Map 5/2), with high potential of diamonds & gold, along the ‘Bafi’ river in ‘Kundoma’, further east of block (BD). This is also a very interesting area, which should be further analyzed for the possible future exploitation. Unfortunately due to the shortage of the time, this blocked was not surveyed properly. 5.2 LOCATION AND TRANSPORTATION The alluvial diamond mining licensed area called “The Tefea Area” is located in the western part of Yengema, in Kono District, Eastern-Province about 30 kilometers west of Koidu Town. The distance from Freetown to the area by road is 300 kilometers but the road surface rather poor with potholes, there are tracks leading from the main road to the prospecting area and it is important to note that; it will be difficult to transport during the raining season and cross the river to the prospecting area. 5.3 GEOGRAPHY AND TOPOGRAPHY The Tefea area is rather flat with flood plain of Bafi river (50-80) meters width, from west to east. There are some hills around the area with some big trees but mostly covered with secondary bush (long grass). There are two seasons, rainy from May to November, dry from December to April; the normal temperature range is 30-35°C and drop to 20-25°C at night (during these time). PAGE 5-1
  • Saga Logistics Co., Ltd. 5.4 PREVIOUS EXPLORATION There was a limited exploration activity done by the Sierra Leone Selection Trust Company (S.L.S.T) as well as the Geological Survey of Sierra Leone reported by P.K. Hall, but there has been no systematic prospecting in Tefea area. 5.5 PREVIOUS EXPLOITATION ACTIVITIES The Tefea area is relatively isolated, and there has not been much of exploitation by the locals. One of the main reasons for this is the height of the under-ground water, which practically makes it impossible for the artisanal miners to exploit manually, without proper equipment, except only in the shallow areas. The other reason is the thickness of the overburden in the area, which again it presents a difficult condition for manual mining methods. 5.6 GENERAL GEOLOGY OF TEFEA AREA This area is metamorphic rocks in Early Pre-Cambrian age, Grano-dioritic gneiss are form bed rock of diamond deposit with some massive unfoliated intrusive granites and mica-schist (Kambui Schist) in the same age with form Nimini Hill inside the area. The diamond deposit in this area is a placer (alluvial) deposit in Quaternary age, with the formation of recent Alluvium and river trace deposits, composed of clay, silt, sand and gravels. Also the presence of some elluvial material, but only in some selected areas were recorded. Mining blocks in Bagbema and Bendu are alluvial diamond occurred from weathered and decomposed Kimberlite in Post-Triassic age (evident from Kimberlite pipes dykes in Koidu area) but no Kimberlite outcrop have been found in this area, it may be decomposed. Detail geology of the two-selected area (BG1 & BG2) for diamond deposit and another area (BD), for potential Diamonds & Gold deposit follows. PAGE 5-2
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  • Saga Logistics Co., Ltd. 6.0 BAGBEMA AREA (BG1 & BG2) Mining Licensed Areas in ‘Bagbema’ Village (BG1 & BG2), are located in ‘Kakai’ stream (seasonal) tributary of Bafi River about 200 meters far from the Bafi River, as it is marked on (Map 5/2). There is evidence of some manual mining activity in the nearby fields, by the local people, however it is apparent that they stopped because of under-ground water height. Nearby the prospecting blocks, there is other old mine that reportedly had produced several large size diamonds, one piece over 50 carats, which is also confirmed by the Geologic Survey, in P.K. Hall report. According to the report of geological survey by P.K. Hall, diamond concentrate in the area varies, from (0.25 carat to 1.5) carats per cubic yard (0.33 – 1.96 per M3). The quality of the diamonds consists of: 50% (Gem quality), 45% (Coated) with a percentage of near gem quality, and 5% (Industrial). The geology of deposit is a placer (alluvial) deposit, where the overburden thickness varies in the range of (3-6) meters, composed of yellowish brown to reddish brown sand, silt and clay on top. Payable gravel layer (which contain diamonds) has a thickness of (1-5) meters, mostly compose of yellowish brown clay, sand and gravel sub-rounded shape, granite gneiss is bed rock with some Ilmenite and hematite have been found as (associated mineral). The average Pebble size is (1-2 inch). These data shows that this deposit is not far from source rock, and it may well be from upper Kakai stream. The condition of the road to the two blocks is good, except from the main road junction to Bagbema (about 11 Kilometers), which will be difficult during the rainy season. Photos of the Bagbema are presented in the following pages (Photo 6/1 – 6/6). PAGE 6-1
  • Saga Logistics Co., Ltd. Photo (6.1.1) Locals breaking clay by foot Photo (6.1.2) Locals breaking clay by foot PAGE 6-2
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  • Saga Logistics Co., Ltd. (Pic 6.1) Bagbema Area (BG) By Bafi River, about 200 meter from the license areas Area (Pic 6.2) Bagbema Area License Area (BG1) PAGE 6-4
  • Saga Logistics Co., Ltd. Potential Diamond Deposit Outside Area (Pic 6.3) Bagbema Area License Area (BG2) Area (Pic 6.4) Bagbema Area License Area (BG1) PAGE 6-5
  • Saga Logistics Co., Ltd. Area (Pic 6.5) Bagbema Area License Area (BG1) Area Area (Pic 6.6) Bagbema Area License Area (BG1 & BG2) together PAGE 6-6
  • Saga Logistics Co., Ltd. 7.0 BENDU AREA (BD) Mining Licensed Area in Bendu Village (BD), is located beside Bafi river, some parts of this mining licensed is old mine including around the area (Map 5/2). The geology of deposit is a placer (alluvial) deposit, with overburden thickness of about (2-3) meters, compose of yellowish to reddish brown sand, silt and clay on top, payable gravel layer thickness (2-3) meters compose of sand, silt and pebble gravel rounded shape. There is a concentration of Gold in this area in the same deposit as diamonds. Diamond deposit here may be called Ancient-Gravel deposit, in accordance to the size and shape of gravel. It is possible that the source of diamond is far from deposit running by Bafi River but the source of Gold is around and very near to the deposit. There are no data available about concentration but if this is ancient gravel, it means higher percent of concentrate than Bagbema area. (Pic 7.1) Bendu Area (BD) Diamond & Gold Deposit together 7.1 METHOD OF EXPLOITATION The recommended method of exploitation for the one block (BD) in “Bendu” is identical to Bagbema. 7.2 PROPOSED PILOT PLANT The Bendu area contain diamonds with gold concentration. The proposed pilot plant is identical to the plant proposed for Bagbema blocks. The proposed plant can recover and separate diamond & gold simultaneously. PAGE 7-1
  • Saga Logistics Co., Ltd. 8.0 OTHER POTENTIAL AREAS - LANDO DYKE, in Landoma, Tongo Field (S.L.S.T.). - YOMADU, near Bafi (Map Sheet 58). - GELEHUN AREA, Sewa river, Bo District (Sheet 90). - Block 13 (Sheet 90). - Block 20, 21 (Sheet 81). - KUNDOMA AREA, Gold and Diamond Deposit (KD). (Pic 8.1) Kundoma Area (near the license area) High potential gold, lower potential diamonds. Material from gravel layer, local diggings & washing by an old jig. PAGE 8-1
  • Saga Logistics Co., Ltd. (Pic 8.2) Kundoma Area Old mine, near the license area (Pic 8.3) Kundoma Area Locals digging & panning material for gold & diamond. Two people making 5-10 gram gold per day. PAGE 8-2
  • Saga Logistics Co., Ltd. (Pic 8.4) Kundoma Area Locals digging for gold & diamonds, utilizing an old model jig, for separation of minerals. (Pic 8.5) Kundoma Area Outside & next to the license area, local digging. PAGE 8-3
  • Saga Logistics Co., Ltd. 9.0 METHOD OF EXPLOITATION The recommended method of exploitation for the two blocks of (BG1 & BG2) in “Bagbema” areas is to start with a pilot gravity separation plant, either mobile or semi-stationary, for phase-I, to be upgraded to a larger plant at a latter stage. A) We recommend EXPLORERTM Mobile Gravity Separation Plants (wash plants), or SUPERMINERTM Gravity Separation Plants, as it is easy to move around and also, you will save time in plant installation. B) The clay in the area is classified as heavy clay and it is highly recommended to use gravel pump, in the feeding circuit. The gravel pump shall break the clay and free the diamond particles from the clay, prior to classification by the trommel. Photo (6.1.1 and 6.1.2), shows the locals trying to break the clay by foot, in order to separate the diamond particles. C) For placer areas, where The Diamonds & Gold Concentration is together, The EXPLORERTM or The SUPERMINERTM Mobile Plants could recover both The Diamonds & Gold at the same time. 9.1 PROPOSED PILOT PROCESSING PLANT 9.1.1 The proposed pilot processing plant for small to medium scale mining operation in the pacer Diamonds & Gold field of eastern Sierra Leone is consist of the following configuration. The proposed pilot processing plant for mining ( Diamonds ) consist of: (1) Explorer-IV, complete set, 1 set. (2) Centrifugal Pump (6” x 5”), 1 set. (3) Gravel Pump (Slurry Pump), 1 set. (4) Hopper/ Ore Feed Station, 1 set. (5) Grizzly Separator, 1 set. (6) Monitor, 1 set. (7) Piping & Hydraulic System. (8) X-ray unit, for sorting diamonds, 1 set. Note: If you intend to collect diamond particles below 2 mm, then you would need to add the following items. (9) Vibrating Sluice Table, 1 set. Note: To separate the diamonds (below 2 mm) automatically, you will need: (10) Concentrating Table, 1 unit. PAGE 9-1
  • Saga Logistics Co., Ltd. 9.1.2 The proposed pilot processing plant for Mining Gold, or Gold & Diamonds (together) : 1) EXPLORERTM or SUPERMINERTM Mobile Processing Plant (1 SET) 2) CENTRIFUCAL PUMP (1 SET) 3) GRAVEL (SLURRY) PUMP (1 SET) 4) GRIZZLY SEPARATOR (1 SET) 5) MONITOR (1 SET) 6) PIPING & HYDRAULIC (1 SET) 7) X-RAY UNIT (1 SET) 8) VIBRATING SLUICE TABLE (1-4 SET) 9.1.3 Additional Equipment & Accessories : In addition to the processing plant, there will be requirements for one unit excavator (used) and if the budget allows one unit dump truck (used). These equipment will be needed to dig the soil and transport to the plant feeding hopper. PAGE 9-2
  • Saga Logistics Co., Ltd. 10.0 CONCLUSION AND RECOMMENDATION After summarizing all information and based on our physical inspection of nearly 30 mining areas, we are convinced that the alluvial diamonds & gold deposits contain high concentrate to warrant a placer mining operation of medium to large-scale mining. Most areas proposed, during our visited was already mined in past, mostly by the locals, however the blocks in Tefea are virgin areas. Our recommendation is to start with one or two pilot plants in these blocks and meanwhile to continue systematic exploration and detail pitting of the area to select new areas to be added. In the next phase the pilot plants can be moved to the new areas and a medium to large scale gravity separation plant could be installed. The soil can be transported by dump truck, from different block to the main plant, for final processing. PAGE 10-1
  • DOVE Equipment & Machinery Co., Ltd. 919/363 Silom Galleria, 29th Floor, Silom Raod, Bangrak, Bangkok 10500, Thailand Tel: (662) 630-1750/3 Fax: (662) 630-3065 E-mail: corporate@dovemining.com WWW.DOVEMINING.COM