SearchGold Reports That Stellar Announces First 1,000 Carats Produced From Underground Trial Mining at Kono Project in Sierra Leone
13:00 EDT Monday, June 23, 2008
MONTREAL, QUEBEC--(Marketwire - June 23, 2008) - SearchGold Resources Inc. (TSX VENTURE:RSG)(FRANKFURT:S1O), is pleased to announce a progress update on the Kono kimberlite diamond project in Sierra Leone. The Kono project is a Joint Venture between Stellar Diamonds Ltd ("Stellar") (49%) and Petra Diamonds Limited ("Petra") (51%). SearchGold holds 2,672,629 shares of Stellar which equals to an 8.7% interest in the Company.
Kono Project Highlights
- 1,049 carats (12,132 diamonds) recovered from trial mining to end May 2008
- First commercial diamond tender, and project revenues, scheduled for August 2008
- Pol-K shaft in-situ kimberlite grade increased to 66 carats per hundred tonnes ("cpht") and Bardu shaft in-situ grade established at 75cpht
- Stope trial mining from Pol-K shaft due to commence in August
- 3,167 line km E-M geophysical survey completed, processing and target selection ongoing
Karl Smithson, CEO of Stellar Diamonds commented: "The production of the first 1,000 carats from underground trial mining is a significant milestone in our Joint Venture with Petra Diamonds. We continue to be encouraged by the kimberlite grades and observed quality of diamonds being produced. We are moving to a position at the Pol-K shaft where we expect to significantly increase the monthly tonnage and diamond production. Through the planned tenders of diamonds in August and October, and regular diamond sales in the coming months, we expect to be able to offset project expenditure from revenues. We take this opportunity to congratulate Petra Diamonds, our partners and operators of the Kono project, for their continued diligent management and excellent progress made to date."
Overview
The exploration and trial mining operations at Kono project are progressing well and continue to deliver encouraging results. Two shafts are being developed, Pol-K and Bardu, and processing of exploration and development material to date has yielded 12,132 diamonds weighing a total of 1,049 carats.
The first commercial tender of diamonds from the Kono project is planned for August in Johannesburg, through existing Petra marketing channels. This is likely to comprise approximately 800 carats of diamonds from the Pol-K shaft and will give an indication of the likely minimum value to be realised from this kimberlite shaft. A second, larger tender, comprising diamonds produced from the first Pol-K stope, is being scheduled for October.
As diamond production from the trial mining stopes increases over the coming months, revenues from diamond sales are expected to generate regular cash flow to offset against development expenditure.
Pol-K Shaft
Development at the Pol-K shaft is continuing at the 64.5m level, with preparations underway for the commencement of test stope mining. Stoping is expected to commence by August and will result in increased ore extraction on which to assess, with more confidence, the diamond grade and value, as well as likely mining operating costs. The current grade at Pol-K is 66cpht and some 668.35 carats have been produced from this kimberlite.
Bardu Shaft
At the Bardu shaft, which is currently at a depth of 50m, a break out from the shaft has begun and exploration development along fissure strike has commenced. Some 244 carats of diamond have been produced at an average grade of 75cpht. Shaft sinking will continue to the 64.5m level (as at Pol-K) at which point, subject to ground conditions, stoping operations will commence.
E-M Geophysical Survey
Due to the considerable exploration potential at Kono, a 3,167 line km airborne electromagnetic geophysical survey has been completed by Fugro Airborne Surveys, the objective being the discovery of kimberlite pipes and blows. Processing of the data from the survey is expected to be complete by August, when target identification and follow-up of selected anomalies will commence.
Other News
Tongo Project
Mini-bulk sampling of four kimberlite dykes has commenced at the 100% owned Tongo project in Sierra Leone. Previous diamond testing by Stellar and independent analysis of these results estimated diamond grades of between 100cpht and 500cpht for these kimberlites. Extensions of some of these same kimberlites in an adjacent licence were recently bulk sampled by Koidu Holdings, who reported grades of between 196cpht and 288cpht from a 1,000 tonne sample. The historical diamond value for the Tongo dykes is estimated to be over US$175 per carat, which further supports Stellar's belief that these high grade dykes could have economic potential.
The objective of Stellar's current mini-bulk sampling programme is to collect and process approximately 400 tonnes of kimberlite in order to determine with more confidence the diamond grade and value from the kimberlites within Stellar's licence area.
North DRC Project
The first phase sampling programme has been completed in the 1,308km2 Remec joint venture area. Some 117 samples have been collected and shipped to Stellar's diamond laboratory in Monrovia, Liberia. Initial results show an abundance of kimberlitic indicator minerals in some samples, which is suggestive of the presence of as yet undiscovered kimberlites in the licence area. An appropriate follow up programme will be implemented once all results are available and interpreted. Stellar has the right to earn a 75% interest in the joint venture through funding to the bankable feasibility stage.
IPO Update
The Board of Stellar has decided to push back the planned IPO to Q4-08 on the basis of prevailing market conditions. Additionally, the Board also felt that Stellar would be in a stronger position to complete its IPO once the first diamond tenders have been completed. By this time Stellar expects to have realised its first revenues, adding value to the Company ahead of the planned listing. The Chairman of Stellar, Lord Daresbury, has written to all Stellar shareholders in respect of the above, as well as a proposed interim private placement of up to pounds sterling 2 million to be offered in July 2008.
About SearchGold Resources Inc.
SearchGold Resources is a Canadian-based mining exploration company whose primary mission is to target, explore and develop gold deposits in Africa. The expansion strategy executed in 2006 has set the stage for the Company's development in 2007 through increased activity on the advanced projects, a new acquisition and the segmentation of its activities to unlock value for its shareholders. SearchGold's diamond assets were re-organized along with Mano River Resources Inc., to create an integrated diamond company called Stellar Diamonds Limited of which SearchGold holds 2.7 million shares. SearchGold's Canadian gold assets were also re-organized through the creation of Golden Share Mining Corporation (TSX VENTURE:GSH), a dynamic junior exploration company focused on gold exploration in Canada.
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