Juina Mining Corporation (GEMM)

[sarals]

Management Report Update September, 24th 2002

Processing plant commissioning and diamond recovery
Management are very pleased to report that commissioning of the processing plant has been completed and separation and recovery of diamonds from the first bulk sample has been carried out. A total of 12.60 carats of diamonds were successfully recovered and the exercise allowed for identification of a number of small shortcomings in the plant design which have largely been overcome.


A total of 95 cubic meters of gravel from the K-11 site was extracted with 20 cubic meters of oversize set aside for future crushing. Before processing, the jigs and X-Ray Sortex were tested with a 'dummy' run doped with diamond tracers and with the exception of a small break in the 2mm jig screen which has since been rectified, recovery was found to be 100%. Of the 75 cubic meters from K-11, a total of 17 stones were recovered including 2.50, 1.85 and 1.45 carat stones. A summary of recovered diamonds, pictured right, is shown in the table below.

Number of Stones Carats
Stones < 1 carat 12 4.25
Stones > 1 carat 5 8.35
Total Stones 17 12.60

Calculation of a recovered grade has been avoided at this stage given that oversize has not yet been processed, however management are particularly encouraged by the large average size of the stones recovered at 0.74 carats.


Environmental Issues
The Joint Venture has procured the services of a forestation engineer to be responsible for site recuperation and to report to the Brazilian Federal and State Environmental Authorities, IBAMA and FEMA. The Joint Venture partners are taking their environmental responsibilities very seriously and aim to continue what is now a good relationship with the environmental authorities.

Bulk Sampling Program
Samples have been now stockpiled from sites termed K-11, L-11, I-10 and J-11 and site H-10 is currently underway. In the interests of efficiency, it is aimed to have as much gravel stock piled as possible and in advance of the rainy season. During this time further excavation may be hampered by groundwater problems however it is expected that processing of stockpiled gravel will be able to continue unhindered. The Joint Venture will therefore be in a position to expand on its grade assessment program irrespective of season. Currently old sampling sites are being filled in to comply with environmental requirements and progress is being made to de-water a number of geologically interesting locations to focus the sampling project on key areas. It is anticipated that 15 bulk sample results will have been compiled within the next month and at this time management hopes to be in a position to assess the site in a statistically robust fashion.

Management feel confident that the plant commissioning and successful extraction of diamonds reported are testament to a skilled and efficient team on the ground in Brazil.

Forward-looking statements in this report are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties and actual results could differ from those discussed. This material is informational only and is not an offer or solicitation to buy or sell securities.
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Sara

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