One Step Ahead

[Bo14172]

Additional GEMM news:

They reached an working agreement with the native tribes where they will be allowed to contract with small local miners, and in working with them, mine small hectacres at a time. This is excellent since just the Companhoni areas C4-C9 contained 1854.15 carats and some of the highest grade levels.
C-0, C-13 and C-15 also show good promise.

Small scale mining with local miners involved keeps the tribal residents happy and certainly seems to ensure a stream of income for GEMM for a very long time to come.

We all wanted to have results similar to what we've seen in Shore Gold. We definitely have that now in GEMM.

Bo
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Juina, Diagem look to small miners to develop disputed property
Thursday , January 27, 2005 15:43 ET

Brazil, Jan 27, 2005 (BNamericas.com via COMTEX) --Montreal-based Diagem (TSX-V: DGM) and Las Vegas-based Juina Mining have filed for an application to mine an estimated 1 million carat diamond resource in Brazil's Mato Grosso state, Diagem CEO Mousseau Tremblay confirmed to BNamericas.

Juina Mining Mineracao, the joint venture the companies formed in Brazil, applied for the permit in conjunction with Mineradora ECO, a small mining company that represents small-scale local miners (garimpeiros), Tremblay told BNamericas.

Brazil's environmental protection agency Ibama stopped the JV from mining the property because of a dispute over its proximity to tribal lands of the Cinta Larga Indians. While the 1,000ha property does not include any tribal lands, it borders their lands and encloses part, Tremblay said.

However, working with garimpeiros, who can obtain a small workers license, allows the property to be developed on a small scale, Tremblay said.

"We really don't know how to deal with Ibama," Tremblay said. "This is why we have to give part of our mining rights to a small miner and mine with him."

Brazil's constitution is ambiguous about Indians' rights to mine on tribal lands, but it forbids any mining by non-Indians. A dispute between garimpeiros and Cinta Larga tribal members in nearby Rondonia state resulted in the massacre of 29 non-Indian miners working illegally inside the Roosevelt reservation. Authorities believe Cinta Larga tribe members carried out the murders in April 2004 and the investigation is continuing.

The property, one of about 15-17 totaling 130,000ha to which the companies hold rights, is about 100km from the area where the killings occurred, Tremblay said.

Exploration completed in 2004 indicated a resource of 1M cu. m. with 1.02 carats per cubic meter, largely in cemented gravels, Tremblay said. Some 22 bulk samples yielded 2,493 carats in 2,452 cu. m. of gravels, according to company data.

Three other blocks on the property also show alluvial and kimberlite resources that will be explored further in 2005, Diagem said in a statement.

In September Diagem and Juina Mining signed an agreement with Mineradora ECO to begin work on a 50ha slice of the 1,000ha property. A small worker license is expected to be issued on the 50ha in February, when mining will start, Tremblay said.

"It's only possible for small miners to acquire parts of big mining companies' rights and mine it," Tremblay said. When the garimpeiro completes work on the 50ha portion, the companies will work to secure another small worker license on another portion of the property, he added.

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