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Gem International has significant diamond potential at Dala in Angola

Thursday, January 5, 2017 7:05
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Gem International Resources Inc (CVE:GI) holds a significant land position in Angola, one of the most prolific diamond producing companies in the world.

Gem’s ground at Dala, in the Lunda Sul province in the north east of the country, is prospective both for alluvial stones and for kimberlites, the source rock for diamonds.


Dala concession offers significant potential


At 3,000 square kilometres Dala is the largest allowable size for a diamond concession under the Angolan mining code and offers over 100 km of exposure of two of the best diamond-bearing rivers in Angola – the Tchicapa and the Luachimo.

Large, high-value diamonds are already being mined in small-scale garimpeiro operations, so there’s no doubt that the stones are there.

The question is: where will it be most efficient for Dala to go mining first?

To help answer that, 15,000 line kilometres of airborne geophysical survey were flown over the entire concession by previous owners. Follow-up work included 102 ground magnetic survey grids over airborne anomalies and 29 compelling exploration targets were then identified from this work. What’s more, 11 of these were drill tested, with 4 kimberlite pipes confirmed.

However, work stopped in 2009 due to the Global Economic Crisis before the pipes could be evaluated for diamond potential.


Diamond industry veteran Denis Hayes steps in


Old diamond mining hand Denis Hayes took an interest in Dala, having been introduced to it by contacts in Africa when he was living there. Advised by diamond legend Chuck Fipke, Hayes hired old Africa diamond hand Lee Barker to be the key operational man on the ground at Dala.

Hayes has also ensured the arrival of new to help fund work at Dala. In the summer of 2016 C$1.2 mln was raised, and a further funding was announced in September.

In terms of diamond exploration Angola is real elephant country, and Hayes is confident the Dala ground has more to it than currently meets the eye.

“From their shape we know the diamonds that we’re getting alluvially come from a kimberlite that’s very close.”

To the north, there’s the Catoka pipe. But the shape of Gem International’s stones is distinctly different from the Catoka stones. The diamonds that we’re finding probably come from our pipes,” says Hayes.


Short-term production plan


The plan is to go into production in the short-term from the alluvial targets, and to generate cash flow very quickly. The cash flow from these mining operations will then go towards funding the development of longer-term opportunity involving potential hard rock kimberlite mines.


Kimberlite upside


If the company can indeed identify a diamondiferous and economic kimberlite then it will be a real game-changer. The company will be transformed from a small scale producer to a multi-million dollar proposition. Hayes has done it before. It will be interesting to see if he can do it again.


Story by ProactiveInvestors


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