Carson acquiring international diamond assets

A past-producing diamond mine in Sierra Leone has become the latest African acquisition of Carson Gold (CQJ-V), and, in a simultaneous development, Carson’s board has resolved to change the company’s name to DiamondWorks.

Sierra Leone’s Koidu diamond mine will be included among the diamond projects being assumed by Carson Gold as part of its previously announced acquisition of privately held Branch Energy. Carson Gold is acquiring 100% of Branch Energy in exchange for 33 million Carson shares.

The 4-sq.-km Koidu lease area contains two diamondiferous kimberlite pipes, which, in total, are estimated to contain proven and probable reserves of 7.58 million tonnes grading 0.35 carat per tonne — equivalent to a total of 2.7 million carats. The majority of the stones are considered to be of gem quality.

Alluvial diamonds were first discovered at Koidu in 1930, since which time diamonds have been extracted from the two pipes by means of open-pit mining.

Over the past 15 years, the feasibility of more extensive mining activities has been explored through underground sampling and numerous technical studies. Carson expects to be able to salvage some existing mine infrastructure.

Under the acquisition agreement, Carson will hold a 60% interest in the mine, which it will also operate. The Sierra Leone government will hold 30%, while local investors will hold the remainder.

Carson also gains a half interest in the Njei-Bafi project and a full interest in the Upper and Middle Sewa, Kono Area 7 and Matemu concessions, all of which are situated in Sierra Leone. The projects are centred on alluvial deposits, with the Matemu project also hosting kimberlite targets.

The Njei-Bafi project hosts an estimated 46,300 carats, while Kono Area 7 is believed to contain 19,000 carats.

Meanwhile, in Angola, Carson assumes Branch Energy’s 74% interest in the Luo project and a 60% stake in the Luarica alluvial project.

The Luo comprises 156 sq. km in the Lunda Norte district and includes five known diamondiferous kimberlite pipes, plus associated alluvial deposits. A resource of more than 6.5 million carats is outlined for the Camatchia pipe, to a depth of 165 metres, whereas the Camagico pipe is estimated to host a 2.4-million-carat resource to a depth of 100 metres, with overlying gravels containing an additional 770,000 carats.

The Luarica concession comprises 450 sq. km and straddles the Chiumbe River.

An alluvial resource of 471,000 carats is outlined at Luarica.

In mid-March, trading in Carson was halted at the request of the company when it announced its intention to acquire China Diamond (CDC), a private company.

China Diamond has a 50% controlling interest in the Changma mine (China’s largest operating diamond mine) and 3,100 sq. km of diamond exploration ground in the Chinese province of Shandong. Carson Gold’s board has now approved the deal, in which 25 million Carson shares will be presented to the shareholders of China Diamond in exchange for all outstanding CDC shares.

Carson’s shares resumed trading Sept. 9.

In a parallel transaction, Carson Gold has agreed to buy all the non-cash assets of Yunnan Mining for 500,000 Carson shares, US$1.5 million and the cancellation of Carson’s 16.7% interest in Yunnan.

The primary assets of Yunnan include four joint-venture agreements covering gold projects in China’s Yunnan province, and two memoranda of understanding concerning advanced gold and copper exploration projects.