BlueRock’s subsidiary, Kareevlei Mining has acquired the Mining Right in respect of the Kareevlei Tenements (subject to approval from the DMR) and associated mining equipment, including a diamond processing facility.
The Kareevlei Tenements are located in the Northern Cape Province of South Africa, approximately 100 kilometres northwest of the town of Kimberley. The Kareevlei Tenements include the Kareevlei Kimberlites, five kimberlite pipes ranging in size from <0.5 hectares to <5.6 hectares.
A total of five kimberlite pipes (namely K1, K2, K3, K4 and K5) have been confirmed as part of the Kareevlei Tenements, although the smaller K4 pipe may coalesce with K1 at depth. The three pipes that have received the primary focus of past exploration programmes are K1, K2 and K3 which have sub-crop surface areas against the overburden calcrete of 1.2ha, 1.1ha and 5.6ha, respectively.
Prospecting at Kareevlei
De Beers Group Exploration discovered the Kareevlei Kimberlites in 1991 following an extensive airborne magnetic survey of the Ghaap Plateau and drilled three holes to confirm the presence of kimberlite.
In 1993, a joint venture between Gencor and Diamond Resources (a wholly owned subsidiary of AfriOre Limited at the time) undertook further prospecting work including the drilling of nine percussion holes (for geological delineation) and seven tricone holes (for grade sampling).
In 1994, following the withdrawal of Gencor from the joint venture, Diamond Resources undertook a phase of 1m diameter auger drilling. A total of thirteen holes were drilled, three holes in each of K1 and K2 and seven holes in the larger K3 pipe.
In 2002, Diamond Resources, under the ownership of Tawana Resources, conducted an extensive 10” percussion drilling programme (for geological delineation and grade and density sampling) on a grid of 40m on K3 and 20m on K2 to delineate these two pipes to a depth of 100m.
Treatment of the percussion material proved the presence of diamonds to a depth of 100m, but due to the relatively low grade of the pipes and the small sample support size, recoveries were insufficient for grade estimation; however, useful density measurements were realised.
As a result, in 2004, Tawana Resources undertook a BauerTM auger programme (initially on a diameter of 2.5m and then on a diameter of 1.5m) on four of the five pipes (K1, K2, K3 and K5) to provide grade and revenue data. A total of 5, 19, 21 and 2 holes were drilled on the K1, K2, K3 and K5 pipes, respectively. Two holes were sited on K4 but it appears that they terminated in the calcrete with no kimberlitic sample material being generated for treatment as no results were provided.
The results of the drilling programmes were sufficient to estimate grade and have been used by BlueRock’s Competent Person in arriving at an Inferred Mineral Resource.
A summary of the Inferred Mineral Resource is set out in the table below.
Further information including the Competent Person’s Report on the Kareevlei Kimberlites can be found in the AIM admission document dated 19 August 2013 in the Reports and Circulars section of this website.
During the previous exploration work, 222.9 carats was recovered from the Kareevlei Kimberlites. The stones ranged in size and quality, from gem to industrial, the largest being 3.74 carats with the average size 0.14 carats. The stones were divided into eight parcels which were put up for tender in Kimberley in 2008.
Kareevlei processing plant
The Competent Person has assigned an inferred level of confidence to the mineral resource and considers that the principal risk is related to the revenue estimate. Therefore the Competent Person has recommended that, as a high priority, a parcel of 1,000 carats is collected to improve the confidence in the revenue estimate, and has suggested that the required caratage is obtained from the highest grade pipe, K1. The collection of a diamond parcel of this size would be difficult to undertake through drilling and as such it is recommended by the Competent Person that the K1 pipe is opened up by removing a portion of the calcrete overburden to expose the calcretised and weathered kimberlite beneath for processing.
As a result, the directors have concluded that they will begin mining operations on the K1 pipe. The directors intend to use contractors to remove the calcrete overburden; this will involve waste stripping, hauling, drilling and blasting. Rather than waiting to assess a larger 1,000 carat sample, it is expected that the directors will assess diamond recovery on a continuous basis against the estimated grades and revenues in the CPR.
Similarly to other kimberlite pipes, which are characterised by having diamondiferous deposits relatively near the surface, the Kareevlei Tenements will be exploited using open cast mining techniques, which should enable the Company to reach production relatively quickly and inexpensively compared with deeper deposits which require underground mining techniques.
Once K1 is operational, the Company may commence exploration work on pipes K2, K3 and K5 if sufficient cash resources are generated following the initial work on K1. The K5 pipe has insufficient delineation data to create a model but limited grade and revenue data suggests that diamonds from the K5 pipe may potentially command a significantly higher revenue due to the coarser diamond SFD and therefore a delineation drilling programme and revenue bulk sample are recommended by the CP. Should funds be available, in future the Enlarged Board may undertake further exploration work at K5 in order to provide a SAMREC compliant resource for this pipe. In addition, subject to availability of funding, the Enlarged Board may investigate further K2 and K3, with a particular emphasis on providing a more accurate revenue model.