Gem Diamonds’ Angolan project remains on care and maintenance

Gem Diamonds has extended the care-and-maintenance phase of its Chiri project, in Angola until May this year, it said in its interim statement.
The Chiri project remained under review although opportunities continue to be explored in terms of the future of Gem Diamonds' involvement in this project.
The carrying value of the groups’ investment into the Chiri project as at December 2011 amounted to $14.5 million representing loans advanced of $6.2 million, capital assets injected of $1.4 million and development costs incurred of $6.9 million.
Gem said last month that should the opportunities to further the project not materialise, the group would be required to reassess the carrying value of this investment.
Gem had already embarked upon a preliminary evaluation which indicated that the kimberlite had a large surface expression of some 50 to 60 ha, although a significant portion of this was covered by fine grained kimberlitic sediments of minimal economic potential.
Diamond drilling had been carried out to refine the geophysical model and to define the geology of the kimberlite at depth.
Bulk sampling at surface had returned encouraging results and the large diameter drilling programme had provided estimates of grade continuity at depth.
Mined illegally during Angola’s civil war, Chiri’s diamonds had been assessed and were valued in July 2008 at about $150-$200 per carat.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished