Central Kimberley Diamonds Limited

Central Kimberley Diamonds Limited
ABN 112 292 645
9th November, 2010
CENTRAL KIMBERLEY DIAMONDS FINALISES STAGE 1 DUE DILIGENCE
Perth, Australia. Further to the Central Kimberley Diamonds Limited (“CKD”) (FSE: DIA)
announcement to the Frankfurt Stock Exchange of 19 October 2010; that publicised CKD
entering into agreement with Gemstar Diamonds Limited (“GDL”) to acquire the majority
interest of the Palmietfontein Project; the Company now wishes to announce that it has
completed Stage One Due Diligence and is now proceeding with Stage Two Due Diligence in
accordance with the acquisition agreement.
The outcome of CKD’s Stage I Due Diligence is very positive. Due diligence has confirmed
key parameters regarding the project, including, inter alia; the ownership and tenure of the
project, the diamond-bearing nature of the Palmietfontein kimberlite pipe, including the
tendency to produce large diamonds; and the outstanding exploration potential of the project.
Palmietfontein Project is considered by Snowden, a globally respected independent
exploration and mining consulting company, as a “one in twenty to thirty year”
opportunity.
For the purposes of reading about the transaction process; the announcement regarding this
agreement can be viewed on the company website: www.centralkimberleydiamonds.com
As part of CKD’s Stage One Due Diligence of the Palmietfontein Project, a thorough review
of all available industry and historical data, company reports and scientific literature was
undertaken. This announcement makes reference to certain independent comments
regarding this asset, which, in addition to the Company’s own research, has led to the
recommendation to advance this acquisition agreement to Stage Two.
The independent consulting group “Snowden” provided GDL independent assessment of the
Palmietfontein Project. Snowden made the following conclusion:
SNOWDEN: “It is difficult to overstate just how rare a 12.1 hectare, diamondiferous
kimberlite pipe is. It is doubtful whether a pipe of similar size to Palmietfontein is
discovered more frequently than once every twenty to thirty years by the world’s
global diamond exploration industry.”
In view of this independent geological assessment, CKD considers Palmietfontein kimberlite
pipe as a “once in a life time” opportunity – an acquisition by agreement that is the
equivalent, in terms of outcome, to that of the combined efforts of the global diamond
exploration industry over a 30 year period.
SNOWDEN: “With respect to the potential to discover other kimberlite pipes on the
Palmietfontein project area, Snowden has noted that kimberlite pipes tend to occur in
clusters (i.e. where there is one there tends to be others). In some cases there are
multiple pipes in close proximity to one another. It is not unusual to find that each
pipe in a cluster has its own distinctive range of characteristics and that one pipe can
differ significantly from an adjacent pipe”
These comments refer to the likelihood of additional kimberlite occurrences being present at
Palmietfontein. The second comment refers specifically to a target called the Maologane
Anomaly. The Maologane Anomaly is located 1,200 metres north of the Palmietfontein
kimberlite and is considered by CKD a high priority target. It is defined as a soil and
geophysics target with the following attributes:
•
A kimberlitic garnet count of 191 at a single soil sample centre (compared to
background levels of +/-5 garnets). By way of comparison: The Palmietfontein
kimberlite has a garnet soil count of 66 and 193 at two adjacent soil sample centres
(Figure 1).
•
A large circular aeromagnetic anomaly [coincident with the garnet anomaly north of
Palmietfontein]. By way of comparison: The Palmietfontein kimberlite has an
aeromagnetic signature which is smaller than the one at Maologane.
•
The garnet anomaly and the aeromagnetic anomaly are located on important faults,
which appear to control kimberlite emplacement in the greater Pilansberg area. By way
of comparison: The Palmietfontein kimberlite is located on the same fault.
As well as its own due diligence outcomes, Snowden’s independent assessment of
Palmietfontein has provided CKD a great deal of comfort moving forward. It is pleasing to
subsequently announce, as stated above, that the Company will now proceed to Stage II
Due Diligence and now undertake a grid soil and mapping exercise over both the
Palmietfontein kimberlite pipe and the Maologane Anomaly.
Kind regards,
Peter Rosenthal – Non Executive Director & Chairman
The information in this announcement that relates to exploration results and/or comments pertaining to resource
assessment is the opinion of and compiled and presented by Mr. Ross Brown, Director of Central Kimberley
Diamonds Ltd. Ross Brown is a Member of the Australian Institute of Mining and Metallurgy. He has sufficient
experience, which is relevant to the style of mineralisation and types of deposits under consideration, and to the
activity which has been undertaken, to qualify as a Competent Person as defined by the 2004 edition of the
“Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Brown
consents to the report being issued in the form and context in which it appears.
For further and questions information please contact:
Central Kimberley Diamonds Ltd.
Peter Rosenthal
Level 3, 105 St Georges Terrace
Perth 6000, Australia
Tel.: +61 8 9227 5455
[email protected]
Figure 1: Surface loaming sampling results (pyrope garnet count) across the permit.
Notable are two results: The garnet count above the known Palmietfontein kimberlite,
with a maximum of 193 garnets, and a sample result to the north, with a garnet count of
191.
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