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The Serra da Canastra Kimberlite Province in southwest Minas Gerais, Brazil has produced an estimated 2 million carats of diamonds since 1937 from small-scale alluvial operations. The largest diamond reported to date in the Serra da Canastra is 110 carats. This region is considered to be an excellent location for diamond exploration in primary source rocks associated with alluvial diamond occurrences. It is located within an impressive rift and plateau topography with complex structural geology. The kimberlites intrude the mid-Proterozoic Canastra Goup and are mostly buried along the extensive valley floors and beneath scarp scree deposits.
With the acquisition of De Beers' portfolio in 2002, Brazilian Diamonds has a 100% interest in an extensive land position in this region with over 100,000 hectares under licence. The region is particularly known for its kimberlite prospects with numerous pipes having been identified, many of them untested. The Company has been compiling an extensive mineral geochemical database of in excess of 20 known kimberlites in the province and has a complete database including both airborne and ground-based geophysical surveys, drill data and mineral chemistry analyses. This data is considered very valuable in the search for the source of the diamonds.
CANASTRA 1
The Canastra 1 kimberlite pipe (approximately 1 hectare in size) is within this region and is a known, significantly diamondiferous kimberlite pipe. Canastra 1 has already been bulk tested with the processing of approx. 20,000 tonnes of kimberlite which resulted in the recovery of more than 5,000 carats of gem quality diamonds. The completion of a feasibility stufy on Canastra 1 has confirmed that the project could become one of the first kimberlites in Brazil to be mined economically.
Trial mining of the Canastra 1 pipe is being planned in conjunction with the engineering from Gemcom Latin America, and is undergoing environmental permitting. Under Gemcom's conceptual study, Canastra 1 could produce 114,000 carats over a 4 year mine life. Trial mining will provide the necessary information to make the final mining decision, as well as produce approx 25,000 carats during its first year in operation. Processing will be completed using Brazilian Diamonds existing dense media separation (DMS) plant and diamond recovery facility featuring a flowsort x-ray diamond separator which is entirely containerized and ready to be transported to the site.
The licensing process at Canastra 1 has been complicated by the potential expansion of a nearby National Park, and although there is every indication that a licence will be granted to mine Canastra 1, at this time it is not possible to accurately estimate the exact timeline for such a grant. The Company is currently lobbying the Brazilian authorities to hasten the process for the licence grant while simultaneously concentrating on other prospective projects.
CANASTRA 8
Also located on the property, is the Canastra 8 pipe, much larger than Canastra 1; shown to be more than 20 21 hectares in size bu auger drilling and ground geophysics. Final approval is being sought to commence deep core drilling of this large body.
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