8th Apr 2005 07:44
Gravity Diamonds Limited08 April 2005 ASX & AIM (GRN) APRIL 8, 2005 GRAVITY DIAMONDS' DEBUT DAY ON AIM SEEKING KIMBERLITES IN AUSTRALIA AND DRC WITH LEADING-EDGE SKY SEARCH TECHNOLOGY DEVELOPED BY BHP BILLITON • First Drill Holes In Northern Territory Project Hit Diamondiferous Kimberlites • Big Exploration Programme Initiated To Generate Further Kimberlite Targets • Results From Congo Sampling Available Later This Month Gravity Diamonds Limited today listed on AIM by way of an Introduction in a movethat the ASX-listed company anticipates will attract a wider global focus andattention to its diversified diamond exploration activities. Approximately58p.c. of the company is held by European investors with an interest in thediamond industry. BHP Billiton holds a 9.6p.c. interest and management andfamily around 4p.c.. The company has A$9.9m cash. Gravity is exploring for diamonds in Australia and the Democratic Republic ofCongo (DRC), two of the world's principal diamond-producing countries. Theseinterests balance the low sovereign risk but higher geological risk of themature exploration terrains of Australia against the high sovereign risk butlower geological risk and greater potential for early major discoveries in theDRC. Key to Gravity's business strategy is its strategic alliance agreements with BHPBilliton where Gravity's managing director Mr Phil Harman was the former chiefgeophysicist and exploration manager for South America. The Australian programmeis based on deployment of the FALCON(R)* airborne gravity technology forexploration whilst the DRC programme gives Gravity access to highly prospectivediamond exploration ground previously unexplored by modern techniques to whichthe FALCON(R) system can also be applied. Both agreements give BHP Billiton theright to buy back control and management of any discovery at an early stageunder terms favourable to Gravity. The payback cash consideration is 4-5 timesthe exploration costs plus a royalty and/or a retained equity interest. In Australia, Gravity has exploration agreements in prospective areas which havea considerable history of conventional exploration and in each case, the companymay earn a minimum 50p.c. of new discoveries. It has three projects inAustralia: the Northern Australia Diamonds Project with Rio Tinto Exploration inthe Northern Territory; and two projects in Western Australia at Ellendale withBlina Diamonds and North King George with Striker Resources. The Northern Australian project is the largest, covering some 40,000km2 oftenements in a number of different areas. In 2003 the FALCON(R) system was flownover seven prime areas of interest covering about 3,500km2 which were selectedon the basis of the large volume of historic diamond sampling data available.Follow-up of priority FALCON(R) targets began in the 2004 field season usingloam and drainage sampling and in several areas where surface access waspossible, RC drilling was undertaken. /2 GRAVITY DIAMONDS 2 In January 2005, Gravity announced that two shallow holes drilled into FALCON(R)target ABN21 in the Abner Range, near McArthur River had intersected a newdiamond-bearing kimberlite. A total of 147 microdiamonds and two smallmacrodiamonds have been recovered from these holes and almost all of the stonesare whole, unresorbed and colourless of potential gem quality. Further work todetermine the size and grade of the discovery will start this month. At least 20other similar FALCON(R) gravity features in the vicinity of ABN21 will also befollowed-up. A FALCON(R) survey in late 2003 located a number of new targets on BlinaDiamonds' Ellendale project. That company has since completed first-passdrilling of the various targets and so far has identified three new small pipesand a new palaeo-channel. Bulk sampling in 2004 showed that, although the pipesare diamond-bearing, the average grade of the bulk samples was considered toolow to be economic. Further testing of the palaeo-channels and other targets isplanned, however. A FALCON(R) survey over a portion of the King George North area in the Kimberleyregion of WA in 2003 identified a large number of high priority targets. Surfacesamples were collected from 12 of these targets and eight have since reportedpositive for Kimberlitic indicator minerals or microdiamonds. KASAI CRATON INCLUDES SOME OF WORLD'S BEST DIAMOND GROUND The agreement with BHP Billiton to explore for diamonds in the Kasai region ofthe DRC was signed in August 2004. This area covers part of the Kasai Craton andlies immediately along trend from the rich diamond provinces in Angola and isconsidered to include some of the most prospective, effectively untested,diamond exploration ground in the world. The proposed exploration programme targets new kimberlite pipes and will employbroadly-spaced surface sampling for kimberlitic indicators to locate prospectiveareas, followed by airborne geophysics to identify specific kimberlite targets.Dependent upon results, and subject to government approvals, the FALCON(R)system may be deployed for specific target generation in the future. During the 2004 field season, Gravity completed a kimberlitic indicator mineralsampling programme using three helicopter-supported crews over more than20,000km2 of the tenements of the JV ground in the Kasai Craton. Numerousartisanal workings were encountered, thus confirming the widespread presence ofalluvial diamonds in the area. Sample results are expected later this month. An aeromagnetic survey over a 4,900km2 section of the sampled area will be flownshortly to objective of pinpoint magnetic kimberlite targets that could bepotential sources of the alluvial diamonds. The company has an exploration budget of US$5-6m for 2005 for an intensive workprogramme which is already underway. This includes an aeromag survey in theKasai area of the DRC and follow-up of the result, a ground gravity survey inthe Abner Range, with drilling and bulk sampling to follow in mid-year.Gravity has 119m ordinary shares in issue and at the current share price ofA$0.76 is capitalised at A$91m (£36m). The company has a strong board ofdirectors, chaired by Bobby Danchin, an experienced diamond explorer and formerdirector of global exploration for Anglo American. Phil Harman spent 34 yearswith BHP and executive director Nic Limb is a proven business innovator andformer managing director of New Hampton Goldfields Ltd. * FALCON(R) was developed at a cost of US$250m. It is a pioneering explorationtool that has been refined by BHP Billiton from technology that was originallycreated by the US Navy. FALCON(R) enables airborne collection of gravitymeasurements previously limited to ground deployment and makes it possible tosurvey much larger areas in a significantly shorter time. Gravity measurementreveals features that have a contrasting density with the surrounding rocks andhas particular application to diamond exploration and the search for kimberlitepipes. The FALCON(R) system is deployed in a single engined turbine Cessnaaircraft which is also equipped to collect magnetic and other geophysical data. Further Info: Phil Harman, Managing Director, Gravity Diamonds Ltd. Tel:00-613-9909-7655Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: 020-7628-5518 http://www.gravitydiamonds.com.au/ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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