Botswana Diamonds' Kimberlite Find Unviable

RAPAPORT... Botswana Diamonds will not continue exploration of the Ontevredenpipe in South Africa, after discovering it was smaller than previouslyexpected, it said Wednesday. "Modern mineral exploration technology is not a magic bullet,"said chairman John Teeling. "Modern geophysics indicated a 0.7-hectare pipe atOntevreden.Our drilling confirmed asmaller pipe, which is not currently commercial." Research by the University of Johannesburg showed that the site's rock displayed characteristics typically present in high-gradekimberlite pipes, the company said in October. However, though further drilling of the resource confirmed itcontained kimberlite, it was not enough to make the project viable forfull-scale operation. The miner plans to focus on two other South African projects.Botswana Diamonds has been awarded a prospecting license for the Mooikloofasset, adjacent to the Oaks mine - which De Beers owned, and close to anotherDe Beers mine -Venetia. Mooikloof was last prospected in 1986, yet Botswana Diamondsbelieves it was underestimated at the time and is still commercially viable. The miner has also received its technical evaluation of theThorny River project. The results show the deposit holds between 1.2 millionand 2 million tons of kimberlite, estimated to be worth between $120 and $220per carat. "Significant progress has been made on our joint-ventureprojects in South Africa," Teeling said. "We are pleased to finally be awardedthe Mooikloof concession.... The pipe is historically estimated at 2.5 hectaresin size, and contains diamonds." The company will reassess the pipe using recently developedexploration techniques, he explained. "Analysis shows that a mine on the Thorny River depositcould be profitable, assuming positive results from additional exploration," Teelingadded.