TORONTO, Apr 12, 2006 (Canada NewsWire via COMTEX News Network) -- As a result of certain comments of a technical
nature received from the Ontario Securities Commission under National
Instrument 43-101 Standards of Disclosure for Mineral Projects, Tahera Diamond
Corporation ("Tahera" or the "Company", TSX-TAH) wishes to provide additional
information and clarifications on the Muskox kimberlite, which is part of its
Polar Project. This kimberlite is the main target of Tahera's exploration
program in 2006.
The overall shape of the Muskox kimberlite outlined near surface is
elliptical with dimensions of 200 by 215 metres, covering an area of
approximately 3.5 hectares. Approximately 87% of the pipe is located under a
small circular lake that measures 315 metres across, while the remainder of
the kimberlite is on land. The water over the lake-based portion of the
kimberlite averages 10 metres in depth and the overburden over the kimberlite
averages an additional 35 metres in thickness. The external contacts of the
kimberlite have some uncertainty due to the limited number of drill holes that
intersected the contact, and further work is necessary to increase confidence
with respect to the overall shape of the body. Current analysis indicates that
at a depth of 200 metres below the lake surface the area of the pipe is 2.1
hectares and at depth of 300 metres the area is approximately 1.4 hectares.
The current interpretation is that the Muskox pipe is composed primarily
of two phases of kimberlite; the MKU-A (hypabyssal magmatic kimberlite) unit
and MKU-B (volcaniclastic kimberlite breccia) unit, with each unit aligned
vertically. The characterization of the MKU-B unit is less well-defined than
the MKU-A unit due to the small number of drill holes that have been completed
in this unit. The MKU-B unit may not be a single unit and includes variations
in the volcaniclastic kimberlite, including any transition from MKU-A which
could not be mapped as singular units with some continuity. The internal
kimberlite contact between the MKU-A and MKU-B units is irregular and complex.
The contact is variably vertical to overhanging with the MKU-A at times
underlying the MKU-B unit. By volume, the MKU-A unit comprises approximately
49% of the pipe, while the MKU-B unit occupies approximately 51% of the pipe.
Other units present such as late stage hypabyssal dykes are believed to be
volumetrically insignificant. The current understanding of the kimberlite
units indicates that the MKU-A unit has significantly better diamond potential
than the MKU-B unit, however both units warrant further investigation. The
geological units and dimensions of the kimberlite pipe are preliminary and
require further delineation drilling and analysis for a more complete
understanding, and are subject to change as further drilling and
interpretation is completed.
A 3-dimensional model has been created to interpret the volume of the
Muskox kimberlite. Average wet specific gravity readings for each geological
unit were utilized to convert the volume into tonnage estimates. In 2005,
Tahera estimated that the kimberlite contained 12-14 million tonnes (Mt) to a
depth of 250 metres. These figures allowed for a conservative error margin and
were best estimates at the time of information release. The current
interpretation is that the pipe contains approximately 12.3 to 16.3 Mt of
kimberlite modelled to a depth of 300 metres below the lake surface. The MKU-A
unit is interpreted to contribute 6.3 to 8.3 Mt in Tahera's model, and the
MKU-B unit is estimated to contain 6.0 to 8.0 Mt. This is a preliminary
interpretation based on 9,488 metres of drilling from 45 diamond drill and
reverse circulation holes. This model does not include drilling from the 2006
campaign which is currently underway. Interpretation is ongoing and a new
3-dimensional model will be created when the current program is complete.
Tahera contracted Mineral Services Canada to provide grade modelling
based on the 2005 caustic fusion ("CF") results from six drill holes (see
Tahera's October 18, 2005 press release). Estimates of diamond grade ranges
were made by modelling the size-distribution of micro diamonds greater than
0.075 millimetres (mm). The model is based on statistical methods published in
1995 and 1998 by Dr. L. Rombouts in which curves are subjectively fitted to
size distributions assumed to be lognormal in character. A total of three
curves are fitted in order to assess the uncertainty in the data, and these
curves correspond to lower, middle and upper grades for the exploration
targets. The range of results obtained is shown in the table below. This grade
prediction range is for diamonds greater than 0.01 carats in size, with no
correction for breakage and loss of smaller diamonds that typically would
occur during recovery in a bulk sampling or mining plant.
Weights for individual micro diamonds were not available for the
modelling work and it was therefore necessary to use the sieve data for the
purposes of defining a weight distribution. This requires making an assumption
about the shape of the stones to convert the sieve class measurements (in mm)
into carats. While there is some risk attached to this approach, experience to
date suggests that the shape factor assumed is appropriate and yields
reasonably reliable results. Deviations from the assumed conditions will
undermine the reliability of the modelling results.
Note that the potential quantity and grade that may be inferred from the
data below is conceptual in nature and readers are reminded that there has
been insufficient exploration to define a mineral resource for the Muskox
kimberlite. It is uncertain if further exploration of the Muskox kimberlite
will result in the delineation of a mineral resource.
<<
Diamond Grade modelling results for the Muskox Pipe
(cut-off greater than 0.01 ct)
-------------------------------------------------------------------------
Sample Kimberlite Lower Middle Upper Model
Kg ct/t ct/t ct/t data fit
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Muskox MKU-A all 902.05 1.64 2.2 3.2 reasonable
-------------------------------------------------------------------------
Muskox MKU-A subset 777.85 0.82 1.22 1.65 reasonable
-------------------------------------------------------------------------
Muskox MKU-B 2812.55 0.3 0.41 0.57 good
-------------------------------------------------------------------------
Muskox MKU-B
subset 2688.95 0.28 0.41 0.52 good
-------------------------------------------------------------------------
Grade modelling was preformed on both the MKU-A and MKU-B units. Subsets
of the respective units were also modeled after the removal of a few larger
stones which did not fit on a lognormal distribution curve and could cause a
"nugget effect." The subset data can be considered a more conservative
prediction than the entire population; however the nature of diamond
distribution does not preclude these outliers from being part of the diamond
population. The modelled grade for the MKU-A unit subset was between 0.82 and
1.65 carats per tonne. The modelled grade for the MKU-B unit subset was
between 0.28 and 0.52 carats per tonne.
Although modelled grades based on microdiamonds can provide a good
indication of diamond potential, it cannot be assumed to be a reliable
indicator of true recoverable mining grade. Also, the modelling of diamond
size distributions to project an inferred commercial "grade" is progressively
more uncertain as sample size decreases. However, the samples used for the
modelling by Tahera in 2005 are not particularly small for caustic batches. It
should be noted however that the selection of the drill holes used for the
sampling were not selected to be representative of the entire geological
units.
Two bulk samples have been taken from the pipe by the previous operator,
De Beers Canada, and the results of these samples contradict the Tahera grade
models to some degree. A 1996 reverse circulation sample totaled 11.5 tonnes
and a 1997 HQ core program sample weighed 35.5 tonnes. Each sample encompassed
approximately 75% of the MKU-A unit and 25% of the MKU-B unit. Both samples
were processed by dense media separation, in a similar way to mine recovery.
The grade inferred by these samples ranged from 0.32 to 0.46 carats per tonne,
significantly different from the modelled grades. The discrepancy between the
modelled grade and the recovered grade of the previous bulk samples is being
investigated. Reports provided by De Beers indicate that a suite of 325 mantle
xenoliths weighing approximately 350 kilograms were removed from the 1997 core
which was subsequently mini bulk tested for diamonds. Based on data and
photographic evidence reviewed by Mr. Eugene Flood (Tahera's qualified person
for its exploration programs) of a preliminary analysis of some of these
xenoliths, there is indication that a number of these xenoliths contain
diamonds. Mr. Flood is of the view that removal of diamond-bearing xenoliths
may have lowered the indicated bulk sample grade and skewed the diamond
characteristics by eliminating that population of stones.
Tahera commissioned Mineral Services to describe 375 diamonds from the De
Beers bulk samples, weighing a total of 15.8 carats. In the parcel viewed,
primary shapes (octahedrons with occasional cube and cubo-octahedron)
predominate and a high proportion have crystal faces and edges that show very
little resorption. The stones were dominated by brown (50%) and white (43%),
with 86% of the brown stones classified as lighter shades. Over a quarter of
the population of the diamonds have equidimensional A-shapes (sawable), while
elongate B-shapes (makeable) constitute over half of the stones described.
According to Mineral Services, this is well above average for typical run of
mine diamond populations recovered from primary kimberlite, which tend to
contain higher proportions of flattened C-shapes (cleavage). The overall
average stone size of the bulk sample was very small (0.04 carats per stone),
and while the population of stones was considered above average in terms of
crystal shape and resorption, the high proportion of brown and the overall
small average stone size in the parcel are negative characteristics. It should
however be noted that the parcel size described is far too small to conclude
definitive diamond characteristics or value for the kimberlite as a whole, and
a parcel ten or twenty times larger would be required for even an approximate
indication of value.
The Saskatchewan Research Council, the laboratory that processed the 2005
CF samples, described all stones recovered larger than 0.3 mm for colour,
clarity, and crystal morphology. Characteristics of the entire population of
CF derived-diamonds may or may not hold up in the larger sizes
(greater than ~0.85 mm) commonly recovered in commercial diamond mining
operations. It should be noted that 93% of the stones recovered in the CF
samples are too small to be recovered in a typical commercial diamond recovery
plant. From this sample 115 stones greater than 0.85 mm were described of
which 93% are transparent or translucent, 63% are white or colourless, 70%
show primary crystal shapes, only 25% show resorption and 29% are frosted.
In 2004, the Company entered into the agreement (the "Polar Project
Agreement") with De Beers Canada Exploration Inc. with respect to the
exploration and potential development of the Polar property, on which the
Muskox kimberlite is situated, adjacent to Tahera's Jericho property. The
Company can earn a 50% interest in the property and any production therefrom
through expenditures of $11,000,000 by the end of 2008. Tahera expects to
reach this expenditure and earn its 50% interest during the second quarter of
2006.
The Polar Project Agreement provides for one or more projects to be
developed individually. In the event of the identification of an economically
feasible development project as determined by an independent consultant,
Tahera will be operator of development projects with defined value of less
than or equal to $750 million and De Beers will be operator of development
projects that exceed that value. Each party will market 100% of the production
from the projects they operate and remit the appropriate proportion of net
cash flow to the other party. By means of an arithmetical formula dependent
upon the size of each individual project, Tahera can elect to increase its
ownership to 75% through payments to De Beers of $6 million for projects less
than $350 million and $12 million for projects between $350 million and $750
million. Similarly, De Beers can elect to increase its ownership to 70%
through payments to Tahera of $24 million for projects between $750 million
and $1.7 billion, and $48 million for projects greater than $1.7 billion in
value.
Analysis of the economic viability of the Muskox kimberlite as a mining
resource or reserve has not been undertaken as further data is necessary for
such analysis. This includes, but is not limited to, mining methodology and
associated risks, costs or methods of transportation of rock, or depth
achievable for any future mining scenario. Any stated or implied volume or
tonnage of mineralized rock has not been assessed for economic viability.
The Company will be refiling an amended technical report to reflect the
above additional information and clarifications and an amended annual
information form. The Company expects these filings to be completed very
shortly.
Current Program Exploration Update
The current Muskox evaluation program is progressing as planned (see
press release dated November 30, 2005 for details regarding the program). The
exploration program is anticipated to result in the collection of over 5,000
metres of drill core and approximately 800 tonnes of kimberlite from the bulk
sample drilling.
To date, over 4,000 metres of HQ core drilling in 17 drill holes have
been completed. This drill core will be used for geological analysis and
further delineation of the internal and external contacts of the Muskox
kimberlite. The drilling has progressed very efficiently and it is now
expected that a further 1,500 metres of PQ and HQ core will be completed by
early May. Analysis of the core and updating of the geologic model is
underway.
The bulk sample is being collected using a 17.5" reverse circulation
drill. The first hole was collared on March 20, 2006. To date, 955 metres of
drilling in four drill holes has been completed, which equates to
approximately 400 tonnes of kimberlite sample. Tahera expects to collect
another 400 to 600 tonnes by early May. The sample will be processed at Rio
Tinto's Thunder Bay diamond laboratory. Sample processing will be completed
during the summer, with results and interpretation expected during the third
or fourth quarter of 2006.
The technical information in this press release was reviewed by Mr.
Eugene Flood and Mr. Mike Baumgartner, both "qualified persons" under National
Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Eugene
Flood, P. Geol., is Tahera's qualified person as defined in National
Instrument 43-101 for its exploration programs. Mr. Flood is a consultant and
is not independent of Tahera.
Mr. Mike Baumgartner, a registered Professional Natural Scientist with
the South African Council for Natural Scientific Professions (SACNASP), is the
qualified person as defined in National Instrument 43-101, for the modelling
and diamond analysis completed by Mineral Services. Mr. Baumgartner is
independent of Tahera.
Tahera Diamond Corporation (www.tahera.com) is a unique Canadian diamond
Company. Tahera's primary asset is its wholly-owned Jericho diamond project,
which represents Canada's third and Nunavut's first diamond mine. Tahera's
diamond purchase and marketing arrangement with Tiffany & Co., one of the
world's leading jewelers, ensures that the Company receives competitive market
prices for its Jericho diamonds. Tahera has several other prospective diamond
projects in Canada's prolific Slave Craton, including the Muskox kimberlite
joint venture project with De Beers Canada.
Forward Looking Statements
The above contains forward-looking statements that are subject to a
number of known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially from those anticipated in our
forward-looking statements. Although we believe the expectations reflected in
our forward-looking statements are reasonable, results may vary, and we cannot
guarantee future results, levels of activity, performance or achievements.
Tahera Diamond Corporation
Grant Ewing - Executive Vice President
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%SEDAR: 00003313E
SOURCE: Tahera Diamond Corporation
Investor Relations - Tel: (416) 777-1998, Fax: (416) 777-1898, Toll free: (877)
777-2004, Email: investor_relations@tahera.com, Website: www.tahera.com
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