Lonrho (AIM: LONR), the conglomerate with a structured portfolio of African investments, is pleased to announce that Lonrho Mining Ltd (formerly known as Nare Diamonds) owned 23.01% by Lonrho, has made the following announcement to the Australian Securities Exchange this morning:
HIGHLIGHTS
• Lonrho Mining has completed a 1,000km2 airborne magnetic and radiometric survey over 1,000km(2) target area for the Lulo Diamond Concession with exceptionally encouraging results
• Interpretation by Lonrho Mining's independent geophysical consultant has identified 217 magnetic anomalies of which an estimated 160 are likely to be kimberlite pipes
• The diamond potential of this kimberlite cluster is very high given the activity of an estimated 6,000 artisanal diamond miners within the Cacuilo River terraces
• A drilling programme will commence this year on the 6 largest anomalies to confirm the presence of kimberlites
• A bulk sampling programme will commence this quarter on the alluvials following completion of base camp construction Australian based diamond exploration and development company Lonrho Mining Limited (ASX: LOM) ("Lonrho Mining" or the "Company"), today announced the identification of 217 magnetic anomalies from a helicopter borne aeromagnetic and radiometric survey conducted at the Lulo Diamond Concession in Angola (see Figure 1, Location Map).
The data from the survey has been processed by Fugro Airborne Surveys (Pty) Ltd and analysed by Lonrho's independent geophysical consultant Mr E O Kostlin. He has identified a large cluster consisting of 217 magnetic anomalies which he believes are in all likelihood due to kimberlites or kimberlite magma blows.
This cluster is located within the diamond bearing Cacuilo River catchment area on the Lulo concession.
Lonrho Mining's consultant geologist Manfred Marx believes that the results to date from the Lulo survey are the most encouraging that he has witnessed since the discovery of the Orapa Mine in Botswana in 1967.
Lulo is located in north eastern Angola, in an area which many experts believe will become a prolific region for the production of diamonds. The Catoca mine, which is approximately 90 kilometers from Lulo, produced approximately 7 million carats in 2007. Lulo is also adjacent to the Alto Cuilo concession which is a joint venture between Petra Diamonds and BHP Billiton where 77 kimberlite pipes have already been discovered.
Aeromagnetic Data
In February this year, a low level MIDAS helicopter survey was completed over 1,000km(2) covering the diamond bearing upper Cacuilo and Lulo Rivers. The aim of the survey was to assist in the discovery of kimberlite deposits within the surveyed area at Lulo.
The processing and analysis of the data acquired from the survey is now complete and has resulted in the identification of an extensive cluster of at least 217 magnetic anomalies (see Figure 2 and Figure 3).
Other diamond operators in this region (eg. Petra Diamonds Ltd, BHP Billiton) have reported that up to 75% of the targeted magnetic anomalies drilled on their neighbouring Alto Cuilo concession are kimberlite pipes. Based on this comparison, approximately 160 of the anomalies on the Lulo concessions are likely to be kimberlites.
Significantly, in relation to Lulo, the terrace gravels on the Cacuilo River have exceptionally high kimberlitic indicator mineral concentrations (see Figure 4) in addition to the presence of artisanal diggings, especially in the lower extent of the river system. Furthermore, historical records confirm the existence of 29 kimberlite pipes that are known to be within the concession area.
Kimberlite Work Schedule
The largest pipes within a kimberlite/lamproite province historically have the highest grades. This approach has been successfully applied by BHP Billiton and Petra Diamonds at the adjacent Alto Cuilo project which has identified approximately 77 kimberlites from 99 magnetic anomalies.
The Company's consultants have selected 6 of the largest targets, identified from the aeromagnetic survey and an aerial-photo study which have minimum estimated surface areas of between 5 and 20 hectares. The timing of this drilling programme is dependent on final government approvals and the usual logistical challenges, however, it is expected that the first phase testing of the selected 6 kimberlites is scheduled for completion this year. Roads will, as a priority, be constructed to gain access to these 6 priority targets.
Once a kimberlite is identified, bulk samples will be excavated from each pipe and treated at the Cacuilo River diamond recovery plant. If the surface definition of the target is unclear due to sand cover, then percussion drilling will be undertaken as part of the assessment. The pipe with the highest indicated grade will then be evaluated for its economic potential.
Alluvial Diamond Work Schedule
Alluvial diamond grades of between 9 and 20 carats/100tonne were recorded during colonial times in some of the Cacuilo River tributaries (Canguige and Camaconde River), directly draining some of the large photo-feature/magnetic anomalies.
Further evidence of the kimberlites diamond potential is the presence of an estimated 6,000 artisanal miners in the Cacuilo River valley.
Following the recent commencement of the Cacuilo River base camp construction, the initial bulk sampling stage will focus on the Cacuilo River terraces and flood-plain gravels. The first 6,000 tonnes of gravel will be treated by a 16 foot rotary pan. The aim of this first phase is to determine the best metallurgical practices applicable in the treatment of the Cacuilo gravels, as well as to gain a basic understanding of the diamond grades and values that can be expected in these gravel units. Given a favourable outcome, a greatly enlarged bulk sampling programme will be initiated.
The gravel deposits will be mapped and surveyed along 1,000m spaced trenches excavated at right angles to the flow of the ancient (and present) river. The initial 6 x 1,000 tonne bulk samples will then be carefully selected to gain a representative sample of the terrace gravels.
This initial phase is scheduled for completion by mid 2008.
Commenting on the survey results, Chief Executive Officer of Lonrho Mining, Charles Mostert stated:
"We are delighted with these results which confirms our belief that Lulo has the potential to be a world class project. The survey results have exceeded our expectations and demonstrates the high diamond prospectivity at Lulo. With the survey completed we look forward to finalising outstanding approvals and will then commence a drilling program as part of developing this exciting project."
About Lulo
The Lulo Diamond Concession is located in the Cuango River Basin within the Lunda Norte Province of north-eastern Angola approximately 630km from the capital city of Luanda. This concession is Lonrho Mining's flagship exploration project based on the high diamond potential. Some 29 kimberlites are known within the concession and extensive diamond bearing (garimpeiro activity) alluvials occur along the Cacuilo and Lulo Rivers.
Earlier this year Lonrho Mining announced that it had signed a Joint Venture Agreement with Endiama, the national diamond company of Angola and exclusive concessionary for Angolan diamond mining rights. Within the 3,000km2 Lulo Concession, Lonrho Mining's participating interest in the kimberlite deposits will initially be 39% of the joint venture which will decrease to 30% after recoupment of its investment in the Project. On all alluvial deposits Lonrho Mining's participating interest will be 40% in the joint venture.
Under the terms of the Joint Venture with Endiama, Lonrho Mining has paid a deposit of US$1.4 million in cash which is refundable after exploration expenditure of twice the amount by the Company within nine months after signing of the Joint Venture agreement. Lonrho Mining is also required to fund a work programme for which the first year of exploration expenditure will total US$3,5 million. Lonrho Mining will receive in priority the funds it has expended onexploration from future mining cash flow.
The Company has received all necessary approvals to commence exploration and development of the alluvial deposits at Lulo and is awaiting final gazettal approval in relation to the kimberlite deposits."
For more information please visit: www.lonrhomining.com
Competent Persons Disclosure
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves has been prepared by Manfred Marx and Consulting Geophysicist E. O .Kostlin. Mr Marx and Mr Kostlin are consultants to the Company and each has sufficient experience with the relevant style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to be qualified as a Competent Person as defined in the 2004 Edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Each of Mr Marx and Mr Koslin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Figure 1 - Lulo Diamond Concession
Figure 2 - Aeromagnetic total magnetic intensity colour contours
Figure 3 - Vertical gradient magnetic colour contours
Figure 4. - Digital terrain image showing Cacuilo River drainage pattern
Paste the following link into your web browser to download the PDF document related to this announcement:http://www.rns-pdf.londonstockexchange.com/rns/4081t_-2008-4-30.pdf
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NOTES TO EDITORS
About LONRHO:
Lonrho Plc is an expanding conglomerate that is rapidly growing a successful business throughout Africa. The Company's shares are traded on the London AIM stock exchange (LONR). Lonrho is strategically focused on the development of business opportunities in infrastructure, transportation, support services and natural resources. The Company has over 20,000 shareholders and substantial institutional backing to support its mandate to build a profitable business that plays a fundamental role in the development of the African economy.
Since 2006, the Company has invested in or acquired control of:
Hotel Cardoso - www.hotelcardoso.co.mz (retained)
Lonrho Mining - www.lonrhomining.com
Luba Freeport - www.lubafreeport.com
Fly540 - www.fly540.com
Swissta Holdings - www.swissta.com
SA Independent Liner Services - www.saliners.com
Bytes and Pieces
Kwikbuild - www.e-kwikbuild.com
LonZim - www.lonzim.co.uk
