|Atlantis II Red Sea Deeps |
The Atlantis II basin containing the Atlantis II deposit is located in the Red Sea, approximately 115 km west of Jeddah. The Atlantis basin is comprised of four interlinked sub-basins lying approximately 2,000 meters below sea level. Base and precious metal mineralization contained within the sediments have attracted considerable interest since their discovery in 1965. It is estimated that more than US $28 million (in 1970's dollars) was spent exploring the deposit. The historical work has shown the economic potential of the deposit by evidencing extensive and continuous mineralization of zinc, copper, silver, gold, lead, and other metals.
In the mid 1970's, the Saudi-Sudanese Red Sea Commission (RSC) was established with the directive of assessing the economic potential of these resources. Preussag A.G. was commissioned by the RSC to conduct a five-year geological exploration program and technical feasibility study. This process concluded in 1982 with positive results. Together with Manafa, DFI has obtained the records and hard data generated during the study, and have inspected the original sediment cores. DFI is analyzing the data and modeling the deposit using the latest technology and moving forward with the preliminary steps necessary to develop the project.
On average the Preussag coring program sampled only the uppermost 8.5 meters of sediment. The program demonstrated that mineralization is open at depth and extended over an area of approximately 57km2. Composited one meter core assays showed a variable grade in the top 7-11 meters of sediments, with high grade areas yielding results up to 20.1% zinc, 3.6% copper and 338 ppm silver. The underlying sediments were also shown to be mineralized in all of the samples. The thickness of these underlying sediments is currently unknown, but high resolution seismic studies undertaken by Preussag suggest that it may attain thicknesses of up to 28 meters.
A historical resource figure based on 587 core samples taken only from the uppermost unit and the first meter of the underlying sediments (average 8.3 meters thickness) estimated the deposit to contain 89.5 million tonnes of sediment at a grade of 2.06% Zinc, 0.45% Copper and 38.4ppm Silver on a dry salt free basis ("DSF"). The Company has not done sufficient work to classify the historical estimate as current mineral resources. Accordingly the Company is not treating the historical estimate as current mineral resources, and the historical estimate should not be relied upon.
A pre pilot test mining study undertaken by Preussag successfully demonstrated that the mineralized mud of the Atlantis II Deeps can be continuously mined and concentrated at sea, using conventional flotation techniques. During test mining operations, 15,000 m3 of sea floor sediments and brines from four test sites in the Atlantis II basin were processed. Metal grades derived from this operation proved to be higher than those predicted by the Preussag resource modeling, with grades varying from 2.51% - 4.91 zinc, 0.47% - 4.91% copper and 59.43 ppm - 111.24 ppm silver (DSF).
In 2010 the Red Sea Commission was reinstated specifically to award a 30 year licence to develop the Atlantis II deposit. The licence was awarded to Manafa International Ltd., a Saudi Arabian company based in Jeddah. Diamond Fields has entered in to a joint venture agreement with Manafa to pursue the project, whereby Diamond Fields has a 50.1% shareholding in the project licence.
The Company has completed a number of due diligence steps, including sourcing, re-logging and re-assaying sample from the original cores extracted during the Preussag campaign. The company has also completed a scoping study, and has started work on a pre-feasibility study.
Progress on the project is currently on hold pending a dispute with Manafa over performance and contractual issues. The company is currently filing arbitration against Manafa.
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