The company said the acquisition of two more properties near Douglas, south-west of Kimberley, would ultimately enable it to produce at least 35,000 carats of gem quality diamonds per annum.
On Friday Majestic announced to the ASX that it had entered into an option agreement to acquire the Annex Saxendrift property 120km south-west of Kimberley.
Located on the Vaal River, Annex Saxendrift covers about 700 hectares, and drilling on some parts of the property indicates potential diamondiferous gravels of more than 8m thick.
Majestic took up the 12-month option on the ground through its wholly-owned subsidiary Intuthuko Mining for a cost $12,000. If it exercises the option it will be required to stump up a further $1.7 million in two payment tranches.
Majestic’s chairman Bob Wilde was in Angola and uncontactable when MiningNews.net phoned to question him about the deal. However, he did say in the ASX statement that drilling and bulk sampling at Annex Saxendrift would start immediately.
“The property is part of the extensive diamondiferous terrace and adjoins the mining operations of South African-listed company Trans Hex Group, which is currently recording alluvial diamond recoveries of 0.5 to 1.0 carats per 100 tonnes at an average value of $1000 to $1400 per carat,” Wilde said.
Majestic has also taken out a second option to buy a property known as Douglas Fel No which is located on the outskirts of Douglas where the Vaal River joins the Orange River.
Surface mapping and aerial photography have shown the potential for at least 8 million tonnes of gravels. Majestic is confident enough to predict the start of mining there in the second quarter of 2001. Mining will be at the rate of 1.5Mtpa to produce a minimum of 15,000 carats of high-grade alluvial diamonds.
As foreshadowed, Majestic has decided to go ahead with mining at Pniel following a successful bulk sampling program during the past 12 month.
Intuthuko will establish a mining operation on two sections of the Upper Terrace plateau gravels at a rate of 1.5Mtpa. This will yield an expected minimum of 10,000 carats per annum
Recent valuations of Pniel diamonds indicate that the average value should be in the range of $1500 per carat. The mine is expected to open before Christmas.
On the flip side to all this good news, Majestic said negotiations with the Klipdam Mining Company over rights to the Klipdam 157 property had hit an impasse and that “the project ceased to be a priority”
To fund this growth the Perth-based company has secured further monies by entering into an agreement with Melbourne-based investment group AutoCaps to provide the company with a $6 million convertible note.
The note issue is scheduled to have a term of three years and run at 8% per annum capitalised and convertible to ordinary shares at 33c per share.
