Diamonds

Diamonds in Guyana
Guyana is 83,000 square miles in area, and is situated on the North-Eastern coast of South America, bordered by Suriname to the East, Brazil to the South, and Venezuela to the West. Guyana meets the Atlantic Ocean to its North, and much of this coastal area is at or slightly below sea level, and is protected by extensive sea defences.

In the interior, large areas of savannah separate the coastal plain from the mountains and tropical forest regions of the South and West. Behind its low-lying coastal plain, the inland regions slope upwards to the mountain ranges in the West and South. The highest point is found to the West, in the Pacaraima Mountains where Mount Roraima reaches 9,094 feet. Much of its hinterland forms a part of the 'Guiana Highlands' - a very large massif of Pre-Cambrian formation between the Orinoco and the Amazon Rivers, shared by Guyana, Venezuela, Suriname and Cayenne, and consisting of mesas and deep, narrow valleys mostly covered by dense forest. The mountains contain vast iron-ore deposits as well as diamonds, gold and other minerals. There are numerous large rivers, of which the most important are the Essequibo, Cuyani, Mazaruni, Demerara, and the Berbice.

The country has extensive mineral resources and an agricultural potential which, it is said, have yet to be fully exploited. The main products are sugar, rice, gold, and bauxite, but all are produced in lesser amounts than in the past due to severe economic, financial, and political constraints. Diamonds and timber are also products of note from Guyana. Guyana is an active exporter of diamonds to countries all over the world, and an estimated 149,764 carats of the precious gem was declared in 2003, surpassing the January to May 2003 projection of 118,244 carats.

Nearly all diamond production comes from alluvial operations. Vannessa Ventures Ltd. of Canada and Guyanor Resources S.A., a subsidiary of Golden Star Resources, Ltd. of the United States and Rio Tinto plc of the United Kingdom were actively exploring for diamonds in Guyana.

The Company holds three regional blocks which have potential to hold economic deposits of gold and diamonds based on historic production. The blocks are as follows:

Regional Block	Claims	Permits	Sq Mi
Kurupung	0	7	6.6
Potaro — Kuribrong	0	9	14.1
Mahdia	82	0	13.6

The Kurupung and Potaro-Kuribrong regional blocks are held as medium scale Prospecting Permits. The Mahdia regional block is held as small scale claim permits and claim licenses. All three of these areas host occurrences of both diamonds and gold in alluvial deposits and have significant production recorded by the GGMC.

Kurupung Regional Block

Introduction
The Kurupung River Region is an important historic diamond producer in Guyana. Diamond production in the Kurupung River Region dates from the late 19th century, with extensive alluvial deposits mined continuously since then. At present, the Kurupung River Region is producing at record levels at least partly due to an influx of Brazilian miners bringing with them process technology which, albeit crude, is much more effective in recovering diamonds, particularly larger stones.

Location and Access
The Kurupung regional block can be accessed by air, by river or by road. Charter flights are available to a dirt strip at the village of Kurupung, from which a small boat can be used to access the Company's properties. Alternatively, a charter jet boat can be taken from the village of Parika up the Essequibo River, then up the Mazaruni River to the Kurupung River where a small boat can be utilized to access the Company's properties. Finally, an overland route via the Puruni Road can be taken to the mouth of the Kurupung River from which a small boat can be used to access the Company's properties. (See Figure 1)

Figure 1 (449 Kb PDF)

Regional Geology and Exploration Potential
The Kurupung River Region is overlain by Roraima Formation sediments, with predominant sandstones and conglomerates deposited in a Late Proterozoic platform environment. The diamond deposits of the Kurupung River Region are product of the erosion and subsequent deposition of these rocks. The Company's properties in the Kurupung regional block are believed to be prospective principally for diamonds.

Potaro – Kuribrong Regional Block

Introduction
The Kuribrong River properties are located in the second most important historic diamond and gold producing area in Guyana, with diamond production dating from the early 1900's. This region is also having a present "diamond rush", mostly by Brazilian miners, though Vannessa Ventures Ltd. has recently reported significant resources in the region (Vannessa Ventures website, 15-June-05.)

Location and Access
Good road access is available to the region. Charter air access is also available from Georgetown to the vicinity of the Company's properties. (See Figure 2)

Figure 2 (345 Kb PDF)

Historic and Current Geological Activities
Work began in the area in and around the Kuribrong River with river traverses in 1875. Throughout the late 1920's and 1930's numerous investigations were made by Connolly, Bracewell, Grantham and Williams. These studies focused on surficial deposits and prospecting for alluvial deposits of gold and diamonds, but their maps also showed significant bedrock classification, and were the first to record the stratification that has remained in use today. Reports detailed a geographic relationship of bedrock lithology to topography, surficial deposits and alluvial mineralization. Several studies in the 1960's occurred primarily in the vicinity of old mining areas. On a more regional scale, J.H. Bateson and M.G. Allderidge (1961) reported on the geology of the area bounded by the Mazaruni, Kaburi, Waiamu, Hubana, and Kuribrong Rivers. J.W. Carter and R.H. Hewins (1963) published a preliminary report on the geology of the Eldorado Mine, which included some mapping in the southeast corner of the project area. Regional Geology and Exploration Potential Generally, the geology of this area is very similar to that seen in other parts of the greenstone belts of Guyana, with the oldest rocks consisting of the Lower Proterozoic Mazaruni Supergroup, intruded by Younger Granites. These rocks are uncomformably overlain by Roraima Formation sandstones and conglomerates. These units are intruded by younger basic rocks. The only unit that is not clearly discussed by previous authors includes the smaller granitic stocks. These stocks were mapped by Gibbs, et. al., (1971), but were not distinguished from the younger granites. The Mazaruni Supergroup has many of the characteristics of an island arc succession, with marine mafic to felsic meta-volcanics, interstratified tuffaceous and exhalative sediments, overlain by tuffaceous graywackes and pelitic sediments. Based upon historic and current production and recent success reported by Vannessa Ventures Ltd., the Company believes that its Potaro-Kuribrong regional block holdings hold reasonable potential for alluvial diamonds and/or alluvial and primary gold deposits.

Mahdia – Issano Regional Block

Introduction
The Mahdia – Issano regional block is also located in a very important gold and diamond field in Guyana. Gold and diamond production in this area dates from the late 1800's. Numerous small scale operations have produced alluvial diamonds and both primary and alluvial gold from this area since that time. Among the most important alluvial gold and diamond producing areas are the Mahdia and Minehaha Rivers, where bucket wheel dredges worked between 1903 and 1958. Golden Star Resources explored the Proto-Mahdia alluvial deposit between 1987 and 1992, and reported a resource of approximately 67,000 ounces of alluvial gold. Several primary gold occurrences have also been reported in this region, consisting mostly of high-grade quartz veins and associated hydrothermal alteration zones. Omai Gold Mines has reported a 4 Mt @ 1.4 g/t gold resource at its Eagle Mountain project, located near the Company's Mahdia – Issano regional block. Location and Access The Mahdia region is accessible by all-weather road from Georgetown, taking approximately eight hours. Branch roads lead to the different gold operations in the region. (See Figure 3)

Figure 3 (488 Kb PDF)

History
The Potaro/Mahdia Goldfield has produced over 1 million ounces of gold since its discovery in 1884, mainly from alluvial workings. By 1920 virtually every creek had been prospected and alluvial gold was worked from many river systems.

The Guiana Gold Company operated a dredge in the Konawaruk River from 1907 to 1927 and the Minnehaha Development Company operated a dredge in the Minnehaha and Mahdia Rivers from 1903 to 1936 producing 91,000 and 86,000 ounces of gold respectively. From 1937 the British Guiana Consolidated Gold Company succeeded the Minnehaha Development Company and produced an average of 9,000 ounces a year until ceasing operations in 1958 . McDame Exploration Ltd. investigated alluvial gold in Mahdia in 1975-1976. Work done included Banka drilling and pitting of the headwaters of the Mahdia and Proto-Mahdia Channels. Golden Star Resources Ltd. undertook an extensive evaluation of both the bedrock and alluvial potential of the Mahdia area between 1987 and 1994. The Golden Star exploration permit area, when relinquished, was divided up into small scale mining license areas, many of which are now being actively worked. The Company's Mahdia – Issano regional block includes 82 of these small scale claims with a total area of 13.6 sq mi. In the period from 1970 to 1972, GGMC drilled 17 core holes in the Dickman Hill, Minnehaha and Mile 19 areas primarily to investigate molybdenum mineralization. This core was re-examined in 1988 by Golden Star Resources.

Small scale intermittent hydraulic placer mining of the Dickman Hill area by the GGMC commenced in March 1980, and was halted at the end of November 1982 (Edwards et al, 1983). Mechanical mining using bulldozers started in 1984, and continued until August 1987, when operations ceased (GGMC Annual Report 1987). Production was limited. Gold and Diamond Potential Sacre-Coeur's Mahdia - Issano properties are located either within or in the vicinity of the Proto-Mahdia channel. The Company considers these properties to have good potential for the discovery of alluvial gold and diamond deposits, as well as primary gold potential in bedrock.

Guyana Map

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