Blina Diamond Project, Ellendale, Western Australia

Blina Diamond Project, WA: Location

Blina Diamond Project

Blina Terrace 5 Project Summary

  • The Blina Diamond Project in the Ellendale Region of Western Australia is 100% owned by POZ.

  • Four mining leases (two granted).

  • Two exploration leases (one granted) for 167.1 km2.

  • 40km strike of diamondiferous Terrace 5 alluvial gravels to target.

  • Historic bulk sampling which recovered fancy yellow diamonds for which the Ellendale Field is renowned.

  • POZ is targeting high grade, low tonnage alluvial deposits in bedrock trap sites using a new GPR technology.

  • Historic Mining Agreement secured with the Bunuba and Warrwa peoples.

Terrace 5
Terrace 5 channel diamonds are mainly derived from the erosion of the E9 pipe (previously mined by KDC).

Mount North
Mount North lamproite pipe: indicating surrounding level of erosion since emplacement

Blina Terrace 5 Target Diamonds


Some of the diamonds recovered from Terrace 5 on what is now POZ mining lease M04/467. All stones are heavier than 2 carats. A significant proportion of the larger diamonds are fancy yellows


Diamonds recovered from Terrace 5, Pit 82 (on what is now POZ ground). The 8.4 carat Fancy Yellow in the upper photo is also shown below right (different orientation)

   
Diamonds previously mined by KDC at Ellendale. The source of the POZ Terrace 5 alluvial diamonds is mainly from the erosion of the Ellendale E9 pipe, which previously produced 50% of the world’s supply of Fancy Yellow diamonds

The Target: Bonanza Diamond Trap Sites

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Gamechanger: Ground Penetrating Radar (GPR)

2017 New GPR Technology:
POZ Minerals Survey
2002 Old GPR Technology:
Previous Blina Survey
  • Breakthrough GPR survey indicates untested alluvial trap sites with the potential to host high grade or bonanza grade diamond deposits within the ancient gravels. Numerous high quality targets have been generated.

  • This latest GPR technology uses state of the art modern electronics to deliver a fast and inexpensive method to generate both bedrock and gravel diamond trap site targets.

  • Some of this recent GPR data correlates closely with historic pitting and exploration data observations of the prospective bedrock-cover contact, which indicates the modern GPR is calibrated and operating correctly

Terrace 5 GPR: New Technology – Old Ground

  • Previous trial mining in 2005/06 at Cuts 1 and 2 recovered 1,432 carats from 40,613 cubic metres of material at a grade of 3.53 carats per hundred cubic metres.

  • POZ has used the latest GPR technology to target bonanza grade trap sites in the shallowest parts of the same Terrace 5 geology and thus aims to greatly increase previous sample grades.

  • Cuts 1 and 2 occur in the western part of Terrace 5 which has ~4 to 8 metres of cover above the diamondiferous gravels. POZ will target the eastern part of Terrace 5 with only 1 to 5 metres of cover, this will have a significant impact on lowering mining costs.

  • ’98% of the diamonds can be in only 2% of the river. My job is to find the 2%.’ Jim Richards, POZ Minerals.


Results from previous sampling work at Cuts 1 and 2 indicate significant diamond mineralisation within the Terrace 5 channel

GPR Targets: Terrace 5 Central

GPR Targets: Pothole & Channel 2

  • When the GPR is run from a different direction over the same target (below), you get the same result

  • In the best areas, GPR data correlates closely with the original pitting data of the prospective bedrock contact, which indicates the modern GPR is calibrated and working correctly.

GPR Targets: Channels 1 & 2

Granted Mining Licenses and Bunuba Agreement

  • POZ has secured a full Mining Agreement with the Bunuba Dawangarri Aboriginal Corporation (‘Bunuba’), the Traditional Owners for the southern part of the Blina Diamond Project area.

  • This historic Mining Agreement has allowed the grant (on 13 October 2017) of Mining leases M04/466 and M04/467 which are the two key licenses at the heart of developing the Blina Diamond Project.

  • Terms of the agreement include employment and training, profit share, share options and an earthmoving contract

  • The northerly two mining lease applications (M04/464 and M04/465) fall within the Warrwa Combined Native Title Claim. Negotiations with the Warrwa group have also been successful and the grant of these two leases is imminent.

2018: Bulk Sampling and Trial Mining

  • 2018 Terrace 5 bulk sampling and trial mining operations will be similar to Blina Diamonds operations in 2005/06. The main difference is POZ will target the easterly areas which have shallower overburden and with the best GPR- generated alluvial trapsites.

  • Set up 50,000 tonnes per annum alluvial treatment plant close to sampling/trial mining operations.

  • Start systematic bulk sampling operations of priority targets.

  • Commence trial mining operations on best and most consistent grades.

  • Conduct diamond sales should commercial production be achieved.

Development and Operational Timeline

Current to April 2018

  • Produce a Terrace 5 diamond report on stone size distributions and valuations.

  • Generate a JORC Exploration Target for the Terrace 5 gravels.

  • Fauna and flora survey. This has already been commissioned and is underway.

  • Further GPR survey(s) for better alluvial trapsite target resolution.

  • Conduct a heritage clearance survey with Traditional Owners.

  • Liaison with other stakeholder and government groups - ongoing.

  • Permitting for bulk sampling and trial mining operations in 2018.

  • Hiring of personnel.

  • Establish security protocols and procedures for diamond handling.

May 2018 to December 2018

  • Set up a project camp with ablutions and other facilities.

  • Set up an alluvial treatment plant close to mining operations.

  • Start systematic bulk sampling operations of priority targets.

  • Commence trial mining operations on best and most consistent grades.

  • Conduct diamond sales.

Supporting information to this report is available on the POZ ASX Release dated 26 October 2017: