North Australian Diamonds Limited

Borroloola

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Ten kilometres south of the township of Borroloola lays one of North Australian Diamonds' most exciting prospects. The Borroloola tenements cover an area of approximately 1,150sq km, located some 100km north of the Merlin kimberlite field and are comprised of two granted exploration licences.

Located at the first major energy inflection point, where the MacArthur River hinterland drainage meets the coastal plain, it is the only major alluvial concentration at a low point in a catchment that is known to host significant diamond deposits. The Company believes that any diamonds eroded from the kimberlites within the catchment area may be deposited within the gravels located here, and thus the prospect represents a significant and unique opportunity to explore for a large volume, high value, alluvial diamonds deposit.

Alluvial gravels, which the area is known to host, drain through the MacArthur River, deriving material from the catchment that contains the Merlin kimberlite field (14 diamondiferous kimberlites) and the Abner Range (diamondiferous kimberlite and breccia pipe). Numerous other diamond indicator minerals and microdiamonds have been found across the catchment area which are not related to the known pipes at Merlin and Abner, indicating that undiscovered kimberlite pipes exist in the area and also drain through the MacArthur River towards the Borroloola Alluvial Diamond Project area. There is an elevation differential of 200m between Merlin and the coastal plain.

An application was lodged in 2004 for an area of 289 blocks (approximately 137,000 acres). The Northern Land Council's Full Council has ratified the Borroloola traditional owners' decision to consent to the grant of the licence. On August 29, 2011 Exploration Licence 24512 was granted to the Company for a period of six years. This tenement has been in application for over 7 years making the recent grant a very significant milestone for North Australian Diamonds.

In 2006 the Company drilled fifteen large diameter holes within EL24082, which is directly to the south of recently granted EL24512 and also forms part of the alluvial project area. Up to 6 metre thick gravels were intersected at 15 metres depth, and although gravel recovery was poor due to drilling difficulties, 6 diamonds were recovered. These results, combined with the knowledge that all the known and as yet undiscovered diamond bearing kimberlite pipes within the MacArthur River catchment drain into the project area, indicate that there is significant potential for the discovery of an alluvial diamond deposit close to surface at EL24512.

Since the 2006 drilling program the Company has mapped outcropping gravels at surface in an area covering 5sq km. However, the total area, which could potentially host alluvial gravel deposits and is yet to be explored on the Company's tenements, is in the order of 300sq km. This significantly increases the opportunity to identify a large volume, high value alluvial diamond deposit.

A seven week program to recover up to 5,000 tonnes of gravel commenced in September 2011. By December 2011, the Company had extracted 5,000 tonnes of alluvial material from 5 different areas and processed 3,000 tonnes at the Merlin Mine Plant. The purpose of the tests were to commence the assessment of the economic potential of the gravels by determining diamond quality, quantity and distribution in the alluvial material.

The current bulk sampling program focused on an area of outcropping gravel. Material from three its has been processed at the Merlin Mine, yielding 22 stones with a total weight of 1.09 carats. Thirteen of the recovered diamonds are white in colour including the largest two at 0.19 and 0.25 carats. Full details of recovered stones are shown in the below table.

Borroloola Bulk Sample Table
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Further assessment of stone quality will be conducted once gravel from the remaining two pits is processed. The remaining material is stockpiled awaiting transport to the Merlin Mine at the conclusion of the wet season. The size and spatial distribution of the recovered stones provides evidence that Borroloola alluvial diamond size and grade correlates with measurable factors such as gravel bed thickness and location in the paleo-stream bed. The chart below shows the relationship between gravel bed thickness and diamond size for the three samples processed in 2011. From the limited data gathered to date there appears to be a relationship between the depositional environment and the recovered diamond grade. If subsequent diamond recoveries conform to this relationship, then targeting zones of potentially higher grades and large stones will be possible. 

Borroloola Alluvial Diamond Recovery Chart
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Alluvial deposition requires changes in water flow or bedrock topography to trap and sort particles of different sizes and densities. To assist in mapping out target areas likely to have formed traps of larger stones and higher grades, the Company is planning an exploration program to better understand the subsurface characteristics of the alluvial gravels.

The Company believes that the Borroloola gravels were deposited in a braided stream environment and the exploration program will be aimed at defining the bedrock topography, gravel and overburden thickness to guide the design of future bulk sampling programs. 

Bulk Sampling at Borroloola
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Depth profile of Borroloola sample pit 1 excavated in 2011
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• 1 May 2012 Quarterly Activities Report for the period ended 31 March 2012 > Read more

• 27 April 2012 Sale of Diamonds > Read more

• 15 March 2012 Report for the Half-Year ended 31 December 2011 > Read more

• 7 February 2012 Appendix 3B - Issue of Shares > Read more

• 31 January 2012 Quarterly Activities Report for the period ended 31 December 2011 > Read more

• 25 January 2012 Appendix 3B - Issue of Shares > Read more

• 16 December 2011 Appendix 3X - Dr D S Tyrwhitt > Read more

• 16 December 2011 Appointment of Dr David Tyrwhitt as a Director > Read more

• 25 November 2011 Annual General Meeting November 2011 > Read more

• 25 November 2011 Results of Annual General Meeting 2011 > Read more