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What Randsburg calls the Victory Strike was first discovered by the famous WW II Canadian Ace Donald MacFadyen who also pioneered in the use of geomagnetic equipment for finding mineral deposits and discovered the Araxa niobium mine in Brazil, one of the most valuable mines ever discovered. His partner in the Victory discovery was Ron Turner, a South African with 43 years in the mining business with extensive experience in diamond mining. The project is 100% owned by Randsburg's Brazilian subsidiary, DIADEM MINERAÇÃO LTDA which in turn is 85% owned by Randsburg and 15% owned by MacFadyen and Turner who also acts as the project manager.
The MacFadyen/Turner team knew about the famous diamond producing area located on the Verissimo River and its tributaries which has a 100 year history of diamond production by local garimpeiro miners including a world class 600 carat diamond in 1906, one of the largest diamonds ever discovered. They wanted to locate the kimberlite pipes which originally fed the paleo-channel gravels containing the diamonds being mined by the garimpeiros.
Turner/MacFadyen entered into a joint venture with Randsburg in 2003 and last year Randsburg flew a detailed aeromagnetic survey which defined over 70 targets. The airborne survey led Randsburg to increase the size of their land position to about 525 square kilometers.
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15 of 30 magnetic targets have been sampled by trenching or auger drilling and have returned microdiamonds. Randsburg has diamonds, thousands of diamonds. But they are tiny. Now they are in the process of trying to identify just which kimberlite pipes have produced the larger macrodiamonds in eons past.
In 2005, seven
macrodiamonds were recovered by auger drilling. These seven macrodiamonds
with carat weights of 2.08, 1.79, 1.28, 0.95, 0.85, 0.47, and
0.05 totaling 7.46 carats were recovered from 936 kilos of material
taken from 39 auger holes drilled between and adjacent to two
airborne targets numbered A44 and A45.
As of May, 2006 Randsburg has completed 27 diamond core drill
holes at Victory Strike with a total program of about 3875 meters.
Eight kimberlites have been identified to date of which three
are diamond-bearing at depth. Target A44 is one of the diamond-bearing
kimberlites. Further sampling is planned in the next month to
count macrodiamonds and determine which additional kimberlites
are diamond-bearing.
A 3.5 tonne per hour diamond plant has been constructed and is to be located near or on one of the diamond targets in the next few months.
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This was my first visit to any diamond property. Certainly, in Dr Ken Germundson and Ron Turner, Randsburg has two of the leading industry experts on diamonds. The airborne survey maps I saw showed a number of clearly defined kimberlite pipes and the drilling to date seems to show substantial progress in finding the diamond "motherlode." Randsburg has found the elusive macrodiamonds in auger drilling before. They know there are large, indeed, giant diamonds in the gravel beds worked by the garimpeiros historically. They are getting the indications of diamond bearing kimberlites and the next thing to do would be to conduct a much larger bulk sample once they have determined the source of the macrodiamonds.
And if I don't know much about diamond properties, I know even less about how diamond companies should be valued. But the shares shot up to $4.35 last August when Randsburg announced the discovery of the macrodiamonds and it has backed off more than 50%. The old adage of buy low and sell high has always worked for me. At current prices, RGZ is a whole lot closer to its low for the year than the high so it seems like a good bet to me.
Randsburg is an advertiser and paid my expenses to travel to Brazil. They have not in any way paid for this article but since I have a relationship with the company, of course I am biased and that should be kept in mind before buying or selling any shares. I do not own any shares of Randsburg, yet.
Randsburg International
Gold Corp
RGZ-V $2.08 Canadian (June 1, 2006)
RBGDF-OTCBB
18 million shares outstanding
Randsburg Intl website
Bob Moriarty
President: 321gold
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