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African Queen shifts to gems
2009-01-06 16:32 ET - Street Wire
by Will Purcell
Irwin Olian's African Queen Mines Ltd. is planning to drill targets in northwestern Botswana. Mr. Olian had gold in mind when he took the company public in October, but last month African Queen decided to quit a gold hunt in Mozambique. The company has three other gold plays in the region but they are getting a critical look as well. Mr. Olian now touts African Queen's gem hunts as the company's focus through the opening months of 2009.
The plan
African Queen's most advanced property is the 260,000-hectare Okavango block, which lies in northernmost Botswana, adjoining the narrow strip of land thrusting eastward from the main portion of Namibia. (The phallic-like appendage of Namibia, called the Caprivi strip, originated in the colonial days when the Germans owned Namibia and negotiated access to the Zambezi River from the British.) African Queen also holds the Tsau block, which runs along Namibia's eastern border, about 200 kilometres southwest of Okavango.
African Queen completed a sampling program over the Okavango property last year and found arrays of indicator minerals, including the usually promotable G-10 garnets that suggest a diamondiferous source. Those peridotitic garnets, and a good assortment of eclogitic grains are a key reason for Mr. Olian's shift to gems from gold.
African Queen is now preparing to drill a series of geophysical targets that have the added support of the recently discovered grains. The company plans to start drilling within two months, once it gets its people and supplies in place. Targets are plentiful in the area, and the scale of the program will be set by the economy, not geology.
Fortunately, African Queen is in a better position than most of its rivals.
The company started November with over $2-million in cash and working capital of $1.8-million. Although it has not sold any more shares since then, African Queen recently granted options for 2.58 million shares that are exercisable at 15 cents over three years and could add $400,000 more to the company's treasury.
The plan for Okavango carried a $500,000 budget, but at that time, African Queen's consultants were contemplating a 20-hole program of reverse circulation drilling. The company now thinks it will conduct core drilling on its targets, which would carry a higher cost.
The Okavango property lies on the fringe of the Kalahari desert and some of the targets are beneath up to 100 metres of sand, although some lie much closer to the surface. The area gets enough rainfall to support grasslands and frequent clumps of trees and although most of the rain falls from October through February, not enough falls to make work impossible.
The encouragement
The area is clearly kimberlite country, although diamonds have been tough to find. The Nxau Nxau kimberlite cluster lies about 100 kilometres southwest of Okavango and a similar distance northeast of Tsau. Over 20 kimberlite pipes were found in the cluster but they were generally barren, leaving earlier explorers without an explanation for the encouraging mineral chemistry found in the region.
As a result, the search is spreading farther afield. De Beers acquired ground in Botswana that surrounds much of the Okavango property. It also holds ground bordering Okavango along the Caprivi strip, through Namdeb, a joint venture with the Namibian government.
Tsodilo Resources Ltd. also thinks highly of the area straddling the border between Namibia and Botswana. It continues to seek the source of encouraging mineral grains found in northeastern Namibia. Although diamonds are still tough to find in the area, both Namibia and Botswana are prolific sources of gems, which will keep the hunt going indefinitely.
African Queen gained three cents to close at 25 cents Monday on 9,800 shares.
Please contact Lee Dunston for more information at: + (803) 787-1532 or contact our head office at + (604) 899-0100
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