Namibia Overview

DIAMONDS - NAMIBIA

The ground in Namibia has been acquired in order to investigate a group of bulls-eye magnetic and photo features, closely comparable to those typical of kimberlite clusters that straddle the Namibian-Botswana border. The new Namibian licence forms a logical extension of the Botswana project now underway. The Company’s Namibian and Botswana licences are proximal to a major unexplained surface concentration of kimberlitic minerals in the vicinity of the village of Tsumkwe in northeast Namibia. These kimberlitic minerals include diamonds and G10 garnets, both indicative of derivation from a diamond-bearing source.

Namibian Kimberlite Project

The Namibian Kimberlite Project consists of a block of seven contiguous Exploration Prospecting Licences (EPL’s 3881-3887), with a combined area of approximately 6,268 square km, adjacent to the Botswana-Namibia border in eastern Namibia. See Figure 1 for the property location. It is a grassroots kimberlite exploration project being managed by Dr. Andy Moore, P.Geol., who oversees the Company’s diamond exploration program together with Mr. Peter Siegfried, P.Geol.

The licences were awarded by the Ministry of Mines and Energy to PAM Namibia (Pty) Ltd., a wholly-owned subsidiary of the Company, for an initial period of three years, expiring on December 20, 2010. On expiry, application may be made to renew 75% of the combined area of the licences for a two-year period. Thereafter, application can be made to renew 50% of the retained ground (i.e., 37.5% of the original property area) for a further two year period (thus creating a total tenure of 7seven years). At the end of the seven year tenure, application may be made for part of the area, if so identified, to be converted into a Mineral Deposit Retention Licence (MDRL) or Mining Licence, or the ground relinquished.

The area covered by the Namibian licenses is contiguous to the Tsau Kimberlite Project (above) and conditions are very similar. It is a flat plain at an average altitude close to 1000 m, covered by Kalahari sand varying in hickness from approximately 0-100m. Vegetation is open woodland and grassland savanna. The climate is semi-arid, with an average annual rainfall of approximately 20 inches, falling mainly in the summer months (October - March). Access into the Property is via tarmac and secondary roads, some 500 km from Windhoek, capital of Namibia and the nearest large town. Travel within the property is by sandy tracks or cross country traverses using 4x4 vehicles. There are several small villages within the license area.