African Queen Mines– two diamond geezers on board

10th Nov 2008, 12:00 am by Harry Norman On June 27th, Asia Thai Mining acquired all of the Madagascan assets of TSX Venture Exchange-listed Pan African Mining, for US$4.50 per share. Prior to the completion of the acquisition, all the non-Madagascan assets, and $2,500,000, were vested in a new company and the shares were distributed to Pan African shareholders. This new company is called “African Queen” and, since 16th October, has traded on the TSX Venture Exchange under the symbol ‘AQ’. So let’s have a look at those non-Madagascan assets!

Dr Andrew Moore joins the board as Vice President of Diamond Exploration and Senior Geologist. He has a reputation for his successful interpretations of kimberlitic indicator mineral anomalies in the Kalahari Desert areas of Botswana and Namibia.

Edward Schiller continues as a director and Senior Geological Consultant, focussed on diamond and gemstone programmes. He is a former director of Dia Met Minerals, and supervised the drilling at Pointe Lake - the first diamond-bearing kimberlite pipe to be discovered in Canada.

Ms Limor Rubin, Gregory Sparks, Edward Schiller and Irwin Olian continue as directors of African Queen. Limor Rubin remains Financial Officer and a director. Gregory Sparks, a registered professional engineer, formerly Vice President of Echo Bay Mines, continues as a director.

Irwin Olian, CEO, was founder, CEO and Chairman of Pan African Mining. Having graduated in economics at Princeton, and law at Harvard Law School, he worked in general business and corporate finance, including a spell as Vice President of Bear Stearns. He co-founded, and was principal shareholder of, North American Scientific (NASDAQ: NASM) a Los Angeles-based manufacturer of radioisotope products for the medical industry. He is also Chief Executive, President, and Chairman of the Board of Sacre-Coeur Minerals, a gold exploration company focused on Guyana - Rubin, Sparks and Schiller also serve on the board of Sacre-Coeur.

Did you notice that? Two diamond geezers on the board! Way back in April, Irwin Olian indicated that the top priority of the new company would be diamond exploration in the Botswana-Namibia border region.

The company’s Okavango prospecting licence is on the western end of the northern Botswana border and covers 2630 square kilometres. Here, reprocessed geo-physics data, generated by an independent contractor, has helped the company identify 113 possible targets. Further geophysical and sampling results from current exploration will provide the basis for identifying targets for drilling, which is planned for later in 2008. Drs Margaret McFarlane and Frank Eckhardt of the University of Cape Town have also been commissioned to develop criteria for identifying kimberlites on the basis of their surface expressions. Both have published numerous scientific papers on landforms of northwest Botswana and are internationally recognised geomorphologists. They will be supervised by African Queen director Andrew Moore – whose PhD is from the University of Cape Town.

At the Okavango prospecting licence, African Queen’s neighbours include Tsodilo Resources (TSX-V: TSD) and companies that are part of the De Beers group (a private company). Interest in this area of Botswana has been stimulated by the idea that the Congo craton, which hosts important commercial diamond deposits, extends into northwest Botswana.

African Queen’s Namibian exploration licences, and its Tsau diamond exploration licences in Botswana, are located near the site of a substantial surface find of diamonds and G10 garnets, which are presumed to have originated from an unknown diamond bearing source. The licences in Namibia were acquired in order to investigate a group of bulls-eye magnetic and photo features, comparable to the kimberlite clusters that straddle the east Namibian-west Botswana border.

The company’s Tsau Kimberlite Project consists of three neighbouring prospecting licences covering 2,890 square kilometres in northwestern Botswana. The Namibian Kimberlite Project consists of a block of seven adjacent exploration prospecting licences, covering 6,268 square kilometres in eastern Namibia, adjacent to the Botswana-Namibia border and contiguous to the Tsau Kimberlite Project. They are located on a flat plain covered by Kalahari sand, varying in thickness up to 100 metres.

The Botswana licences are issued initially for three years, when application may be submitted for 50% of the original area for two years, thereafter; application can be made to renew 25% of the original property area for a further two years. At the end of this period application may be made for mining leases, or the ground relinquished. The Namibian licences are issued for an initial period of three years, when application may be submitted to renew 75% of the original area for two years, thereafter; application can be made to renew 37.5% of the original property area for a further two year period. At the end of this period application may be made for part of the area to be converted into a Mineral Deposit Retention Licence or Mining Licence, or the ground relinquished.

Botswana is a successful democracy: economic growth averaged over 9% per year from the country’s independence in1966 through to 1999. This impressive economic track record was based on using revenue generated from diamond mining to fuel economic development - Botswana being the world’s leading producer of gem diamonds. Debswana’s Jwaneng, the world's largest and richest diamond mine, is in Botswana. Debswana is the largest diamond mining company operating in Botswana, and is a 50/50 joint venture between De Beers and the government of Botswana, generating about half of all government revenues. Namibia is also a successful African democracy; with mining and manufacturing representing 8% of its GDP. Namibia is the world's fifth largest producer of uranium, and rich alluvial diamond deposits make the county a primary source for gem-quality diamonds.

African Queen also has a set of joint venture gold projects in Mozambique which, since 1990 has been a multi-party democracy. Mozambique’s mining law was revised in 2002 and security of tenure was guaranteed. The mining ministry encourages exploration and the licensing system was updated in 2004. Mozambique also allows companies to repatriate profits, and the government takes no direct stake in mining projects. Mozambique also enjoys the, so far, unique distinction of being the only country to join the Commonwealth that was never part of the British Empire.

African Queen has earned a 51% interest in two joint ventures with Manica Minerals (a private company) for the exploration, development and exploitation of the historic Cazula gold project and Fingoe grass roots gold project. With each project African Queen has the right to earn up to 85% interest, by funding them through to the pre-feasibility stage. Still in Mozambique, the company has a joint venture agreement with African Eagle Resources (AIM: AFE) for the exploration, development and exploitation of five of African Eagle’s gold prospecting licences, which cover about 900 square kilometres in the Fingoe area. African Queen has already earned the right to acquire African Eagle’s licenses outright for a net smelter royalty of 2%, reducible to 1% for a payment of US$2,000,000.

African Queen also has a joint venture agreement with Bobcat Mining for the Braganza Gold Properties in Mozambique: to explore and develop the historic Braganza Mine, situated on the Mutare-Penhalonga Greenstone Belt. The project comprises a single exploration license of about six square kilometres, which includes the historic Diaz Pereirra, Damp, Richmond and Marianas mine sites.
The company can earn up to a 75% interest in the property by funding development in stages. A 1000 metre scout-drilling programme is planned for the 2008 dry season with the intention of identify drill targets for a 3000 metre core drill programme.

So there you are - a fine set of non-Madagascan assets! Diamond prospects in Namibia and Botswana, and gold prospects in Mozambique; I wonder if I will be writing an article about the acquisition of the company’s Namibian, Botswanan or Mozambique assets in a few years time!