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Location: Lunda Norte Province, far north eastern Angola
Project Areas: Cabuaquece, Cale, Cachoque, Cassanguidi South
Licence Type: Mining
Development Status: Pilot Mining
Operator: Sub Sahara (Under guidance of PDF)
Licence Area: 112.50 km²
Licence Expiry Date: When reserves are depleted

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Tenure | Infrastructure | Local Geology | Diamond Production

Cassanguidi is an advanced project in the pilot mining phase. The rights to exploit this project are held by Marsanto-Pesca e Sua Industrializacao i Exportacao Lda (“Marsanto”). It is currently extracting diamondiferous gravels on a pilot mining basis from river terraces and hill-wash deposits using conventional open pit methods and river bed gravels by pumping from a raft.

The Cassanguidi Project is situated approximately 80km east of Dundo and 30km north of Nzaji in Lunda Norte Province. The licence area, within which the project is located, is transected by the perennial northward flowing Luembe River. It lies within 2 km of the Cassanguidi township. Access to the project from both Dundo and Nzaji is via narrow tarred roads with potholes.

Access to Nzaji from Luanda is via flights three times a week by cargo plane (Ilyushin 18E). The plane is also equipped to carry passengers. The airstrip, although gravel, is in excellent condition. Dundo can be reached by four commercial flights per week. Alternatively, the area can by reached by road from Luanda, a distance of approximately 1,600km. The road condition is very poor.

Marsanto holds the mining licence over the area. The licence, in the form of an operating contract with Endiama, was signed under the PROESDA system in 1997. This system allows Angolan companies, where permitted, to explore and mine a concession free of any kind of equity participation obligation.

Marsanto entered into a contracting agreement with Luembe Mining (Pty) Ltd (“Luembe”) in terms of which Luembe provides capital and technical expertise to Marsanto in return for an agreed percentage of the net profits so derived. Luembe, in turn, assigned its rights and obligations in terms of this agreement to Sub Sahara Investimentos e Consultoria Lda (“Sub Sahara”), an Angolan registered company. Efidium has a 50% shareholding in Sub Sahara and is in negotiations with the other shareholders to increase this stake. According to the operating contract with Endiama, the licensee is required to ensure the following with respect to the mining operation:-

• opportunity for the professional training of workers to ensure the gradual replacement of foreign experts with Angolan nationals;
• preference to Angolan workers and service companies, based upon their competence;
• industrial security with particular reference to the protection and safe-keeping of the diamonds;
• the most efficient exploitation of the resources and prevention of selective mining of high grade areas only;
• the necessary precautions to avoid negative effects on the environment;
• unrestricted access to the property for agents of Endiama and the Ministry of Geology and Mines; and
• keep detailed records of all production and accounting activities.

Endiama is required to provide all available geological and mineralogical information pertaining to the licence area, as well as information on any demarcated mining reserves or ore blocks.

Accommodation, Offices and Plant
An exploration camp comprising tents, buildings and modified containers has been established. These are used as accommodation, ablution, mess facilities and offices. A large number of the employees live in the nearby Cassanguidi township, which is within walking distance of the project. The pan plant and recovery plants are located close to the current exploration areas and the camp. The company also has a country office in Luanda.

Water
Water is readily available for both the plant and the camp from the Cassanguidi River. Water is purified for domestic use. Bottled water is supplied for drinking.

Power
Although Dundo generates hydro-electric power and the associated power line passes within approximately 2km of the edge of the licence area, the project supplies its own power using a generator. Diesel and petrol are readily available in Dundo and Nzaji.

Security
A significant security contingent is employed at the project as well as in the Luanda office. Security is responsible for the following:-
• patrols of the concession area to ensure that no artisnals or other unauthorised parties are present;
• monitoring of the pans in the plant;
• monitoring the final recovery grease tables, and holding one of two keys for the container in which the tables are secured;
• monitoring the sort house, and holding one of two keys for the container in which the sort house is located;
• holding one of the keys to the safe in which the diamonds are stored on site. Signing diamonds into the safe on a daily basis;
• monitoring the acid wash process; and
• escorting the diamonds during transport on site and to Luanda.

The basement, where exposed, comprises strongly weathered granite, represented by coarse angular fragments of quartz, set in a structureless matrix of red clay. Weathering extends to a depth of several metres. Enclaves of weathered amphibolite, representing xenoliths of greenstone lithologies, are seen in the trenches, and a large remnant of greenstone has been mapped. Although the Calonda and grés polymorphe are expected to be present in the concession, they are not exposed. Other than in the river valleys, the concession is covered an overburden of Kalahari sand.

Colinas
The primary exploration target in the Cassanguidi concession is currently colina deposits, and these are seen in all the prospecting trenches visited.

The colina package typically comprises the lower unit, with pebbles and cobbles derived from the Calonda, overlain by grés cascalho and the upper unit, derived from the grés polymorphe. As seen in the trenches adjacent to the camp, the package is variable in thickness, from about 0.6m to a maximum of about 1.4m. In the trenches in the vicinity of the plant, the package comprises mixed upper and lower units, is generally thinner, and may be reduced to a narrow zone of scattered small pebbles resting on weathered bedrock. Despite the poor development of the colina here, the horizon is diamondiferous, with high grades. The colina deposits are overlain by somewhat clayey Kalahari sand, and appear to be pre-Kalahari in age.

Terraces
Lower terraces have been extensively worked, but the workings are now partially collapsed, and in-situ gravels were not seen. Spoil heaps indicate that the terrace comprises a well-rounded and well-sorted gravel of quartz, quartzite and chert pebbles and cobbles, together with clasts of Proterozoic conglomerate, altered volcanic and ultramafic rocks and bedded cherts.

Lezirias
The lezirias or flood plain deposits seen at Cassanguidi comprise lenticular mounds of well-rounded and well-sorted small to medium pebbled gravels overlain by grey organic-rich silt, typical of a braided stream environment. The deposits have been a major target for artisnal activity.

Present River Bed
Little can be said about the overall make-up of the river bed gravels as they are submerged. The pumped fraction (-25mm + 1.6mm) however, appears to be very similar to the flood plain gravel, as would be expected.

Pilot Mining operations have been generating 3000 – 4000 carats per month during the course of 2007.

Improvements in marketing arrangements with state-run Sodiam have been encouraging during the latter part of 2007 and PDF is confident that through appropriate marketing strategies, market-related prices for sale parcels can be achieved going forward.

Opportunities for expanding the operation to full scale commercial operations are being investigated in parallel with discussions on raising the companies stake in this operation.