Juina's Tropical Diamonds

March 1999

Diamonds:News

Juina's Tropical Diamonds

Diamonds nestled deep in the Brazilian Mato Grosso promise abundance and color

After a century of fits and starts, Brazil is muscling in on organized diamond mining again. A source deep in the jungles of the state of Mato Grosso, once a De Beers concession, is producing marketable quantities of colorless diamonds as well as pinks, reds, browns and a few blues.

Steve Issod and Airton "Tito" Reis founded the project. Then Juina Mining Corp. was formed as a public company in Reno, NV, to mine the site. Noel Frenzell was hired as president, and Issod remains a consultant.

Mining began in January on a 2,471-acre site in Mato Grosso's Airpuana Juina Province. Called "Property 1,000," the site is part of the Guaporé Shield of the Amazonico Craton, a geologic feature conducive to the formation of diamond-bearing kimberlites. JMC projects potential reserves valued up to $200 million. Annual production is expected to reach 720,000 carats this year and 3 million carats when the mine is fully operational.

One test in July 1998 yielded an ore sample with 94 diamonds ranging from 0.50 to 5.23 carats and totaling 112.4 carats. At last year's end, Issod broke down the material: 10%-12% is bort (low-quality diamonds not used in jewelry), 60% is near gem and 20%-25% is gem quality. Five percent is larger diamonds (some over 20 carats) and some fancy colors.

Who will market the diamonds in the long-term wasn't decided at press time. "We want to make sure manufacturers and dealers are assured of profits so they will remain as customers," says Issod. Meanwhile, JMC will distribute through Indian, Israeli and Antwerp brokers on a commission basis.

Past and Future
Diamonds were discovered in Brazil in 1727. The country quickly became the world's largest diamond exporter until diamonds were discovered in South Africa in the 1870s.

In this century, Brazil's production became sporadic, mostly because of lack of control at the mines and political uncertainty.

In the 1970s, De Beers, through MineraVao Itapena S.A. of Brazil, bought the mineral and mining rights to what is now the JMC property and others. That effort was hampered by a corrupt Brazilian economic structure and a flood of unruly independent miners, called garimpeiros.De Beers pulled out in 1986.

Today, Brazil is the sixth-largest diamond producer, though exact figures are hard to come by – official exports don't account for local consumption and smuggling. Of the estimated 1.5 million carats of Brazilian diamonds on world markets since 1983, garimpeirosuncovered several large ones, including a 280-ct. diamond in 1987 and a 452-ct. diamond in 1994, as well as fancy colored diamonds.

In recent years, Brazilian mining codes, government control and the investment climate have improved. Issod says chief geologists from other unnamed mining companies have expressed interest in the region.

– by Robert Weldon, G.G.



Copyright © 1999 by Bond Communications.


 

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