Namakwa Diamonds

The clusters of properties that constitute the Northern Node, comprising portions of the Holpan, Panfontein, Mimosa and Nooitgedacht farms and representing future alluvial diamond opportunities for Namakwa are situated approximately 5km south east of Schweizer-Reneke. Namakwa's operations in the Northern Node comprise prospecting and development opportunities for alluvial diamonds.

The clusters of properties that constitute the Western Node, comprising portions of the Houtvolop and Wildgooselodge farms, represent future alluvial diamond opportunities for Namakwa. These properties are situated approximately 22km south of Schweizer-Reneke.

The North Eastern Node is situated on a portion of the Kameelbult farm approximately 25km northwest of Wolmaransstad, within the Wolmaransstad Magisterial District and which presents future alluvial mining opportunities for Namakwa. The North Eastern Node is located on the Bamboesspruit gravel run, which is associated with the ephemeral river of the same name. Geological surveys have demonstrated that within the Kameelbult farm itself there are numerous types of diamond bearing alluvial gravel deposits with different ages and sources.

Pypklip is an alluvial diamond project situated approximately 25km north east of the town of Lichtenburg in the North West Province of South Africa, on the farm Pypklip 532 JP. The farm is subdivided into 72 portions and Namakwa has applied for a new order prospecting right for portion 4 of the farm, which covers approximately 407Ha through Namakwa Diamond Mining North West (Pty) Limited.

The Pypklip site lies within an area known as the "Welverdiend-Ruigtelaagte-Grasfontein run" and geological surveys have demonstrated a presence of both Rooikoppie gravel and gravels occurring beneath sand and collating in depressions outside of the major runs.

The Albetros Project is an alluvial diamond project situated over three farms covering approximately 7,600Ha and affords the Namakwa Group the opportunity for development and growth. The centre of the Albetros Project area is situated approximately 15km north-northeast of Kleinsee and lies adjacent to the Namaqualand mines of De Beers' west coast diamond mining operations in the Namaqualand Magisterial District of the Northern Cape Province.

The Albetros Project is one of the only remaining tracts of prime alluvial diamond land in Namaqualand available for final stage prospecting and mining development. The discovery of a 90km long fluvial palaeochannel called the Megalodon Channel in 2002, by De Beers, has created an increased potential for the region for further deposits. The sites that constitute the Albetros Project, straddle a 3.3km long section of the Megalodon Channel.

The Namaqualand Farms are constituted by farmland which flank the Albetros Project, to the north of the Buffels River, towards the centre of the Megalodon Channel and in the south of the region near Hondeklip Bay. Namakwa's rights to this area are held through new order prospecting rights granted to Namakwa Diamond Mining South Africa (Pty) Limited (NDMSA) in June 2007. The Directors believe that the rights obtained over the Namaqualand Farms will allow Namakwa the opportunity to explore and take advantage of any diamond deposits that may lie beyond the Albetros Project area, with a view to enhancing the growth potential of Namakwa in the region.

South Africa's diamond production is derived from the open-pit and underground mining of kimberlites and other allied volcanic rock types in the form of pipes, blows and fissures and from the bulk mining of alluvial gravels on land and in shallow marine environments. Alluvial diamonds are the product of erosion and weathering of primary kimberlite sources and their subsequent redistribution by fluvial and marine processes. Resources of diamond-bearing alluvial gravels have accumulated over a long period of time in the major river systems that drain the interior of the southern African sub-continent. The most prominent of these are the ancient systems of the Harts, Vaal and Orange Rivers, particularly where these meet in the vicinity of the city of Kimberley.

Within these systems, diamond-bearing gravels occur mainly in palaeochannels and in erosional remnants of former river courses, now represented by abandoned channels and terraces elevated above the migrating river courses. The bedrock surfaces across which ancient rivers flowed and upon which the diamond-bearing gravels were deposited differ with varying geology.

All the farms in the North West Province area in which Namakwa is interested in mining or prospecting, have been either pitted or drilled or both. Generally, where these exploration pits were excavated, the Rooikoppie gravels preserved on the higher terraces display a well-developed undulating footwall contact. The Directors believe that these features provide potential for well developed trap-sites and in some areas these sites have already been exploited.