SUNRISE RESOURCES (LSE:SRES)

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Probable low diamond grade report sees Sunrise Resources plummet

Shares in Sunrise Resources (SRES) plunged almost 30% as it reported that the first kimberlite tested on its Cue diamond project in Western Australia had a probable low diamond grade.

Independent consultant Mineral Services Laboratories had carried out size distribution and grade modelling on microdiamond data for six samples of reverse circulation drill chip material obtained from the Cue 1 kimberlite and a single sample collected from its surface outcrop.

In addition, Mineral Services had processed a 10 kilogram sample of the Cue 1 kimberlite for recovery of kimberlite indicator minerals to determine the general diamond prospectivity of the Cue project area. Macrodiamond, defined as commercial-sized (+0.85mm) diamonds, grade modelling was carried out on combined drill sample results, individual drill samples and various sample groupings to evaluate variability in the sample results.

The results of modelling indicated that, while small diamonds were present in significant quantities, the diamond population was fine grained and macrodiamonds were likely to be scarce.

The modelled macrodiamond grade for all sample groups was less than two carats per hundred tonnes.

Analyst view

Analysts at FoxDavies called the results "disappointing", but also noted: "The results for this body do not downgrade the overall prospectivity of the property. Informed commentators will appreciate the significance of the Mantle MapperTM information which suggests that there is potential for other kimberlites occurring in the same area to contain significant quantities of diamond.

"It is still early days in their exploration programme and new kimberlite occurrences continue to be found."