Target Suspends Diamond Operations in Sierra Leone to Mine Gold

Posted in News by Admin on March 12th, 2009

With rough diamond prices  at half of what they were mid-year 2008,  Target Resources placed diamond mining activity in Sierra Leone on hold to focus on gold projects, according to a note to investors.  Target Resources has 4,262 acres of diamond and gold leases in Sierra Leone’s  Kono District. The junior mining company also has an exclusive marketing agreement with Tiffany & Co., under which the luxury retailer has the right of first refusal on diamond output at market price.

In February, Tiffany agreed to advance Target Resources an additional $1 million loan facility, bringing the total outstanding amount of debt provided by Tiffany  and its subsidiaries to $9 million. The loan allows for commencing trial gold mining in Yele.

“As an alternative source of income, Target intends shortly to commence alluvial gold production along the Teye River and its tributary streams,” according to the mining company.  The gold licence area includes auriferous active streams and alluvial terraces as well as greenstones of the Kambui Supergroup, the largest greenstone belt in Sierra Leone which is highly prospective for hard rock gold mineralization. An operation is also being put in place to recover gold from the slimes discharged during diamond production in Kono.