KimCor has acquired two known diamondiferous kimberlite pipes under an existing joint venture with De Beers. The two pipes totaling 9.1 hectares in area are located in the Nzega District of Tanzania.

The Mahene kimberlite, which sub-outcrops over an area of around 6.8 hectares, is a significant target for KimCor in that it is presently the largest confirmed kimberlite in the Company's portfolio. Previous but limited drill-core sampling (53 tonnes) by De Beers returned a diamond grade of approximately 8 cpht, a result that compares favourably with the grade being mined economically at De Beers' Williamson mine nearby. Microdiamond interpretations from the De Beers samples suggest possible macro grades of more than 26 cpht (to be tested via further sampling), while studies of diamond size frequency distributions suggest the potential for the presence of larger stones not yet located due to the small test sample size.

A major bulk-sampling program at Mahene is underway with a test plant being constructed and shipped to Tanzania in the near future in order to more fully assess the economic potential of the kimberlite.

The financial equity structuring arrangement is that KimCor will hold the majority equity interest in the Project with De Beers retaining a 5 per cent interest. KimCor will commit up to US$1.5 million to fund exploration. Upon completion, De Beers has the option to acquire a 51% shareholding in the project by reimbursing KimCor three times its exploration spending. Alternatively it may elect to remain a 5% shareholder or consent to a 1.5% gross revenue royalty. KimCor will be required to sell all diamonds recovered in the licence area to De Beers.