Atlantis II Zinc, Copper and Silver Deposit Update

Aug 16, 2010 | 2010, Corporate News

Vancouver, Canada. August 16, 2010: Diamond Fields International Ltd.(DFI:TSX) (“DFI” or the “Company”) is pleased to provide a further update on the Atlantis II Red Sea Deeps project, widely acknowledged as the largest known poly-metallic marine SEDEX deposit in the world (see DFI press release dated 4th June 2010). DFI is developing the project with its Saudi joint venture partner Manafa International.

The Atlantis II basin containing the Atlantis II deposit is located in the Red Sea, approximately 115 km west of Jeddah. The Atlantis basin is comprised of four interlinked sub-basins lying approximately 2,000 meters below sea level. Base and precious metal mineralisation contained within the sediments have attracted considerable exploration interest since their discovery in 1965. It is estimated that more than US $28 million (in 1970’s dollars) was spent on exploring the deposit. The historical work has shown the economic potential of the deposit by evidencing extensive and continuous mineralisation of zinc, copper, silver, gold, lead, and other metals.

In the mid 1970’s, the Saudi-Sudanese Red Sea Commission (RSC) was established with the directive of assessing the economic potential of these resources. Preussag A.G., a German exploration company, was commissioned by the RSC to conduct a five-year geological exploration program and technical feasibility study. This process concluded in 1982 with positive results. Together with Manafa, DFI has obtained the documented records and hard data generated during the study, and have located the original Preussag sediment cores. DFI is analyzing the data and modelling the deposit using the latest technology, and otherwise moving forward with the preliminary steps necessary to develop the project.

The Preussag coring program on average sampled only the uppermost 8.5 metres of the sedimentary sequences. The program demonstrated that mineralisation is open at depth and extended over an area of approximately 57km2. Composited one metre core assays showed a variable grade in the top 7-11 meters of sediments, with high grade areas yielding results up to 20.1% zinc, 3.6% copper and 338 ppm silver. The underlying sediments were also shown to be mineralised in all of the samples that were taken extending into this unit. The thickness of these underlying sediments is currently unknown, but high resolution seismic studies undertaken by Preussag suggest that it may attain thicknesses of up to 28 meters.

Deep tow seismic data commissioned as part of the Atlantis II investigation indicates that sediments in some parts of the Atlantis basin may attain a total thickness of up to160 metres. The composition of these deeper sediments is currently unknown, but they offer potential to host a further significant resource. On the basis of the data from the Preussag study, the Company estimates that only a minor portion of infilling sediments contained within the Atlantis II Deeps have been sampled.

A historical resource figure based on 587 core samples taken only from the uppermost unit and the first meter of the underlying sediments (average 8.3 meters thickness) estimated the deposit to contain 89.5 million tonnes of sediment at a grade of 2.06% Zinc, 0.45% Copper and 38.4ppm Silver on a dry salt free basis (“DSF”). The Company has not done sufficient work to classify the historical estimate as current mineral resources. Accordingly the Company is not treating the historical estimate as current mineral resources, and the historical estimate should not be relied upon.

A pre pilot test mining study undertaken by Preussag successfully demonstrated that the mineralised mud of the Atlantis II Deeps can be continuously mined and concentrated at sea, using conventional flotation techniques. During test mining operations, 15,000 m3 of sea floor sediments and brines from four test sites in the Atlantis II basin were processed. Metal grades derived from this operation proved to be higher than those predicted by the Preussag resource modeling, with grades varying from 2.51% – 4.91 zinc, 0.47%- 4.91% copper and 59.43 ppm — 111.24 ppm silver (DSF).

“The potential of the Atlantis II deposit is vast and represents the largest known polymetallic SEDEX marine ore body in the world” said Ian Ransome, DFI’s Chief Executive Officer.

The geological information in this press release has been reviewed by Mr. Ian Ransome (BSc Hons) Pri.Sci,Nat who is a qualified person in terms of N43-101 regulations.


“Ian Ransome”

Ian Ransome, Chief Executive Officer
For further information, contact Ian Ransome at +1 604 685 9911.

Support for the historical geological data for this Release came from the Atlantis II Red Sea data and reports generated by Pressaug AG and from the following sources:

Blanc, and Anschutz, 1995. New stratification in the hydrothermal brine system of the Atlantis II Deep, Red Sea. Geology.1995; 23: 543-546

Guney M., Nawab Z., and Mahoun N.A., 1984: Atlantis II Deep’s Metal Reserves and their Evaluation. OTC 4780, 16th Ann. Offshore Technology Conf. Texas.

Herzig P.M., Holroyd, R. Hardman, M. Osmaston, J. A. Karson, R. S. White and K. Rohr, 1999; Economic Potential of Sea-Floor Massive Sulphide Deposits: Ancient and Modern [and Discussion]. The Royal Society.

Herzig, P.M., Petersen S., and Hannington M.D., 2002: Polymetallic Massive Sulphide deposits at the Sea Floor and their Resource Potential. In Polymetallic Massive Sulphides and Cobalt-Rich Ferromanganese Crust: Status and Prospects. International Seabed Authority Tech. Rep. No. 2.

Forward-Looking Statements:

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Diamond Fields’ periodic filings with Canadian Securities Regulators. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Diamond Fields does not assume the obligation to update any forward-looking statement.

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