VANCOUVER, June 5 /CNW/ - Kimber Resources Inc. (AMEX:KBX, TSX:KBR)
Share Prices
The Kimber share price had a strong move to C$3.95 in April before some
(very understandable) profit-taking took it back to around C$3.00. Then, when
the gold price dropped in mid May, we were caught in the downdraft along with
most of the industry. We are fortunate in having a strong treasury (C$16.5M at
month-end). This allows us to carry on with the task in hand which is to add
value in two ways: by increasing the number of resource ounces and by
advancing a good portion of them to feasibility as soon as possible.
Politics in Latin America
Events in Venezuela, Bolivia, and Peru have prompted a request for a
comment in our monthly newsletter on how Mexico may be affected by the recent
anti-business sentiment in some South America countries. For several reasons,
politics in Mexico is not a topic of concern to us. First, along with the
United States and Canada, Mexico is a signatory of NAFTA, the North American
Free Trade Agreement. Foreign Direct Investment in Mexico between 1994 and
June 2005 has amounted to $156 billion, most of it from the USA. It seems
unlikely that Mexico will turn away from this engine of prosperity. The
benefits are evident. Much of the part of Mexico with which we are familiar is
a developed country with a burgeoning middle class, well-engineered highways,
an efficient civil service, and an effective legal system. One independent
opinion on Mexico as a place in which to do business is provided by the Annual
Survey of Mining Companies published by the Fraser Institute. Unlike several
South America countries, Mexico is rated highly as a jurisdiction favourable
for mining. The Economist magazine (May 28) provides another opinion:
"Although it is a closely contested race, the presidential election of
July 2006 is not expected to destabilize the economic environment."
Types of Drilling
From time to time Kimber is asked to compare reverse circulation ("RC")
drilling with core drilling for resource estimation. Core drilling has been
the principal tool for most base metal and high grade gold deposits since the
middle of the last century. It remains the standard type of drilling for high
grade gold deposits in the Archean terrains of Canada and elsewhere.
Percussion drilling was used to a lesser extent because it did not reveal
geological details and the samples it provided were sometimes made unreliable
by downhole contamination. The reverse circulation adaptation to percussion
drilling, in which the rock chips are blown back up the inside of the drill
casings instead of up the outside of the drill casings, addressed the
contamination problem and became widely used in the US southwest, where it
remains the tool of choice for testing and sampling disseminated gold
deposits. RC drilling is cheaper, needs less or no water, and provides a large
enough sample for statistical reliability. It requires a different and more
demanding sampling procedure than core drilling, the absence of which may
produce incorrect results.
The comparative merits of RC and Core drilling for estimating resources
of deposits which incorporate significant zones of low grade gold are best
addressed by comparing the precision of each method. The standard way to do
this is to plot precision using a "Thompson-Howarth" diagram. This and other
aspects of Reverse Circulation and Core drilling on the Carmen deposit are
available on the website at http://www.kimberresources.com/rcvscore.html.
Staff Change
Roger Connors, who held the position of Comptroller, left Kimber during
the month. We could always count on Roger to make himself available for
additional, non-financial tasks. These included providing enthusiastic help
with conferences and road shows and making a key contribution to Kimber's
success in obtaining a listing on the American Stock Exchange last year. We
wish Roger well in the next phase of his career.
Investor Relations
Kimber attended and made a presentation at the Hard Asset conference in
New York and held introductory meetings with fund managers and financial
institutions in London, Zurich, Geneva and Oslo.
Other Companies
With increasing frequency we are getting requests from companies larger
than Kimber to visit the property and inspect the data base. Subject to a
Confidentiality Agreement being signed, we encourage such visits.
Drilling
Drilling continues with one reverse circulation drill on the Carmen, and
one on the Carotare. One core rig remains on the Carmen. All drills are
working two shifts (24 hours), 20 days on, 10 days off. The long-awaited third
RC drill is now expected later this month.
About Kimber
Kimber Resources Inc., which holds a 100% interest in the Monterde
property in the Sierra Madre of northern Mexico, is advancing the Carmen
gold-silver deposit towards production. The Carmen deposit, an underground
mine in the 1930's, is a typical low sulphidation epithermal system, oxidized,
and believed to be suitable for open pit mining. Two adjacent epithermal
systems first identified in 2005, the Carotare deposit and El Orito Norte
exploration target appear to be similar to the Carmen. The initial resource
estimate on Carotare was reported in November 2005. The goal of the company is
to demonstrate at least three million resource ounces from the two deposits
and exploration target identified. For further information on the company
visit SEDAR or the company website at www.kimberresources.com.
Cautionary Statement
Statements in this release may be viewed as forward-looking statements.
Such statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. There are no assurances the
Company can fulfil such forward-looking statements and the Company undertakes
no obligation to update such statements. Such forward-looking statements are
only predictions; actual events or results may differ materially as a result
of risks facing the Company, some of which are beyond the Company's control.
