3.0 Major Issues

The major issues associated with the Merlin Diamond Project are:

This proposal differs from the majority of other mining projects in that the   ore, surrounding waste rock and processing methods are relatively benign.

The diamond bearing material is composed of kimberlite (ultrabasic alkaline   olivine/serpentine mineralogy). Waste rock is composed of sandstones, with minor   inter-bedded siltstones and mudstones overlayed with a capping of laterites and   skeletal sandy soils.

The processing methods are mainly mechanical with minimal use of chemicals in   the processing. Processing of the diamond bearing material will centre on a gravity separation process with the addition of ferrosilicon (non-hazardous) to   aid processing.

Tailings will be comprised of finely ground waste rock, flocculants and water   and will be placed in two tailings dams (coarse and fine). The tailings will be   predominantly alumina-silicates in clay form and are expected to maintain a near   neutral pH throughout.

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