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Diamond explorers under the gun
Allan Seccombe
Posted: Sun, 10 Sep 2006

[miningmx.com] -- INVESTMENT in diamond exploration is starting to dry up and it will take a major discovery to reverse the trend, said John Bristow, president of Rockwell Ventures.

“Investors are starting to be less supportive of the pure exploration plays. It is in all commodities, but certainly on diamonds because there is a much higher risk,” Bristow told Miningmx.

The last major diamond discovery was Canada’s Ekati in 1991.

“Another find like that would fire up investors and they see a return from a significant diamond discovery and that would set the trend again,” he said on the sidelines of a Geological Society of South Africa symposium on diamond projects.

There are 6,500 known kimberlites, which are carrot-shaped plugs of ancient volcanic material, but only a tiny fraction contain diamonds. Of these about 60 are being mined and of those a mere 25 are described by Bristow as world class.
Another find would fire up investors
Africa would almost certainly be home to the next big find because it is a relatively under-explored continent where geologists are starting to crack geological challenges, he said.

“Countries like Angola and the Democratic Republic of Congo (DRC) must be up there amongst the best options,” he said.

Bristow, a geologist with 30 years experience of alluvial diamond mining experience and kimberlite development, used to work for De Beers. He was also chief executive of Kalahari Diamonds, which was merged with Petra Diamonds last year. He also listed Gem Diamond Mining Corp., which is now part of Transhex, South Africa’s largest listed diamond company.

Rockwell is listed on the TSX Venture Exchange and is managed by Hunter Dickinson Inc.

Among the geological challenges standing in the way of diamond discoveries are sand cover and the ability 'see' through the sand cover, Bristow said. In Botswana, Angola and the DRC are mantled by sand up to 100 metres deep.

Another of the challenges is finding skilled geologists in a time when there is massive demand for commodities. As a result, companies are dusting off old projects and embarking on exploration or expanding existing operations.

“There is an unprecedented boom in exploration,” Bristow said. “If we are going to make the deposits in Africa work we need good geologists and there just aren’t enough.”

There are more than 50 mid-sized juniors trawling through Africa to find diamond deposits, be they alluvial or kimberlite.

Africa holds a narrow lead over Canada when it comes to diamond exploration, with $266m spent last year on the continent versus $226m spent in the North American country.

Africa has about 10% of the world’s known cratons, or diamondiferous sources, yet it accounts for more than half of global production.

Africa accounted for $8.1bn of last year’s global diamond production of $13bn, led by Botswana, South Africa and the DRC, according to data from Louis Selekane, chief executive of the South African Diamond Board.
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The Diamond Board should cease to exist in the next couple of months and be replaced with the overarching South African Diamond and Precious Metal Regulator (SADPMR). This is in terms of amendments to the Diamond Act, designed to increase the number of diamonds cut and polished in South Africa. The aim of the act is to create jobs and generate wealth.

A State Diamond Trader will replace the Diamond Board and buy a portion of local production to supply the domestic cutting and polishing industry. All diamonds for export will have to be first offered to the Diamond Exchange and Export Centre.

African diamond countries are pulling together to form an African producers association.

Bristow is also chief operating officer of Rockwell Ventures which has alluvial diamond projects in production near Kimberley in South Africa. The company is also exploring a prospect on the Cuango River in the southwestern DRC.

The Kimberley Mine, which has a life of some eight years, is producing 20,000 carats a year of high-value diamonds, which generally fetch about $1,000/carat, Bristow said.

Rockwell intends doubling output over the next two years by working longer hours at the mine, using bigger equipment, and increasing the size of the operation, he said.

The company has submitted applications to convert to new order mining rights and has an empowerment partner in place.

In the DRC, Rockwell has about 33km of the Cuango River and associated terraces to explore. Artisanal mining in the area has shown there are alluvial diamonds to be had. An evaluation programme should be completed by the end of 2007, Bristow said.