www.miningmx.com | diamonds African Diamond's Botswana mine on track

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African Diamond's Botswana mine on track
Julie Bain
Posted: Thu, 20 Mar 2008

[miningmx.com] -- AFRICAN Diamonds said the AK6 project in Botswana, part of a joint venture with De Beers, should be producing gem quality diamonds by the end of 2009.

The AIM listed company has a 29% stake in the joint venture with De Beers in Botswana which includes three projects at later stages of development, AK6, AK7 and AK9.

"When AK6 starts producing at the end of 2009 it will be one of only 12 operating hard rock diamond mines in the world, it's a world class mine, with over 80% [of production expected to be] of gem stone quality," said John Teeling chairman of African Diamonds.

80% of gem stone quality

He said the joint venture plans to be producing 1 million carats a year from the mine, which has a life of mine as an open pit operation of ten years with the opportunity then to go underground after that, by 2011.

As it stands, an application for a mining licence for AK6, which is in the diamond rich Orapa area in Botswana, has been submitted and the African Diamonds said "significant progress has been made".

At the AK8 prospect, field work has been completed and Teeling said there is the possibility that it might yield a "small mine", say 300,000 carats a year. AK9 may offer a similar possibility but more work has to be completed on both prospects.

The joint venture's exploration programme, which has identified about 30 kimberlites in Botswana, for now, is focussing on the Makgadikgadi Pans area, to the north of the Orapa area, where Teeling said there may be the possibility of discovering more large kimberlites.

"In a couple of months we will know whether AK8 would provide a revenue per tonne that justified continuing to the feasibility study stage. By the end of the year we should have information on the same basis about AK9," said Teeling.

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African Diamonds listed on AIM in 2003 and two year later introduced a secondary listing on the exchange in Botswana.

"We are seeing a rise in investment [in the company] by investors in Botswana. They now hold more than 20% of the company and I expect this to have risen to 30% two years from now," said Teeling.

Further to its joint venture with De Beers, African Diamonds has a separate wholly owned busines in Botswana and one of its focuses is carrying out a review of the previously completed geographical survey data on what is known as the Kedia block. The block lies to the west of Orapa and covers more than 3,000 square kilometres. Primary field work will start in the second quarter of this year, said the company.

African Diamond also has a 35% interest in Bugeco, a privately held Belgian firm which is in a joint venture with De Beers and has a number of mining licences in the Democratic Republic of Congo (Congo).

"Ten kimberlites have been discovered and we are going to the bulk sampling stage now," said Teeling.

Other interests include a 12% stake in West African Diamonds which is producing gold and diamonds in Sierra Leone and Guinea.

As an exploration and development company African Diamonds has no revenue as yet and said today it had recorded a loss in 6 months to the end of December of �202,000 compared to a loss of �176,00 in the same six months last year. In the next financial period Teeling said the company will see costs rise as it pays its proportion of the exploration costs in Botswana. Until now De Beers had been covering the costs of the joint venture exploration.

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