Theo Botoulas, CEO BRC DiamondCore
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BRC DiamondCore sells more large stones
Brendan Ryan
Posted: Tue, 03 Jun 2008

[miningmx.com] -- BRC DiamondCore (BRC) is “on the verge” of shifting its Silverstreams alluvial diamond project from the bulk sampling stage into commercial production according to CEO Theo Botoulas.

His comments follow the results of the third tender sale of diamonds produced by the company which realised US$2.5m with $1,42m of that generated by just two diamonds recovered from Silverstreams.

These were a 77.34 carat stone which sold for $904,724 – equivalent to $11,698/carat – and a 13.65 carat stone which went for $518,180 equivalent to $37,962 a carat.

The latest recoveries have pushed the average carat value of diamonds recovered from Silverstreams up 57% to $2,511 since sampling operations started in May last year.

As a result BRC intends increasing the treatment capacity at Silverstreams by 50% through the construction of two more rotary pans at a cost of R1m each.

Botoulas said, “as a result of increased geological and grade confidence delivered by the systematic sampling programme at Silverstreams, as well as access to adequate Eskom power, we will implement the first phase of doubling capacity.”

BRC had previously indicated a decision on whether Silverstreams was economically viable was only likely by the end of the third quarter this year so the latest diamond recoveries seem to have speeded up that decision.

Botoulas commented today, “ we had said we would make a decision on Silverstreams by October. The plant was built to a modular design which makes expanding it cost effective.”

The latest tender also provided encouraging results from the PK5 kimberlite which is part of the Paardeberg East kimberlite complex near Kimberley which BRC is also evaluating.

Average value of stones from PK5 was $390,9 per carat and Botoulas said further geophysical work and delineation drilling is being carried out.

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The BRC statement noted “The quality of diamonds produced from the PK5 samples has been exceptional. The forecasting plots indicate PK5 has the potential of recovering special stones greater than 10.8 carats. This has been reinforced by the recovery of an 18.36 carat stone. The stone sold for $7,307 per carat. “

BRC has provided no indication so far on working costs at the operations or profitability but Botoulas said these numbers would be published in the quarterly report for the three months to end-June.

In April, BRC said it would have to raise additional capital in 2008 to fund its exploration programme in the Democratic Republic of Congo (DRC) and repay loans totalling some C$6m to shareholder Banro Corporation.

Problem BRC faces is that its share price has collapsed from R36 in mid-February to current levels around R11.

The stock has been hit through a combination of negative investor sentiment against junior mining stocks generally as well as uncertainty over the fallout between BRC and its former empowerment partner Sefalana.

Sefalana indicated in April it intended taking legal action against BRC over BRC’s action in terminating their BEE agreement last October.

Botoulas commented, “any fund raising would depend on the share price and we believe our shares are undervalued at present. We have enough capital to grow our production and will look at alternative funding arrangements if necessary. We have enough cash to keep plodding along.”

Sefalana chairman Gordon Young could not be reached for comment on the latest state of play with BRC.

Botoulas has stated previously he has been engaged in a “process” with Sefalana CEO Lesedi Rakakgong to resolve the situation. He said if Sefalana took legal action against BRC then the company would announce this development.