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Petra pins hopes Cullinan's longevity Posted: Tue, 05 Feb 2008 [miningmx.com] -- PETRA DIAMONDS is looking to replicate its operating successes at Koffiefontein at Cullinan, the diamond mine near Pretoria which it bought from De Beers last year for R1bn. According to Petra CEO, Johan Dippenaar, addressing delegates at the Mining Indaba being held in Cape Town, Cullinan is estimated to have a remaining economic life of at least 20 years at a production rate of one million carats annually. That differs from De Beers’ own estimate on Cullinan’s remaining life which was that the mine had five years to go and production would tail off during that period from the 1.1 million carats produced in the year to December. Asked to explain the difference, Petra technical director Jim Davidson said the answer lay in De Beers’ highly conservative assessment of the reserves that remained to be mined. “On De Beers’ own figures the resource still to be mined in the current “B” Cut is some 60 million carats. They apply an internal reserve calculation to that which is far stricter than the accepted JORC or Samrec measures. “The whole issue revolves around how much of that remaining resource you believe you can mine profitably,” he said. Petra management is pointing to its successes at Koffiefontein as an indicator of what may be to come. Koffiefontein was also previously owned by De Beers which had closed the mine down as being unprofitable. Petra paid $11.7m for Koffiefontein and brought mining operations back on stream from July last year. Dippenaar said that, since then, Petra had achieved a grade of 8.2 carats per hundred tonnes of ore (cpht) against an anticipated grade of 7.4 cpht. He added further improvements in grade were expected and that there was potential to increase production 50% by pushing output from the current one million tonnes annually to 1.5 million tonnes/year. Dippenaar added the average value per carat achieved from sales had reached US$408 compared with an anticipated figure of $240 while the mine regularly produced “large and exceptional “ stones. Three diamonds recovered since August had sold for prices ranging from $736,000 to $1m each. He said Koffiefontein’s life could be significantly extended by deepening the existing workings below their current bottom level at 490m. He believed the mine’s diamond resource could be upgraded through bringing in resources below depths of 620m which were not included in the current reserves and resources statement. In addition to the “B” Cut resources there are two other major diamond resources at Cullinan which can be exploited. The first is the 160 million tonnes of surface tailings dumps which are estimated to contain about 16 million carats of diamonds. Davidson pointed out that calculation again is based on De Beers conservative estimates. Click Here to subscribe to our daily newsletter
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