Aim- and Botswana-listed African
 Diamonds wants to see “rapid” devel-
 opment of the controversial AK6 diamond project in Botswana after brokering a deal in which its new “like-minded” partner has bought out the 71% stake held by its former partner, De Beers.

African Diamonds, which at one stage threatened legal action against De Beers, said last week that it intended exercising its 120-day option to increase from 29% to 40% its share of the AK6 project by acquiring a stake from the TSX-listed Lucara, which it said was backed by the Lundin group.

African Diamonds would thereafter proceed to engage in the development of AK6, which chairperson John Teeling said had high-value diamonds, “including the big, rare and beautiful Type II nitrogen-free stones”.

Mine development would start in mid-2010, and first production would take place in 2011.

AK6, in the Orapa region, had the potential, African Diamonds said, to become a mine 
capable of producing one-million carats a year and African Diamonds would have the right to market its share of the diamonds produced.

Studies showed that it would cost $63-million to establish a two-million-ton-a-year 
operation capable of producing more than 
400 000 ct at a modelled grade of 22 ct per hundred tons (cpht). 
A further $25-million in capital expenditure would double the output of tons and carats.

African Diamonds management believed that the grade would be 25 cpht, output of one-million carats.

The current life-of-mine from the opencast was 12 years, and the deposit contained a 
further seven-million carats at depths of 
372 m to 758 m.

“It will come on stream at the right time. The economics are compelling. Prices are rising. Demand in the Far East is growing, while supply is, at best, flat. By 2012, there will be only a few kimberlite diamond mines in the world,” Teeling said.

African Diamonds partnered De Beers for six years: “Together we found a diamond mine but, over time, the needs and aims of African Diamonds diverted from those of De 
Beers. 
“It was a genuine pleasure and privilege to work with De Beers. An amicable separation is a good outcome,” Teeling said.

The Lundin family, who control Lucara, have built a group of oil and mining companies. “Having John Gurney and Eira Thomas involved will provide expert guidance and credibility,” Teeling said.

At one stage, construction of the mine was expected to start in 2009, and production by the end of 2010, a lead role having been played by Boteti Exploration, a joint venture (JV) 
between De Beers Prospecting Botswana with 71%, African Diamonds with 28% and Wati Ventures with 1%.

The revised plan was developed after the JV partners struggled to secure finance for what was said to be a $260-million mine 
development plan.

In October 2008, the Boteti JV was granted a 15-year mining licence by the Botswana government for the project, the licence being issued with effect from October 10, 2008, to October 9, 2023.

All Boteti’s production was, at that stage, to be sold through the De Beers-linked Diamond Trading Company Botswana.

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