There is a false perception in the market- place and among investors that it is risky to invest in alluvial diamond mining companies as the exact location of alluvial diamond deposits cannot be determined before extraction, says alluvial diamond mining company Rockwell Diamonds CEO James Campbell.
Rockwell argues that the discipline of geological work that applies to resources such as coal, gold or kimberlite diamonds also applies to alluvial diamonds. Airborne geophysics, mapping, drilling and bulk sampling have to be done for the resource to be defined.
Campbell states that some alluvial diamond mining companies believe the process of defining an alluvial diamond resource is too complicated and mine according to uncertain resource indications or with no resource indications at all.
“The bulk of these companies are at risk of going bankrupt, which fuels the perception that investing in alluvial diamond companies is risky.”
He states that geological work with regard to alluvial diamond mining is an absolute requirement for success.
Being listed on the TSX, Rockwell has the obligation to carry out its resource work upfront and publishes the results according to NI 43-101, a national instrument for the standards of disclosure for mineral projects in Canada.
“NI 43-101, therefore, also applies to alluvial diamonds. If you meet the national instrument requirements for an indicated resource, then it is an indicated resource and extraction can take place,” says Campbell.
He adds that diamond value management is needed to ensure successful extraction.
“Diamond value management is achieved by ensuring that every single diamond you wish to extract is economically extracted from a deposit,” Campbell explains.
To do this, companies must have a resource plan, which should be supported by a mine plan. The right mixture of technologies should also be used in the processing plant to ensure that all diamonds are extracted.
Campbell stresses that losses should be kept to a minimum and, while there are companies that claim that loss through theft is not a problem, every company is faced with the risk of theft.
Rockwell’s measures to manage this risk consist of covert and overt cameras, as well as security surveillance, and regularly conducts lifestyle audits on all employees.
“We are always thinking of new ways to reduce the potential for diamond theft, which is a very serious threat for every diamond mining company,” says Campbell.
Further, Campbell says the reason for the absence of geological work in alluvial diamond mining is the absence of available literature on the success with which alluvial diamonds can be mined.
“Literature on assessing alluvial diamonds is scarce and, to date, the authors of such resources have either been Rockwell employees or well-known experts such as University of Pretoria associate professor of metallurgy Dr Mike de Wit.”
Campbell states that alluvial diamond mining is a specialised field, with limited employment opportunities, as there are only a few large-scale alluvial diamond companies in the world. This explains the dearth of literature on the topic.
In response to the absence of literature on how alluvial diamond resources can successfully be converted into reserves, Rockwell diamond processing metallurgist Dr Kurt Peterson compiled a paper that aims to explain the company’s diamond value management strategy and the importance of geological and mineral process- ing work.
The company planned to present the paper, Rockwell Diamond Value Management: Principles, Practices, People and Technology, at the Prospectors and Developers Association of Canada (PDAC) international convention this year, but as a result of a year-long waiting list for presenters, it hopes to present it at PDAC 2013 instead.
“The main goal is to present this paper to a broader audience and to prove to the mining industry and investors that alluvial diamond mining is not risky when coupled with adequate geological work and diamond value management,” says Campbell.
New Processing Equipment
Meanwhile, in an attempt to increase the success rate at which Rockwell is extracting alluvial dia- monds, the company acquired a large bulk X-ray and single-particle sorter, which will improve its recovery efficiencies from 80% to 95%.
The sorter technology was developed in Russia by mining equipment and training provider Bourevestnik (BV). Rockwell commissioned the technology, which has been commercially available for the past 18 months, in April, and is currently testing it on recovery tailings.
The technology is based on a high-throughput BV sorter and one BV single-particle sorter offering high recovery efficiencies, better security, lower operating costs and assistance in the recovery of large diamonds that measure 5 mm and more.
Rockwell approved a capital project for the bulk X-ray technology in August last year, followed by a six-month lead time during which the company built infrastructure to accommodate the technology, such as a conveyor belt, to power the water, screens and scrubs, at its Saxendrift alluvial project, on the bank of the Orange river, in the Northern Cape.
The project was completed on time and within budget in April, and the bulk X-ray technology started processing old recovery tailings at Saxendrift on April 16.
Campbell states that this project has been scoped as a proof-of-concept test plan and, if successful, will also be applied at Rockwell’s other Middle Orange properties.
He states that the bulk X-ray technology assists in making alluvial diamond mining more attractive for investors, as it improves the success of diamond recovery and decreases the risk of theft as the technology is automated.