GOLD 1211.10 $/ozChange: -6.87
PLATINUM 1303.00 $/ozChange: -6.00
R/$ exchange 11.29Change: -0.06
R/€ exchange 14.28Change: -0.05
We have detected that the browser you are using is no longer supported. As a result, some content may not display correctly.
We suggest that you upgrade to the latest version of any of the following browsers:
close notification
powered by
Advanced Search
Features Library
Mining in Africa
Diamond-mining still glittering in Africa
Embed Code Close
15th January 2010
Text Smaller Disabled Text Bigger

As the world’s largest producer of dia- monds, producing more than 75% of diamonds in value with more than 1,9-billion carats worth an estimated $158- billion, Africa is picking up the pace following the global recession.

However, there are also a few challenges in the industry hampering production. Continuing conflict in Angola between Unita rebels and Angolan government troops is beginning to spill over into its neighbouring countries, Namibia and Zambia.

Another challenge is the financing of diamond mines, as the recession has had some significant impacts on this sector, resulting in companies plummeting into debt and having difficulty paying off these debts.

Africa-focused diamond explorer BRC DiamondCore reports that it has closed a nonbrokered private placement of 20- million shares at a price of $0,05 a share to generate proceeds, following its recent cash flow problems. The company has also announced that it has closed debt settlement transactions with certain of its creditors, pursuant to which the creditors agreed to accept the common shares of the company.

The company intends to use the proceeds from this financing for working capital and general corporate purposes. Directors of the company bought a total of 12-million units issued under the financing.

Further, BRC DiamondCore has also signed a letter of intent with diversified miner Rio Tinto Mining, whereby Rio Tinto will fund the exploration of certain parts of the company’s Tshikapa kimberlite project, located in Kasai-Occidental province, in the Democratic Republic of Congo.

The letter proposes that Rio Tinto have the right, under a staged earn-in arrangement, to earn a 75% interest in a joint venture.

The project is situated in the highly prospective kimberlite emplacement corridor, extending north-east from the Kimberlite fields of the Lunda Norte province, in Angola.

The area has produced over 100-million carats of diamonds and the results from stream samples taken in the area indicate the presence of promising kimberlite indicators.

Meanwhile, there have been some highlights in the industry, such as the discovery of potential diamondiferous kimberlites, in Mauritania, by diamond-mining company Rex Diamonds and Canadian exploration company Ashton Diamonds.

Further, diamond-mining company Lucara Diamond Corporation reports that it has entered into a sales agreement to acquire a 70% interest in Boteti Exploration, which holds a 100% interest in the AK6 project, from diamond-miner De Beers Prospecting, of Botswana. The AK6 project is an advanced diamond development project in the Orapa district of Botswana.

A mining licence was awarded for the project in October 2008 and the development of AK6 is planned as an openpit operation. The company also reports that detailed design work will start as soon as the feasibility study has been updated, which is expected to be completed in the first half of 2010.

It is expected that the AK6 mine will be in production within 18 months of completion of the feasibility study update, subject to approval from the government of the Republic of Botswana. Further, the company expects to prepare an NI 43-101 technical report on the property within four months following the closing of the transaction.

The project is also well connected to infrastructure around its deposit, which includes paved roads, water and power from the national grid. The project is close to some of Botswana’s largest diamond mines and comprises three intersecting pipe-shaped lobes of diamond-bearing kimberlite with a similar geology to the nearby diamond mines.

Lucara COO William Lamb says that the company is pleased with the acquisition and is looking forward to working with African Diamonds on the development of the AK6 project.

“The mission, since inception, has been to build a leading Africa-focused diamond production and development company. With this acquisition, we are well on our way to achieving that goal. We have the Mothae project, in Lesotho, going into preproduction test mining in 2010 and now the AK6 deposit, in Botswana, expected the year after. AK6 adds another strong asset to Lucara’s growing portfolio,” he adds.

Further, Lucara has agreed to provide a $2-million convertible loan to African Diamonds to fund its portion of the updated feasibility study and working capital.

The acquisition transaction is subject to the approval of the government of the Republic of Botswana.

In other news, diamond-miner Dolat Ventures says that its soon-to-be-acquired diamond-miner Dove Diamonds & Mining, which intends to sell, market and distribute diamonds, minerals and precious gems in the US and internationally, may seek to focus on potential mining operations in West Africa’s Sierra Leone.

Soros Fund Management chairperson George Soros says that, after meeting Sierra Leone President Ernest Koroma and other members of government during his first visit to Freetown in 2007, he noted that Sierra Leone’s new government was serious about moving the country forward.

“Each subsequent meeting has boosted the confidence that, despite many challenges, Sierra Leone has significant, unrealised potential and is open for business and investment,” he explains.

He adds that, if investors look carefully at Sierra Leone, it is clear that the country has the potential to become a leading African economy.

“The foundations for a prosperous future are being laid in Sierra Leone right now. There is significant opportunity for high future returns on investment. Investing in, and strengthening, the economy in Sierra Leone and its neighbouring countries is crucial for building open societies in West Africa,” he concludes.

Dove Diamonds & Mining CEO Dovid Hauck adds that Sierra Leone has announced an increase in royalty rates to 6,5% on diamonds, from 5%, and to 5% on gold and other precious metals, from 4%. “We also intend to spend more than the stated 0,1% of yearly gross revenues on community ini- tiatives,” he adds.

Edited by: Shannon de Ryhove


To subscribe to Mining Weekly's print magazine email or buy now.

FULL Access to Mining Weekly and Engineering News - Subscribe Now!
Subscribe Now Login