Metswedi Mining has received the first renewal for both prospecting licence (PL) 101 (430 km2) and PL58 (2.3c) which make up the Middlepits project, in Botswana, Canadian diversified junior mining company Tango Mining announced last month.
The property is 470 km south-west of Gaborone and 90 km south-west of Tshabong, in the country’s Kgalagadi district.
TSX-V-listed Tango is set to acquire a 75% unencumbered interest in the Middlepits from Metswedi and is responsible for all further exploration and development expenditures on the property. Middlepits was renewed for a period of two years, from October 1, 2018, to September 30, 2020.
The property was explored between 1974 and 1976 by diamond giant De Beers, between 1978 and 1980 by Canadian natural resources company Falconbridge and between 1993 and 1997 by Southern Africa Minerals Corporation. The work resulted in the identification of a 100 km2 area of gravels containing diamonds and heavy mineral concentrations, mainly garnets and ilmenites.
The property also hosts a kimberlite called Kolonkwaneng, identified by De Beers in 1977. More recent airborne geophysics suggest it is elliptical in shape and is 127 m by 226 m in diameter. Bulk sampling work by De Beers recovered micro diamonds and heavy minerals that indicate the kimberlite is diamondiferous.
Developments in Angola
In Angola, Tango has signed a services agreement for the mining and marketing of diamonds with Cooperativa Mineira Do Moquita (Moquita) on a 147 km2 portion of a concession 50 km north of Lucapa within the Lauchimo River basin, in the country’s Lunda Norte province.
Tango is responsible for capital expenditure associated with alluvial diamond mine design and equipment acquisition, as well as enhancing production. As remuneration, Tango will receive 60% of the proceeds from the sale of diamonds produced.
The property is about 50 km downstream from the high diamond value Camútuè kimberlites. These, and possibly other kimberlites, have fed extensive downstream alluvial diamond deposits along ancient, north trending river systems, including the Lauchimo river, which flows south to north across the Moquita property. Such alluvial diamond deposits have been exploited by artisanal miners and several companies for many years; however, the area is still considered relatively undeveloped given the property’s diamond potential.
Owing to their higher specific gravity, alluvial diamonds are concentrated in basal gravel horizons of various ages. The most widespread and important such gravel in Angola is the late Cretaceous Calonda Formation. However, diamonds also occur in younger, Plio-Pleistocene and Recent river gravels and terraces. All these depositional settings are present on the Angolan property, says Tango.
During 2016 and 2017, Moquita carried out a bulk sampling programme on the property to test the diamond quantity and quality of Calonda Formation gravels in three areas. A small pan plant and associated equipment was mobilised to site and the bulk sample programme was successful in achieving this objective. Tango plans to restart bulk sampling and trial alluvial diamond production as soon as practical with the implementation of an updated project development plan and strategy.
The Somiluana mine, 38 km south-east of the Moquita property and partially owned by JSE-listed diamond mining company Trans Hex, mines similar Calonda Formation gravels as those found on the property.
For the financial year ending March 31, 2018, Trans Hex produced 136 402 ct, which were sold at an average price of $504/ct. The Somiluana mine, says Tango, continues an aggressive drilling programme to identify new resources in Calonda Formation gravels, as well as terraces and floodplains. Production results and geological work through drilling and bulk sampling indicate that carat production for the 2019 financial year is expected to be in the order of 145 000 ct, according to Trans Hex’s 2018 annual report.
Tango has secured two term loan facilities for a combined $500 000 to fund the capital and operating costs of Phase 1 work for the mining of diamonds at its Moquita project. The company entered the Phase 1 corporate loan agreement for $250 000 and Phase 1 equity loan agreement for $250 000 with CC Mining Limited (CCML) a member of CC Energy Limited (CCEL). CCEL is an independent and privately owned upstream oil and gas exploration and production company.
It is expected that no further funding will be required, says Tango.
The Phase 1 corporate loan agreement is subject to an interest rate of 15% a year, payable monthly, while with regard to the equity loan agreement 50% of the proceeds received from the sale of diamonds recovered from the project will be paid to CCML in lieu of interest. As security for the loans, Tango has agreed to a bank account charge over a project specific bank account and a security assignment over the Moquita project, both in favour of CCML.
Tango has also agreed to form a joint venture (JV) with CCML, in the event that CCML exercises its right to participate in the Phase 2 development plan of the Moquita project, which would include an expansion and increase in production on the property. If the JV is created, CCML will provide a loan facility to the JV to carry out the Phase 2 capital and development requirements.
Also Active in SA
Through its South African subsidiaries, Tango holds three thermal coal, metallurgical coal and processing plant and engineering contracts that process 6.5-million tons of coal a year, with clientele that include Exxaro.
The three projects are in the Ogies and Highveld coalfields, in Mpumalanga, and the Kliprivier coalfield, in KwaZulu-Natal. The company also holds an interest in the Oena diamond mine, an alluvial diamond property, in the Northern Cape, that has recently restarted operations under contract to diamond recovery company Bluedust.