TORONTO (miningweekly.com) – South African diamond miner Rockwell Diamonds on Thursday said it had successfully commissioned a new 50 000 m3/m plant at its Tirisano property, following implementation of a new mine plan to allow for the mining of higher-grade gravels with a higher clay content.
CEO James Campbell told Mining Weekly Online in Toronto that the 90 000 m3 plant, which had limited mining on the property to a less clay-rich area, had been temporarily mothballed, and a smaller fit-for-purpose 50 000 m3 plant was constructed to align with the company’s newly commissioned wet front-end technology.
The new technology would allow the mining of higher-grade gravels with a higher clay content.
“The intention was to start mining of the No 4 area of the Tirisano property, rather than the No 1, 2 or 3 areas, which would give us greater certainty of the grade and revenue from the mine,” he said.
The transition to the No 4 area required a significant amount of prestripping, at a rate of 14 t of waste to 1 t of diamond-bearing ore.
The company in July announced a turnaround strategy for the mine, aimed at reducing the operating cost structure.
Mining Weekly Online in July reported Rockwell’s first-quarter loss of C$3-million was a direct result of the C$2.5-million start-up expenses at Tirisano and a decline in diamond prices. Smaller-than-average diamond stone sizes also negatively impacted on the mine’s revenue, despite a doubling in carat production for the three months to May.
The cost restructuring resulted in the retrenchment of 120 miners, the legal process of which was well advanced and expected to be settled “soon”, Campbell said.
Tirisano, which is located in the North West province, was expected to produce 700 ct/m to the end of the year, and produce diamonds with an average value of $700/ct. Its grades were said to be five times higher than those in Rockwell's Northern Cape properties and the spatial distribution of the diamonds was found to be more consistent.
Further, Rockwell was also focused on reducing operating costs at its Klipdam mine, located in the Northern Cape, where the company had been able to shift mining to the paleochannel, which enabled the company to leverage more revenue on reduced operating costs.
The mine's diamond production increased by 31% year-on-year to 2 274 ct as a result of an improved overall size distribution and quality.
The Klipdam operation achieved a 27% year-on-year increase in volumes processed to 209 081 m3 for the second quarter, but fell short of the quarterly throughput target, owing to plant and mining limitations.
Meanwhile, Campbell also said he was “excited” about the company’s acquisition of the Jasper mine, next to its Saxendrift complex, located near the Middle Orange River, also in the Northern Cape province.
A first phase of trenching and exploratory work on the property in July/August, had recovered results exceeding the company’s expectations. Campbell said 18 stones of over 10 ct each were recovered, with seven stones exceeding 20 ct, including a 60.15 ct mackle and a clean 70.55 ct white, makeable rough diamond.
The company was now preparing to undertake a second drilling programme on the property, which would potentially extend the Saxendrift operation’s mine life.
Campbell also said the recent tension in South Africa’s mining industry, especially within the precious metals sector, had unnerved the international investor community.
“Even though it remains ‘business as usual’ within the diamond mining industry, I have encountered a negative perception among investors which has been created by repeated calls for nationalisation of mines,” he said.
This would make it more challenging to negotiate access to capital for potential future projects.
Meanwhile, Campbell believed that the softening of prices for the multitiered diamond market, including that of rough diamonds and luxury manufactured goods had bottomed out, with the fallout from the reduced prices having been “muted” on the company.
He believed that the overall market fundamentals were more positive than they had been since 2008, which would be beneficial for diamond prices.
Rockwell had a beneficiation profit share arrangement with the Steinmetz group, which saw reduced revenue in recent quarters.
“We would like to see the overall retail market blossom for beneficiation income,” Campbell said.
The company’s Toronto-listed shares closed at 26.5 Canadian cents apiece on Thursday.