JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed diamond miner Rockwell Diamonds has completed a positive preliminary economic assessment study for its Wouterspan alluvial diamond project, which is central to its Middle Orange River strategy.
The study indicated “positive economics, sufficient to take the project to the detailed design stage”, CEO James Campbell said in a statement on Wednesday.
The economic model yielded an internal rate-of-return of between 45% and 70% for a range of scenarios based on the key inputs. The net present value for the base case is C$91.71-million at a 15% discount rate, yielding a project payback period of 2.3 years from the start of construction or about 1.3 years from the start of production.
The project capital was estimated to be some C$42-million, including a 25% contingency.
The study assumed a plant with a capacity of 1 200 t/h, or 354 000 m3 a month.
Wouterspan is a key part of Rockwell’s strategy to process 500 000 m3 per month of high-quality gravels from the Middle Orange River region, with the Saxendrift and Saxendrift Hill Complex projects collectively processing 250 000 m3 a month and Niewejaarskraal expected to process 115 000 m3 a month.
“Completion of this study on Wouterspan is a critical milestone in Rockwell’s strategy to unlock the growth potential of its Middle Orange River projects. The property was successfully mined in the past using pan plants. We now have access to more efficient fit-for-purpose technologies such as the bulk X-ray system that we have incorporated into the new plant design,” explained Campbell.
Commenting on the potential socioeconomic benefits of the project, Campbell said: “While the construction of a new mine at Wouterspan would add significant positive impacts to the local economy, we also project the creation of some 300 new jobs in this region, which is troubled by high levels of unemployment. The plant design is based on continuous operations, running four shifts per day. This means that Wouterspan’s job creation potential is over and above the 93 jobs that were recently created at our Saxendrift Hill Complex mine, which is currently being commissioned.”