Name of the Project
Tongo-Tonguma diamond project.
Location
The project is located in eastern Sierra Leone.
Client
Stellar Diamonds and Octea Mining.
Project Description
In September 2016, Stellar Diamonds and junior diamond developer Octea Mining proposed to combine their adjacent Tongo and Tonguma diamondiferous kimberlite dyke properties.
The results of an independent preliminary economic assessment (PEA) for the combined mining project has demonstrated a financially robust and high-margin project, with a 21-year life-of-mine (LoM). Only three of 11 kimberlite dykes on the properties have been categorised as resources to date – Tongo Dyke-1, Kundu and Lando – for a total of 2.2-million tonnes and 4.5-million carats at a +1.18 mm cutoff.
The PEA was prepared on the basis of an underground mining-only scenario.
The current underground mine plan is configured as a series of declines from surface at Kundu, Lando and Tongo.
The declines will be 4 m × 4 m in cross section and will be developed at an angle of 8°. Mining levels will be interspaced at depths of 35 m, with the first levels being developed at 40 m below surface.
Based on the current resource models, Tongo will have 11 levels, Lando 10 and Kundu 5 during the 21-year LoM.
The orebodies will be accessed by 2 m × 2 m drives and crosscuts into stopes mined using traditional overhand shrinkage stoping mining methods, with the ore being drawn from access points and transported on underground locomotives and tipped into bins on an ore pass system. These bins will feed haulage trucks that will transport the ore to surface and the processing plant.
The existing 50 t/h processing plant at Octea’s Koidu mine will be relocated to Tonguma and further upgraded to serve as the processing plant for the new mine. This will save considerable time getting the project to production.
Potential Job Creation
Not stated.
Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $172-million, and an internal rate of return of 49%.
Value
The project has an expected capital expenditure of $31.8-million.
Duration
First production is expected within 12 months.
Latest Developments
Stellar Diamonds has paid the Sierra Leone Environmental Agency $150 240 for an environmental licence fee for its Tongo project.
The payment of the fee is an important step in Stellar’s being issued the large-scale mining licence.
The mining licence has been approved by the Minerals Advisory Board subject to the issuing of the environmental licence. Once the environmental licence has been issued, the National Minerals Agency will draw up the Tongo mining licence for consideration.
Meanwhile, Stellar has agreed with diamond junior Octea Mining to extend the longstop dates of their agreements to October 31.
An independent preliminary economic assessment for the combined mining project has demonstrated a financially robust and high-margin project.
The current underground mine plan is configured as a series of declines from surface at Kundu, Lando and Tongo.
“The longstop date of the agreements with Octea has been extended to October 31, as we continue to progress potential project funding and complete other certain conditions precedent to the agreements,” CEO Karl Smithson has said.
Key Contracts and Suppliers
None stated.
On Budget and on Time?
Not stated.
Contact Details for Project Information
Stellar Diamonds, tel +44 20 7010 7686 or fax +44 20 7010 7699.