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Exploration company seeks out potential new sites in Botswana

21st February 2014

By: Ilan Solomons

Creamer Media Staff Writer

  

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Aim-listed diamond explorer Botswana Diamonds (BOD) aims to identify further diamondiferous kimberlite pipes in Botswana this year, chairperson John Teeling tells Mining Weekly.

He says the company’s joint venture (JV) exploration project with Russia-based diamond company OJSC Alrosa’s subsidiary, Sunland Holdings SA, will initially focus on a drill work programme at the 2.9 km2 PL117 2012 licence area in Orapa, Botswana.

“This is an area where we drilled and discovered diamondiferous kimberlites. The JV team will carry out further soil sampling, and geophysical and geochemical work to define exact drill targets, with drilling expected to start before the end of the first quarter of this year,” says Teeling.

BOD commercial director Robert Bouquet says the JV is still within its $1-million budget for this year, which will be spent on developing PL117 “and several other high-potential areas identified by the JV”.

Further, Teeling highlights that all BOD’s exploration projects support localisation by employing local staff and service providers.

“We have always applied this policy and it has been successful and rewarding for the company and the staff,” he says, adding that the company employs five permanent staff members to conduct exploration activities.

Project Development

Before signing off on the JV with Sunland Holdings in mid-2013, BOD’s team identified the high-priority PL117 site, which it negotiated for with its licence holder, the privately owned Eversharp Investments, in early 2013.

“Soon after, we undertook the preliminary exploration work on the site,” says Teeling.

He adds that BOD’s management team already had ample information about the PL117 area, as the company’s predecessor, African Diamonds, drilled the location between 2004 and 2007 as part of a JV with diamond company De Beers.

Meanwhile, Bouquet says it is too soon to provide a resource volume for the company’s licence areas, including PL117.

“However, the last time we reached this point in exploratory investigation work was when we discovered the Karowe diamond mine in north-central Botswana in 2006, which originally presented 35 carats for every 100 t of ore.”

He points out that the Karowe claim was subsequently sold to Canadian precious stone miner Lucara Diamond Corp in June 2010, which currently mines the site.

Lucara announced in December that it intended to upgrade the potential on-site volume by $1-billion of high-quality diamonds, which Teeling believes demonstrates the potential wealth that PL117 could hold in terms of diamond deposits.

“At the time, drilling identified about 2 ct for every 100 t. However, through tests conducted using its own analysis and geological technologies, Alrosa believes the diamondiferous kimberlite to be adjacent to the original drilling area.

“We are excited. We know there are diamonds in this location, as we have already discovered them on the licence claim. “We therefore look forward to an exciting couple of months as we further our work programme and drill out the target,” Bouquet says.

Further, Teeling highlights that, while other exploration companies are struggling to secure funding for new projects, owing to the global financial downturn, BOD has sourced sufficient funding to the value of £600 000 through its JV with Alrosa, which is the largest diamond company in the world.

“We also have multiple licence applications with the Botswana Department of Mines, which we hope will be approved . . . this year,” he states.

Mitigating Challenges

Apart from securing funding, Teeling says accessing the right ground to explore remains a significant challenge for the BOD.

“The process is painfully slow at the Botswana Department of Mines, in Gaborone, and, despite having lodged 25 separate prospecting licence applications, we have had limited success until now,” he tells Mining Weekly.

Teeling stresses that exploration is at the bottom of the mining industry’s food chain in terms of finance, hence, greenfield exploration projects were affected first when the 2008 financial crisis struck.

“Investors prefer more near-term returns, which is why exploration suffers,” he laments.

Other Exploration Activities

Teeling says that, while Alrosa was primarily focused on the Orapa region last year, it also analysed the Gope area of Botswana, located in the Kalahari Game Reserve, which means that environmental considerations are paramount.

“The area is highly prospective. London-listed diamond producer Gem Diamonds’ Ghagoo underground diamond mine, about 45 km from the eastern border of the Kalahari Game Reserve, is expected to come on stream later this year,” he notes.

As a JV partner with the relevant licence holders, BOD can potentially earn a 51% interest in the Gope block through its $940 000 contribution to the project, if substantial diamond and kimberlite discoveries are made in the licence areas.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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