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Southern Africa deemed highly prospective for diamonds

20th May 2022

By: Nadine Ramdass

Creamer Media Writer

     

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Diamond exploration and project development company Botswana Diamonds regards Southern Africa as one of the most prospective destinations for diamonds globally.

The Kalahari region of Botswana has potential for a new diamond mine, while the Thorny River project, in Limpopo, South Africa, has potential for small kimberlite blows in historically mined areas.

Consequently, Botswana Diamonds is focusing on several smaller projects in the Botswana Kalahari region, and the Thorny River project.

The company also has a joint venture (JV) with mining and resource development company Vast Resources, in Zimbabwe, which has not had any fieldwork yet, says Botswana Diamonds MD James Campbell.

He explains that the company was drawn to Botswana because of its long legacy of successful diamond exploration and mining, as the country is one of the largest diamond producers in the world and is politically stable.

Botswana Diamonds regards the Kalahari desert as “the last frontier for diamond exploration in Botswana”, says Campbell.

The company made an offer to acquire the Ghaghoo kimberlite mine, in the Kalahari region, from diamond producer Gem Diamonds and aims to conclude the conditional acquisition of Ghaghoo this month, as it is in its third extension.

Botswana Diamonds is raising $4-million for the acquisition and, if successful, Ghaghoo will form the centrepiece of the company’s work in the Kalahari.

“We will then upgrade our work on KX36, which is an advanced project, and continue our work with exploration,” says Campbell.

The company acquired the KX36 deposit from diamond miner Petra Diamonds in June 2020 and has since acquired prospecting licences for exploration projects under its subsidiaries Sekaka Diamonds and Sunland Diamonds, as well as through its JV with mining company BCL mine group, Maibwe Diamonds.

Thorny River Project

In South Africa, the likelihood of finding large deposits is smaller. Therefore, Botswana Diamonds’ focus is on using very precise exploration techniques in areas where diamond mining has occurred.

It is using new technology for exploration to look for small kimberlite blows, which will yield higher grades and, therefore, offer higher diamond values.

In this regard, the Thorny River project’s conceptual mine plan was published at the end of last month and includes an analysis of the River Blow, which is a kimberlite pipe, and its extension, which indicates potential openpit options.

The plan assumes mid-range diamond values of $170/ct, mid-range costs of mining, a discount rate of 10%, a recovered grade of 40 carats per hundred tonnes and 1.7-million tonnes of kimberlite mined, all of which indicate that the mine is likely to be commercially viable.

Botswana Diamonds will conduct further drilling midyear – during winter, when the region is dry – on some of the additional targets on Thorny River in the hope that one or more of the targets prove to be commercial by the end of year.

This will allow for the mine plan to be updated and, thereafter, enable the company to apply for a mining licence.

Uphill Climb

Campbell states that technological breakthroughs enable exploration companies to explore regions more effectively, compared with exploration using traditional exploration techniques.

Consequently, while regions may have been explored previously, there are still opportunities for more minerals to be discovered and mined.

He adds that a challenge junior miners have to contend with is the difficulty of finding and implementing the latest technological trends that could assist their exploration efforts.

Therefore, exhibitions, such the Junior Mining Indaba, which will be held from June 1 to 2, in Johannesburg as well as virtually, are important platforms that bring together various companies in the industry to share insights on new trends and technologies.

Additionally, academic courses and institutions are also beneficial in providing junior miners with the latest research in geology.

A bigger challenge that junior miners face is raising investment, says Campbell.

As a result, exploration companies have to list on stock exchanges where there is a culture of investing in exploration and the financial community understands exploration risks. Botswana Diamonds, for example, is listed on the LSE, ASX and BSE.

However, attracting investment through the LSE has become more challenging because of the European Union’s introducing additional regulatory requirements as a result of Brexit.

Meanwhile, current diamond mines are getting older, which will result in a gradual decrease in supply, while demand is increasing as the world’s middle class grows and strives towards buying diamond jewellery.

While there has been speculation that laboratory-grown diamonds will result in reduced demand for natural diamonds, this is unlikely because natural diamond jewellery is regarded as a milestone, particularly for engagement and marriage purposes in some cultures.

Rather, laboratory-grown diamonds will have their own market segment in a similar way to the synthetic pearl, sapphire and ruby industries, concludes Campbell.

Edited by Nadine James
Features Deputy Editor

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