JOHANNESBURG – The Lucara Diamonds and African Diamonds joint venture (JV) Board has approved the development of the AK6 mine in Botswana, where production will start by the end of next year, the companies announced Tuesday. TSX Venture exchange-traded Lucara is operator of the project and has a 60% interest in the project with Aim-listed African Diamonds holds a 40% interest.
The diamond business, which an updated feasibility study for AK6 received, said the project engineering was awarded to DRA Africa and that the work started immediately.
A proposal included in the updated study was a process plant, in an initial throughput of 2.5-million tons a year and then increase capacity to four million tonnes per year after four years.
“This phased production approach, combined with the mining contract reduces the up-front capital requirement,” said African Diamonds MD James Campbell.
Furthermore, the revised mining plan called for a smaller number of carats of diamonds produced at a higher value. The indicated resource at a 1.5-mm below cut has an average grade of 16 ct for every hundred tons of powder and the average price of $ 243/ct diamond 0 m to 400 m. The bottom of the pit is 324 m above ground and would be mined over a 11-year life.
The present study showed that the first phase investment of $ 120 million, making the process of planting, all my site and off-site infrastructure plus a 13% contingency included requirement.
Campbell said the new $ 120 million price tag was an increase over the conceptual value engineering study that was done earlier.
The significant differences included a 25% increase in throughput, which accounts for a $ 14-1000000 euros to increase foreign exchange and escalation, for a $ 20 million increase and changes in scope that the price hiked by a further further $ 20 million. The most notable changes in scope were the addition of a pebble crushing circuit and the increase in indirect and housing.
Operating costs over the life of the mine were estimated at $ 17.20 per tonne of ore treated. The most significant increases in operating costs were factoring in higher electricity costs and currency movements.
Campbell said that consultation with the banks to finance the project in motion were put on offer.
Meanwhile, African Diamonds also reported that an agreement was reached with the government of Botswana that the joint venture, Boteti Mining may its entire production of diamonds to sell through public tender and / or exclusivity contracts negotiated.
The company noted that a number of proposals from diamond aires already received and being evaluated.
“We are pleased that the marketing terms used in the mining royalties been satisfactorily addressed by the Government of Botswana and that sound progress is made towards raising to finance the project,” said Campbell.
Meanwhile, said African Diamonds Diamonds Kukama Ribson Gabonowe CEO has been appointed as CEO of Boteti.
Kukama is the wholly owned subsidiary of African diamonds in Botswana.
source:miningweekly
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