Botswana Diamonds PLC Advancements Towards Diamond Production (5354G)
November 07 2018 - 1:00AM
UK Regulatory
TIDMBOD
RNS Number : 5354G
Botswana Diamonds PLC
07 November 2018
7 November 2018
Botswana Diamonds PLC
("Botswana Diamonds" or the "Company")
Botswana Diamonds advances towards diamond production
The board of Botswana Diamonds (AIM: BOD) are pleased to provide
an update on the Company's development plan for the Thorny River
project in South Africa.
Highlights
-- A mining contract has been concluded with Palaeo Minerals Pty
Limited ("Palaeo") covering both bulk sampling activities and
future full-scale mining (the "Contract").
-- The Contract will enable the Company to self-fund the Thorny
River project from bulk sampling through to mine development,
assuming positive results.
-- Indicated net royalties could be between US$2 to US$7 million
annually based on current estimates.
-- The necessary regulatory approvals have been applied for.
-- Drill programme planned in 2019.
Following the release of a Technical and Economic Evaluation
Report on Thorny River in June 2018, the Company and its partner
Vutomi have been considering a number of options to advance the
property, concluding with the Company signing the Contract with
Palaeo to provide bulk sampling and potentially mining services to
the project. Palaeo is an experienced mining contractor which has
several mining contracts in South Africa and Zimbabwe.
The key terms of the Contract are as follows:
-- A net revenue royalty of 12% will accrue to Vutomi.
-- 8% will accrue to Vutomi to cover State Mineral Royalties, sales and security expenses.
-- 80% will accrue to Palaeo to cover its mining and processing costs.
-- A processing target of up to 30,000 tons of kimberlite per month.
-- Diamonds will be recovered using a processing facility at a nearby diamond mine.
Modelled diamond grades and value ranges were reported in
February 2018 (46-74 cpht and US$120- US$220 per carat respectively
over the estimated volume of 1.2 to 2.1 million tonnes of
kimberlite to a depth of 100m). Assuming optimum kimberlite
processing, the annual benefits of the contract over the 3 to 6
year mine life of Thorny River could potentially be between US$2 to
US$7 million annually.
Regulatory approvals from the South African Department of
Mineral Resources have been applied for.
An advance in-fill drilling programme will allow detailed
planning prior to commencing bulk sampling and the revenue and
information from this project will enable the Company to consider
further long-term options for Thorny River and the surrounding
kimberlite field.
John Teeling, Chairman, commented, "We are confident that Thorny
River could be the first diamond producing project for Botswana
Diamonds. A royalty bulk sampling / mining model means that we have
no capital expenditure apart from a limited in-fill drilling
programme in early-2019. We anticipate the award of the necessary
regulatory approvals in anticipation of revenue being generated
during the course of 2019. I look forward to providing shareholders
with further updates regarding Thorny River in due course."
This release has been approved by James Campbell, Managing
Director of Botswana Diamonds plc, a qualified geologist
(Pr.Sci.Nat), a Fellow of the Southern African Institute of Mining
and Metallurgy, a Fellow of the Institute of Materials, Metals and
Mining (UK) and with over 33-years' experience in the diamond
sector.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
ENDS
Enquiries:
Botswana Diamonds PLC
John Teeling, Chairman +353 1 833 2833
James Campbell, Managing Director +27 83 457 3724
Jim Finn, Director
Northland Capital Partners Limited
David Hignell / Dugald Carlean
(Corporate Finance) +44 (0) 203 861 6625
Isabella Pierre (Broking)
SVS Securities Plc +44 (0) 203 700 0100
Tom Curran
Ben Tadd
Blytheweigh +44 (0) 207 138 3204
Simon Woods +44 (0) 7466 439 633
Julia Tilley +44 (0) 7815 068 387
Teneo PSG
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
www.botswanadiamonds.co.uk
Follow us on Twitter @BotswanaDiamond
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END
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