REG - Botswana Diamonds - Thorny River Open Pit Mining Evaluation

Botswana DiamondsAnnouncement

25/04/2022 07:01

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RNS Number : 1086J  Botswana Diamonds PLC  25 April 2022

25(th) April 2022

 

 

Botswana Diamonds PLC

("Botswana Diamonds", "BOD" or the "Company")

 

Thorny River Open Pit Mining Evaluation

 

Botswana Diamonds, the London AIM and BSE listed diamond explorer, is pleased
to announce the results of a conceptual open pit mine optimisation evaluation
("Evaluation") on the River Blow on its Thorny River property ("the Property")
in South Africa.

 

Highlights

·      An analysis of the River Blow and its extension indicates
potential open pit options.

·    Assuming mid-range diamond values of $170/ct, mid-range mining costs,
a discount rate of 10%, a recovered grade of 40cpht and 1.7M tons of
kimberlite mined indicates that a mine is likely to be commercial.

·    The results exclude any additional resources from adjacent targets
which will be drilled in the coming months.

 

Managing Director, James Campbell commented: "The purpose of this exercise was
to determine whether there was commercial potential in the Thorny River
discoveries. The conceptual open pit evaluation shows that even at low revenue
factors the kimberlite is potentially commercial when applying current
industry standard mining and processing costs. This exercise will be updated
following drilling on the adjacent high priority targets".

Chairman, John Teeling commented: "The Evaluation shows that there is
potential for an open pit mine at Thorny River and that there is the potential
for operational positive cash flow even at low levels of diamond recovery. We
will continue to work on the project including determining the capital cost.
We anticipate that drilling in the coming months will extend mineable
kimberlite volume".

 

Details

The Evaluation was completed by South African-based independent mining
advisory consultants, Practara (Pty) Ltd, together with modelling input from
ABGM Pty Limited of Australia. Conceptual open pit mine plan models were
developed under a number of scenarios to assess the open pit mining potential
of the River and River Extension blows (collectively "the River").  The
models used the results of several drilling programmes. Grade and diamond
value data was based on previous microdiamond and bulk sampling data as well
as production results from the adjacent Klipspringer mine and the Technical
Economic and Evaluation Report ("TEE Report") on the Thorny River Project as
announced in June 2018 (and which was a pre-scoping study analysis).  Cost
data was benchmarked against similar operations.

Shareholders should note that the Evaluation is preliminary in nature and was
prepared from drilling and geophysical modelling results and on which no
resource has yet been declared. The Evaluation is purely conceptual and
indicative of what could potentially be considered for more detailed work. The
Evaluation is based on pre-tax illustrative estimates of cashflow before
provision of capital expenditure or pre-production costs and which have not
yet been determined. The objective of the Evaluation was to identify the best
open pit mining option and considered low, medium, and high-cost scenarios for
mining.

The following graphic
http://www.rns-pdf.londonstockexchange.com/rns/1086J_1-2022-4-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1086J_1-2022-4-22.pdf)
 depicts the Evaluation's open pit models with the kimberlite for reference,
based on various revenue factors, for a mid-range ('medium') cost mining
operation applicable to a deposit of this nature.

The following are the illustrative results of the medium-cost scenario in the
Evaluation at a mid-range diamond value of $170/ct and a discount rate of
10%.  Grade and diamond values are stated at a bottom cut-off of +1mm.

 Open Pit Ore  Open Pit Waste  Strip Ratio  Average Grade Recovered  Discounted Cashflow NPV(10%)

                                                                     (Excluding capex and taxation)
 Tonnes        Tonnes          Tw:To        cpht                     US$'M
 1,187,334     2,286,459       1.93         20                       US$78.5
 1,601,003     3,774,640       2.36         30                       US$94.5
 1,702,550     4,559,875       2.68         40                       US$97.1
 1,743,335     5,031,522       2.89         50                       US$97.8
 1,754,394     5,197,872       2.96         60                       US$97.9

 

The TEE stated that the kimberlite exploration target at Thorny River area has
a grade of between 46 and 74 cpht and diamond value of between $120-220/ct at
a bottom cut off of +1mm. For the purposes of the Evaluation, a lower grade of
20 cpht was also considered. The River medium-cost scenario mining model
shows positive operational cash flow net present values for potential future
open pit exploitation options at a conceptual level. Any open pit that is
formed on the basis of a low revenue assumption (i.e. at revenue factors less
than 80%) coupled with the maximum open pit size are indicated to be
commercial. Additional survey work and in particular geological work to better
understand the level of dilution is required to further optimise these
conceptual mine models.  In the high-cost scenario, an average grade recovery
of only 20 cpht would not be economic.

The scenarios examined exclude any benefit of the Company's new contiguous
targets which were identified through a recent ground geophysics exercise and
are indicative of additional kimberlite blows.  Drilling of these targets has
the potential to add volumes and impetus to a 'hub and spoke' mining model and
this is scheduled for the dry Southern African winter season.  Following
this, the mine plan will be updated, and the capital expenditure assessed.
Subsequently, it is expected that mine permitting will then be sought.

 

 
______
_______________

 

Qualified Person

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, the Institute of
Materials, Metals and Mining (UK) and the Geological Society of South Africa
and who has over 35-years' experience in the diamond sector.

Practara (Pty) Ltd has reviewed the information in this announcement which has
been derived from the Evaluation and has confirmed that the information so
presented is balanced and complete and not inconsistent with the Evaluation.

 
______

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014. The person who arranged for the release of this
announcement on behalf of the Company was James Campbell, Director.

 

A copy of this announcement is available on the Company's website, at
www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)

Enquiries:

 Botswana Diamonds PLC

John Teeling, Chairman

                                        +353 1 833 2833
 James Campbell, Managing Director

                                        +27 83 457 3724
 Jim Finn, Director

                                          +353 1 833 2833
 Beaumont Cornish - Nominated Adviser     +44 (0) 020 7628 3396

Michael Cornish

 Roland Cornish
 Beaumont Cornish Limited - Broker        +44 (0) 207 628 3396

Roland Cornish

 Felicity Geidt
 First Equity Limited -  Joint Broker     +44 (0) 207 374 2212

Jason Robertson

 BlytheRay - PR                           +44 (0) 207 138 3206

Megan Ray

Rachael Brooks                          +44 (0) 207 138 3553

 Said Izagaren                            +44 (0) 207 138 3206

 Naomi Holmes                             +44 (0) 207 138 3206

                                          +44 (0) 207 138 3206
 Teneo

 Luke Hogg                                +353 (0) 1 661 4055

 Alan Tyrrell                             +353 (0) 1 661 4055

 Ross Murphy                              +353 (0) 1 661 4055

 

www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)

 

Glossary

 

 "cpht"   Carats per hundred tons
 "NPV"    Pre-tax net present value
 "TW:TO"  Tons waste : tons ore

 

 

Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as nominated adviser to
the Company in relation to the matters referred herein. Beaumont Cornish
Limited is acting exclusively for the Company and for no one else in relation
to the matters described in this announcement and is not advising any other
person and accordingly will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Beaumont Cornish
Limited, or for providing advice in relation to the contents of this
announcement or any matter referred to in it.

 

 

 

ENDS

 

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