TIDMBOD
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
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 $170/ct
and a discount rate of 10%. Grade and diamond values are stated at
a bottom cut-off of +1mm.
Discounted Cashflow
NPV(10%)
Open Pit Strip Average Grade (Exclu ding capex
Ore Open Pit Waste Ratio Recovered and taxation)
Tonnes Tonnes Tw:To cpht US$'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
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
Michael Cornish
Roland Cornish +44 (0) 020 7628 3396
Beaumont Cornish Limited - Broker
Roland Cornish
Felicity Geidt +44 (0) 207 628 3396
First Equity Limited - Joint Broker
Jason Robertson +44 (0) 207 374 2212
BlytheRay - PR +44 (0) 207 138 3206
Megan Ray +44 (0) 207 138 3553
Rachael Brooks +44 (0) 207 138 3206
Said Izagaren +44 (0) 207 138 3206
Naomi Holmes +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
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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