Lerala Mine reopening deferred

Brian Benza | Thursday April 17, 2014 14:10

 

But in a statement this week, Kimberley says it has now called off a proposed placement of some 30 million shares, as the board was conscious of unnecessarily diluting its existing shareholder base, given the pricing levels currently available.

“The re-commissioning of the Lerala Diamond Mine, in Botswana would be postponed until funding became available, either through cash flow or external sources. The company has been presented with alternate, non-dilutive options to fund its development programme, which the board would now consider,” the statement said.

Currently, Kimberley Diamonds has a cash balance of about A$9.7 million (P82 million) with no debt. The company says it is fully funded to support its existing operations. Kimberley Diamonds had targeted yearly output of 400,000 carats annually from Lerala over the next six years.

The mine in the Central District, was placed on care and maintenance in July 2012. It has five diamondiferous kimberlite pipes totaling 6.66 hectares, a 15-year mining licence and a 230-tonne per hour processing and recovery facility.

Citing a weak diamond market, Mantle placed Lerala Mine under care-and-maintenance in July 2012 after only five months in operation, throwing about 100 people out of work.

The UK based Mantle Diamonds had bought Lerala from another Australian miner, DiamonEx in 2011. In February, Kimberley Diamonds had said the project is ready to be re-commissioned following the execution of engineering improvements designed to further enhance recovery and to reduce operating costs.

The improvements, which include the purchase of a new diamond sorter and optical waste sorter, would cost $10 million.

Between February and July 2012, the mine produced 73,403 carats from 0.26 million tonnes of ore before being decommissioned. Lerala is estimated to have a remaining mine life of seven years and an estimated remaining resource of 12.18 million tonnes, at 25.52 carats a tonne.