Gem spends P720m to bring Ghaghoo on stream
Staff Writer | Friday August 22, 2014 13:49
Apart from Karowe in Boteti, Ghaghoo, which will be officially opened on September 5, will be the country’s only other operating diamond mine outside the Debswana stable.
“$10.8 million was invested in Phase one development costs at Ghaghoo, bringing the total spending on the development at the end of the period to US$82.0 million out of a budgeted US$96.0 million. The balance of all costs associated to complete Phase one will be spent during the second half of 2014,” stated Gem in their 2014 first half results.
According to Gem Diamonds, 2,400 carats have been recovered up to June 30, 2014 during the commissioning of the plant.
Included in these carats produced are a 20-carat and two 10-carat diamonds (during the exploration phase, the largest diamond recovered was 7 carats). Optimisation of the treatment plant process is ongoing during the commissioning phase.
Gem has said that three production tunnels are progressing within kimberlite on the first production level, Level one at 154 metres below surface, whilst an exploratory tunnel and training stope have been developed in the kimberlite on Level 0 at 130 metres below surface. The mine is being developed by the company’s wholly owned subsidiary, Gem Diamonds Botswana, which is the holder of a 25-year mining licence, awarded in January 2011. Under the first phase of the development project, confirmation of the grade, diamond prices and the recovery processes would be sought, including the use of autogenous milling expected to increase diamond liberation.
“Results from Phase one will underpin a study aimed at defining the way forward for mining at Ghaghoo,“ said Gem.
Gem Diamonds acquired rights to Ghaghoo from De Beers and Xstrata in 2007 for US$34 million. Studies estimate that Ghaghoo has a total carat resource of 20.5 million carats at an average of US$162 per carat with a total in situ value of US$3.3 billion.
A sale of Ghaghoo’s initial production is scheduled to take place before the end of the year. According to Gem, the second half of the year should see strong pricing maintained.
The group continues to see robust long-term support for diamond prices with continued growth in demand from non-traditional markets in Asia and strength in traditional markets alongside limited growth in supply.