P240 Million Profit Expected From Ak06 Mine

By Brian Benza
Staff Writer | Monday February 8, 2010 00:00

 

Speaking at a shareholders meeting in Gaborone last Thursday, AF Diamonds Chairman John Teeling said that following the end of their dispute with diamond giant De Beers, the mine is now scheduled to come on stream in 2011 with the full year of production expected in 2013.' At full production, AK06 will each year produce around one million carats of diamonds expected to realise over 200 million in revenue.

The added advantage with our new partners, Lundin group is that we will be able to market around 400,000 carats ourselves, a provision which we didn't have under the partnership with De Beers,' he said. AK06, which was discovered by De Beers in 2004, is a 9.5-hectare Kimberlite pipe grading 22 plus carats per tonnes containing high value diamonds. It has an indicated open cast resource of upto 372 metres, which translate to about 8.9million carats.

Apart from AK06, the company has two other prospecting licences in the same area, AK8 and AK9.AK8 is a 5-hectare kimberlite containing an estimated 20 million tonnes of ore to a depth of 300 metres below surface, grade of 3 to 7 carats per hundred tonnes (cpht) and a modelled diamond value between US$35 to US$190/ct. AK9 is a 3-hectare pipe containing an estimated 11 million tonnes of ore to a depth of 250 metres below surface, grade of 2.5 to 3.5 cpht, but insufficient carats have been recovered to provide a fair diamond valuation.

Teeling says that although their kimberlite is relatively small, compared to Orapa's 160 hectares, Ak06 is peculiar as it contains the highest known percentage of Type 2 diamonds. ' Type 2 diamonds are extremely valuable large nitrogen free diamonds and only two percent of all diamonds in the world are Type two. We are going to have an open cast mine for at least 12-15 years and thereafter we shall go underground largely in search of the valuable blue diamond,' he said.

However, before the actual operations resume, Teeling still has to source US$5 million to take African Diamonds stake in the mine to 40 percent. Commenting on the diamond market, Teeling says a significant supply shortfall is expected in 2012, which will drive demand while destocking of cutting centres, and return of bank finance will stimulate demand for rough.

 'Right now rough prices are just 10 percent of the all time high price and they are still increasing. The future is even more promising with a market size of 600 million Chinese ladies and 180 million in Brazil,' he added.