ALROSA elects new Supervisory Board

Annual General Meeting of ALROSA Shareholders elected the new Supervisory Board on Wednesday, June 26.


Botswana courts Surat diamond manufacturers

Botswana, which is the second largest diamond producer in the world after Russia, has invited Surat diamond manufacturers to scout for business opportunities in the country.


ALROSA to allocate 100% of free cash flow for second half-year of 2018 for dividends

Annual General Meeting of Shareholders of PJSC ALROSA decided to allocate 100% of free cash flow for the second half-year of 2018 for the period-end dividend – RUB 30.3 billion.


De Beers diamond sales continue to weaken

De Beers’ diamond sales continued on a downward trajectory as demand remains weak, while supply for smaller and cheaper stones, is high putting pressure on polished prices.


India’s cut and polished diamond exports down by 15.12% in May

India’s exports of cut and polished diamonds decreased by 15.12% year-on-year during the month of May 2019 according to the provisional data released by The Gem & Jewellery Export Promotion Council (GJEPC).


Pangolin Diamonds using termites to find kimberlite indicators in Botswana

30 july 2018

leon_daniels_xx.jpgIt is not a secret that the rate of kimberlite discovery in Botswana has dropped considerably and research has shown that termites can help diamond explorers have an understanding of the transport mechanism of kimberlite indicator minerals from the kimberlite to the surface.

Studies have also shown that the concentration of indicator minerals at surface was directly dependent on the physical characteristics, capabilities and behavioural patterns of termite species common in the exploration area.

Pangolin Diamonds chief executive Leon Daniels told Rough & Polished’s Mathew Nyaungwa on the sidelines of a mining conference last month in Gaborone that the company has for the past few years been using termites in its diamond exploration activities.

He said they were starting to see results, although it will take some time before they make some discoveries.

Below are excerpts from the interview.

How are termites helping you in your kimberlite exploration activities in Botswana?

In Orapa, for example, you get macro-termites (inaudible) and they have a very high workload, they build these very high big termite hills, they move an enormous amount of earth, but those termite hills have a single focal point, so they build up the concentration in that point. When the termite nest dies down that termite hill weathers down and spreads the indicators, but it's local, right? If you take (inaudible) the one that really gets into your woodwork and chews up your door and everything very quickly, they discard their waste at little holes above surface, the near-surface below ground, so they don't cause these high concentrations at a single focal point, they discard one indicator here another one there, that kind of thing. There was one research programme where the researcher counted the number of vent holes in 1 hectare and he found 139. So instead of having one hill concentrating … you've got 139 tiny little spread points in that hectare. So, when you go and sample it, you are sampling a hectare that is 10,000 square meters. When you take a [regular] sample, you are sampling maybe 5 or 10 square meters, you know… and you only going to get a very low indicated count. So that's the first thing to understand. Then the second thing is that we actually look at the texture, the surface texture of the indicator that we find. And if that surface texture says to us that that indicator has been in contact with kimberlites and hasn't been transported very far to weather that texture off, then we know we should be within 500 meters of the kimberlite.

So, have you made any progress with this method?

Yes, but there's one step further, let's first go one step further. So, because to the very low counts, what we did was we started sampling the same position, the same grid at the same GPS controlled positions over and over again, every month, in the last week of the month, we go and sample those same positions, we process those samples and then for each sample site, we add up the indicators month after month that's recovered from that site to get a total for that site, not total per sample, but total for that site. And then we plot that up and so eventually we can start seeing a pattern forming where we get the most indicators and when we get no indicators so that's the process that we are following. Have we gotten something? Yes! The problem is there are many potential sites, but we only started this programme two years ago. We are the first company that has even attempted to do something like this. We are starting to see results where we believe we are going to make some discoveries, so we think it's the right path to follow.

Someone argued that for Botswana to remain a top diamond player there is need for the country to find one or two, tier-one diamond deposits. Do you agree with that notion as a junior company?

Well, I don't think discovering the next big kimberlite is necessarily in the private domain of a large company, currently it is DeBeers that is a large company doing exploration here. The problem is they're very few companies actually still doing exploration. I am a bit puzzled by the definition that tier-one is a $20 billion [revenue] and tier-two is 400,000 carats per year. It depends on the quality of the diamonds that you find. 400,000 carats per year can also be $20 billion revenue, you know in the deposit, so I don't know how they changed the definition from one measurement yardstick to another one. Having said that, if Karowe is a tier-two, is it a tier-two because of the high value diamonds it gets? Is it a tier-two because of the high dollar per carat price or is it a tier-two because it's got a grade at the moment of 12 to 13 cpht? It was only 7 hectares in size and I think there are still 10 hectares kimberlites to be discovered with a higher grade. So, tier-two, I don’t see a problem, but tier-ones, there's only seven in the world you know, the odds are very thin. But it's not impossible. It's only impossible until the next one is found.

You previously suggested that there is need for a mind shift in diamond exploration as there is no easy way anymore. Can you elaborate on that?

The obvious high concentration indicator anomalies have been found and the kimberlites associated with them. Most of the perspective countries have been covered by aeromagnetic surveys, those targets have been drilled and have been found so you're now sitting with a situation that they are no inexpensive way of finding kimberlites in the sense that - as you have seen my presentation - the number of indicators is decreasing, so the old method of soil sampling doesn't work anymore. The inexpensive way of using airborne geophysics doesn't work anymore. De Beers is now flying a big aeromagnetic survey, but you know, it's only companies like De Beers that can afford that. Junior companies can't afford that, so we have to change the way of thinking and so that's where Pangolin Diamonds has gotten involved with understanding the termite species working in the area…

Why is there little exploration taking place in Botswana?

Actually, we don’t have few companies involved in diamond exploration in the country, there are an enormous number of licenses issued to numerous companies. You just need to get the prospecting license map for precious stones from the (minerals) department to see that, but almost none of them do any exploration.

Why is it like that?

It's extremely speculative, I mean that's the nature of all kinds of exploration. It's extremely speculative. It's high risk, and it's extremely difficult to raise capital to do that exploration. I mean, it's as simple as that. If we can get the government to say listen all you pension funds put 0.1% of your money into a high-risk exploration. Yes, it's high risk so only 0.1%, you might lose it all, but you know, eventually one will be found, and they'll recover everything plus. So, it's a tough business, you know, in terms of getting the capital.

How are you coping given the funding challenges?

We have very good investors that believe in what we do and so they kindly keep on providing us with capital, but we don't spend a lot of money, you know, I think I'd be surprised if we are not the most cost-effective exploration company in the world in terms of the amount of capital we have, the amount of samples we collect and process, the number of targets we cover with geophysics. We drill two to three times a year.

What is your annual budget?

If we manage to raise C$600,000 a year, we can squeeze by on that.

So, are you looking beyond Botswana?

No, it's the best address. Why go [elsewhere]? You want to be in high street. There's no question on my mind, it's the best address.

So, should you find something economical, would you want to become a producer?

Very much so, but then at the same time one has to consider that, as I always say, big projects kill small companies, you know, and so if you find something as big like a 12-13 hectares kimberlite it's going to be difficult for a small company like us to develop it so we would probably go into partnership with somebody else in order to come in and you know we are explorers, we are not miners. I have done mining, I have turned two kimberlites into mines, I understand what it requires, I understand the metallurgy, the mining, everything, but in my heart, I do exploration, you know, not mining.

Which one of your projects do you think is capable of coming on stream soon?

None. It takes time to come on stream. I would say we are probably between two and three years from coming on stream with anything.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished