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30 september 2019

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Botswana Diamonds, which has a 40% stake in Thorny River, through Vutomi, said there are plans to expand the project located in South Africa to include Marsfontein once a mining permit for the latter has been awarded.

Company managing director James Campbell told Rough & Polished’s Mathew Nyaungwa in an exclusive interview that the integration is due to the common geology and currently contiguous boundary.

The worked-out Marsfontein diamond mine was host to eluvial diamond deposits running at grades of 1,433 cpht.

Botswana Diamonds said last June that Vutomi's application for a mining permit over a portion of the Marsfontein farm was accepted by the authorities.

The company also recently signed an agreement with Eurafrican Diamond Corporation to contract mine Marsfontein diamond bearing gravels and residual stockpiles.

Below are excerpts from the interview.

Botswana Diamonds recently identified five target areas within the Thorny River project. Is this your eureka moment?

We have been long looking for a technique which would allow us to discover kimberlite pipes which may have been partially or wholly masked by the background dolerite dyke swarm. The iconic Marsfontein Mine, which had a payback of [about four] days, was partially masked by a dolerite dyke and is immediately adjacent to the company’s Thorny River project in exactly the same geological environment.

We are confident that we have found an approach with our partners, Subterrane, who have developed their own proprietary tools to discriminate kimberlite pipes, which may be wholly or partially obscured by dolerite dykes.

How far have you gone with your bulk sampling project at Thorny River?

Trenching by the company has identified a ‘hotspot’ at Thorny River with a thick kimberlite intersection of four metres wide, suggesting a ‘kimberlite blow’. 256 carats of rough diamonds have already been recovered from re-commissioning the processing plant.

Are you still on course to bring the Marsfontein dumps and gravels into commercial production by the fourth quarter of 2019?

From a commercial perspective, focus has shifted on detailed planning for commercialising the Marsfontein dumps and gravels which subject to customary regulatory approval will be in production by the fourth quarter of this year. Once we have reached steady state operations we will expedite our bulk sampling programme on the current Thorny River project site.

The company has signed a mining agreement with Eurafrican Diamond Corporation (EDC) to contract mine the diamond bearing gravels and residual stockpiles on a portion of the farm Marsfontein. The agreement gives EDC a contract for the mining and processing of the identified deposits on the Marsfontein Mining Permit, with 25% of the pre-tax revenue from larger or high value special stones (any stones weighing 10.8 carats or more or valued at more than $8,000 per carat) and 15% from the standard run of mine stones accruing to Vutomi. The Thorny River project will also expand to include Marsfontein once the Marsfontein Mining Permit has been awarded due to the common geology and currently contiguous boundary.

What is the level of interest in your South African operations by local fund managers?

The level of interest in any exploration or development project (that is prior to Feasibility Study) is sadly almost non-existent by South African fund managers. However, we continue to have sound support from our shareholders as well as those London institutions which specialize in investing in exploration and development companies.

What is the state of your exploration projects in Botswana?

We recently announced that Prospecting Licences PL232 and PL235, held by the Company’s wholly-owned subsidiary Sunland Minerals (Pty) Limited in Botswana have been renewed for an additional two years to 30 September 2021.

These key licences, covering just over 500sq kms, are strategically located in the central Kalahari Desert west of the Ghaghoo diamond mine and where the company has already identified prospective drill ready targets. The intensive work included aeromagnetic surveys, ground magnetic surveys, soil sampling and target selection.

Analyses of concentrations of Kimberlitic Indicator Minerals (KIM’s) on the licences indicate proximity to kimberlite pipes, which regional geology suggests may be attractive in size and grade.

The company is already in extended discussions with a major international diamond producer to joint venture the next phase of work on these strategic licences.

What is your interest in the Marange project that your partner Vast Resources is involved in?

As previously announced, Vast has exclusive access to key diamond concessions (Chiadzwa community diamond concession, formerly Heritage Concession) in the Marange diamond fields of the Chiadzwa region of eastern Zimbabwe, through an agreement with a community organisation. The terms of the agreement are as follows:

• A Special Purpose Vehicle (‘SPV’) between BOD and Vast to develop diamond resources in the MDF.

• Initial shareholdings will be BOD - 13.33% and Vast - 86.67%.

• Vast will contribute up to US$1 million as initial funding.

• If any additional funds are required, this will be via an equity raise.

• BOD and Vast may contribute to any future equity raise on a pro rata basis. If either party does not take up its allocation, the other may.

The concession… is 6,913 hectares in surface area. The property contains several targets for modern alluvial diamond placer deposits. The grades of the known modern alluvial placers which drain the Marange diamond fields range in grade from 50-500 carats per hundred tonnes (cpht), most typically 100–200 cpht. There is also potential for remnants of the basal Umkondo (conglomerate) unit in the concession, which runs at grades from 100-3,000 cpht elsewhere in the Marange Diamond Fields.

Outside the eastern edge of the property is the closest known diamond mine within the Marange diamond fields. Situated within Block E2, the deposit was discovered and operated from late 2010 until 2016. Records indicate an average stone size of about 5 cts/stn and an average diamond value of about $80/ct from this block. It is generally estimated that over 60 million carats have been recovered from the entire Marange diamond fields to date.

The next steps will be to investigate the potential of the modern alluvial diamond deposits and of the older conglomerates on the property. Assuming positive results, the field work will be closely followed by drilling, pitting and bulk sampling which will form part of a pre-feasibility study and this may entail further funding beyond the initial $1 million committed to the programme by Vast.

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