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Prospects for discovering new diamond deposits in the Arkhangelsk Province are far from exhausted

07 october 2019

ALMAZINTECH is engaged in technical auditing and comprehensive assessment of activities performed by exploration, diamond mining and gold mining businesses in Russia and other countries, as well as carries out research and development. It employs highly qualified specialists in mining and geology, who have implemented a number of important projects in their fields. Konstantin Godun and Sergey Bezborodov, who are deputy general managers of the company, told Rough&Polished about ALMAZINTECH’s business.

konstantin_godun_eng.pngPlease, guide our readers through all the aspects of what you are doing in your company.

Almazintech Consulting and Engineering, LLC (ALMAZINTECH) was established by the members of the Pioneer Group of Sociedade Mineira de Catoca in 2002. The company is headed by Valery Kondratyev. Its activities are focused on the comprehensive development of mining - from geological exploration to finished products.

The company's geologists took part in the development of exploration projects and in the exploration of dozens of diamond deposits: in Yakutia (the local kimberlite pipes including Udachnaya, Zarnitsa, Aikhal, Komsomolskaya, Yubileynaya, Mir, Internatsionalnaya, Novinka, XXIII Party Congress, Gornoye, Nyurbinskaya, Botuobinskaya and others); in the White Sea coastal area in the Arkhangelsk Province (the kimberlite pipes of the Lomonosov diamond field); in Angola (the Catoca kimberlite pipe and others).

In its work ALMAZINTECH uses modern cartography methods (air, mobile and ground laser scanning in combination with digital aerial photography), organizes surveys, conducts geophysical (electrical exploration) surveys; seismic exploration; parametric studies in wells; applies ultrasonic and acoustic research methods; electrodynamic logging in geological exploration, and also processes their results.

ALMAZINTECH’s specialists developed an underground mining system with a non-hardening backfill. The company’s miners have experience in using modern technologies in surveying (aerial survey methods and the Macromine software), as well as in optimizing mining operations (building pit walls with optimal parameters for the open pits on kimberlite pipes Mir, Aikhal, Udachnaya and Internatsionalny, XXIII Party Congress, Novinka, Catoca and others).

The company’s engineers conducted research and filed a number of patents on ore concentration techniques and methods (“Method for identifying diamond crystals” - No. 2329489; “Method for separating diamond-containing materials” - No. 2336127; “Method for processing diamond-containing ore concentrates and chemical cleaning diamond surfaces” - No. 2286945).

excl_07102019_catoca.png
The diamond mine quarry on the Catoca kimberlite pipe (Republic of Angola)

ALMAZINTECH’s technological specialists developed a number of modern techniques based on X-ray luminescence for concentrating kimberlites at Internatsionalnaya and Arkhangelskaya diamond pipes, for thermochemical processing of diamond-containing concentrates at Nyurbinskaya, organized the design, construction, launch and technological adjustment of processing plants at the Nyurbinskaya, Arkhangelskaya and Catoca diamond fields.

Under our belt we have the practical experience of building and launching projects in Yakutia (OJSC ALROSA-Nyurba), in the Archangelsk Province (OJSC Severalmaz) and in Africa (Catoca).

The ALMAZINTECH Group of Companies includes Almaztekhproekt LLC established in 2003, which carries out feasibility studies and design work.

In 2008, ALMAZINTECH established a subsidiary, which is GeoTestService Scientific and Production Enterprise, LLC to determine the properties and technological parameters of materials (primary, placer and man-made ores) for radiometric concentration. This technology allows reducing the amount of ore fed to grinding and subsequent concentration by up to 50% or more.

ALMAZINTECH has experience in attracting investment to large-scale mining projects. It is the owner of two mining projects for lode gold in the Kyrgyz Republic, to which it attracted funding for geological exploration on the London Stock Exchange.

excl_07102019_electromagnetic_survey.jpgGeological airborne electromagnetic survey of diamond deposits in the Russian Federation  

The company operates in the Russian Federation; in Angola, West, Central and South Africa; in the CIS countries - Kyrgyzstan, Kazakhstan, Armenia, Tajikistan; in Indochina - Vietnam, Laos; in America - Canada, Venezuela, Chile and in other countries.

Our major customers include Central Asia Gold AB, Catoca, Polyus (LSE, MOEX - PLZL), Petropavlovsk, GV Gold, ALROSA, Arkhangelskgeoldobycha, ALROSA-Nyurba, Severalmaz, Polyus Gold, Russian Platinum and others.

The company employs specialists who have worked in the diamond mining and geological industry from 25 to 40 years.

Our activities result in impeccable business reputation and in taking part in the most important and essential projects implemented by the diamond industry in this country and in the Republic of Angola. 

excl_07102019_udachnaya.pngThe diamond mine quarry on the Udachnaya kimberlite pipe (Republic of Sakha (Yakutia), Russian Federation)

What were your most successful projects while you worked with diamond mining companies?

These include the research on developing the procedure for final finishing of diamond concentrates and cleaning the surface of diamonds contained in the ore from the Nyurbinskaya pipe, as well as the development and testing under industrial conditions of a semi-industrial automated installation for cleaning diamond-containing concentrates at Concentration Plant No. 3 of ALROSA’s Mirny Mining and Processing Division.

The company has completed the design study of an automated water treatment unit for the X-ray luminescent separator installed on the 1st stage of the Catoca factory.

ALMAZINTECH carried out an expert assessment of reserves and resources, technological and technical condition of the mining enterprise at the Letseng diamond field (Kingdom of Lesotho).

Having received an order from Zarubezhgeologiya, ALMAZINTECH took part in the preparation of a final report on the results of exploration for primary and placer diamond deposits at the Cacolo concession (Angola).

ALMAZINTECH analyzed and evaluated the geological surveys performed by MSA Geoservices (PTY) Ltd. in 2008 at the Driekoppies concession (South Africa) based on the presented materials. The company evaluated the economic feasibility and possibility of further exploration and development of the project with its transition to the operational stage. Based on this evaluation, a presentation brochure was compiled.

excl_07102019_catoca_concentrator.pngFactory No. 1 at the diamond mine on the Catoca kimberlite pipe (Republic of Angola)

At the invitation of Arkhangelskgeoldobycha, ALMAZINTECH took part in the process of sample concentration during geological exploration of the Grib diamond-bearing pipe. We carried out the acceptance of modular sections for finishing the concentration plant by monitoring the cold start at BATEMAN in South Africa, including the DebTech X-ray luminescent separators and then monitored its installation and operation during the entire period of sample processing.

The company also completed the research work at Concentrator No. 1 of the Lomonosov Mining and Processing Division of OJSC Severalmaz to optimize the technological indicators and coordinate the work to obtain initial data for a technical assignment and design of a concentration plant with a capacity of 5.6 million tons of ore per year and for adjusting its technological pattern.

ALMAZINTECH in team with Irgiredmet, OAO carried out a comprehensive testing of the technological scheme and X-ray luminescent separation unit of the factory and provided scientific and engineering assistance to improve quality indicators. The companies selected optimal operating modes and developed technological maps for the X-ray luminescent separators used by the factory.

Having received a work order, ALMAZINTECH carried out an expert feasibility study for exploration and production within the Muno-Olenek licensed area of Yakutia.

excl_07102019_mir.pngThe diamond mine quarry on the Mir kimberlite pipe (Republic of Sakha (Yakutia), Russian Federation)

How does your company assess the risks associated with the recent sales of rough diamonds in the world market?

In his time, Cecil Rhodes formulated a development strategy for De Beers, which has been following it for more than a hundred years. He said that “if there were only four people in the world, we would need to sell just enough diamonds for two of them.” Therefore, excessive rough supplies offered by mining companies to the market, which is associated with the end of the monopoly and the role of De Beers as a regulator, negatively affects the stability of demand and the condition of the entire diamond pipeline.

The rapid development of gem-quality synthetics production, the cost of which is currently less than 10% of the cost of similar natural rough diamonds, also has a negative impact on demand.

What are the overseas projects ALMAZINTECH is currently working on?

We are handling our project “Aprelskoye” focused on exploration for gold in Kyrgyzstan.

ALMAZINTECH together with SVAROG BIENES Y SERVICIOS S.A. are engaged in elaboration of a project to organize a gold mining company in Bolivia.

Regarding the Bunder diamond mine located in a specially protected area with strict environmental requirements in India’s Madhya Pradesh, we submitted a proposal to the Indian Embassy to use an exclusive underground mining technology developed for primary diamond deposits with a minimal negative impact on environment as compared with other technologies. A detailed description of this technology can be found on the Mining Portal of Russia.

sergey_bezborodov_eng.pngHow likely is the discovery of new large diamond deposits?

As the global geological experience shows, the discovery of large deposits is always a rare occasion. According to various sources, the Udachnaya, Yubileinaya, Mir, Orapa, Argyle, Jwaneng, Venice, Catoca and Finsch pipes can be considered to be large diamond deposits. Their discovery took place at different times and with an interval of 10-15 years.

In 2013, the Luele diamondiferous kimberlite pipe was discovered in Angola within the Luaxe concession. Its exploration is not yet completed, but preliminary data indicate that it will be a large diamond deposit. It is clear that the discovery of new deposits is possible only in areas having overlying strata, where overlying formations are quite thick - 60-80 m or more.

With the advent of new technologies for exploration or their complexation (combination of several such technologies) the likelihood of discovering new diamond deposits increases.

Thus, De Beers Group uses SQUIDs (superconducting quantum interference devices), a new powerful high-tech detection method that measures minor magnetic field shifts indicating the presence of a kimberlite pipe well below 300 meters from the ground.

Nowadays, new types of software employing artificial intelligence and sophisticated algorithms are widely used to comb through a mass of data and mineral sampling results for signals that show the presence of diamonds.

It can be added that, as many experts note, Brazil is one of the most promising areas for starting exploration in order to search for new large diamond deposits.

What can you say about the Popigai diamond deposit, the possibility of its development and the use of its diamonds?

The field was discovered in the 1970s. Its exploration and feasibility study were carried out in the same period. At that time, the price of diamonds within this country was the same for all size classes and did not depend on their characteristics. Diamonds of all sizes from 0.5 mm to 10.8 ct had one price. And this was the price used in the feasibility study. If world prices were to be used at that time, the reserves of the Udarnoye and Skalnoye deposits would not have been approved by the State Reserves Committee even at 7 and 23.23 ct/t respectively. Despite the fact that the abrasive ability of Popigai diamonds is 1.8 - 2.4 times higher than that of regular natural diamonds, their extraction in the near future can hardly be possible. Since the use of diamonds from the Popigai deposit is possible mainly for technical needs due to their characteristics, it is necessary to form a demand for their use from the market, and only after such demand will reveal itself, there will be a chance for economically viable projects to develop it. 

excl_07102019_lomonosov_concentrator.pngThe concentration factory at the Lomonosovskoye diamond field with an annual processing capacity of 4.5 million tons of ore  

So far, no major new diamond fields have been found comparable to those at which such companies as De Beers and ALROSA operate. Does this mean that soon the time of diamond mining giants will end, and only smaller mining companies will remain in the industry?

The size of a diamond field is a rather relative parameter. If we determine the size of a deposit in carats, then large deposits are those with reserves of 20 million carats or more. Soon - this is also a relative parameter. But as statistics show, a new large diamond field is discovered once every 20 years.

Since the 18th century, about 6,500 kimberlite deposits have been discovered, of which less than 50 - or less than 1 percent - have become profitable mines, according to statistics.

The period of discovering kimberlite pipes cropping out to the surface is long gone, and to search for concealed kimberlite bodies, one will need significant financial investments, which junior companies cannot afford.

Geological exploration of primary diamond deposits is even more costly; it is the business of large mining companies having more funds. It is extremely difficult to find cost-effective diamond deposits, and the search itself costs a lot of money. A company spends a quarter of a million dollars every time it drills an exploratory well. The costs in different countries are different, but not very much, and taking into account the fact that the probability of finding a cost-effective kimberlite deposit is very low, exploration companies are forced to spend large sums without any guarantee that they will find something that can become a mine.

It seems obvious that turning a discovered deposit into a diamond mine is a high-cost affair and can most often be done by large diamond or mining companies with significant cash reserves.

For example, in Angola, there is a large primary diamond deposit (its area covers ​​160 hectares and its reserves reach 23 million carats of diamonds), which is Camafuca Camazambo discovered several decades ago. But so far, it has not been explored in detail (attempts to do this were made by such companies as Diamang, MATS and SouthernEra in 1960-2002), because only large mining companies can do it. And now Angola is once again trying to create attractive competitive conditions to attract investments into this project. 

excl_07102019_botuobinskaya.pngThe diamond mine quarry on the the Botuobinskaya kimberlite diamond pipe (Republic of Sakha (Yakutia), Russian Federation) 

In world-wide practice, junior companies engaged in diamond exploration are a common occurrence. What is the situation in Russia in this regard? Is it necessary to develop this kind of activity in this country?

Here in Russia, there are so far no conditions facilitating the emergence of small-scale exploration business or junior companies similar to those based in Canada and Australia. Under the current legislation governing the use of underground reserves, Russian junior companies cannot arise in principle: this is hindered by both the lack of protectionist measures in relation to prospecting and exploration and the absence of special markets for mining venture capital in the Russian financial system.

Therefore, the term “Russian junior company” today does not reflect the western characteristics of juniors. In Russia, such a system has not yet been created; therefore, one cannot count on private investments in this specific area of ​​business before a fundamental change in legislation.

The main problems in the management of the subsoil fund affecting the activities of junior companies are the following:

- Complete absence of state support in the field of exploration taxation;
- Complicated and protracted procedures for obtaining and transferring the rights for using the subsoil;
- Complete absence of the possibility to attract venture capital to risk projects.

Although there are exceptions, and such companies do emerge, and if they obtain funding (like, for example, Proex Service, which owns five licenses for diamond exploration in the Arkhangelsk Province), they organize prospecting and exploration works.

excl_07102019_nyurba_concentrator.pngFactory No. 16 at the diamond mine on the Nyurbinskaya kimberlite pipe (Republic of Sakha (Yakutia), Russian Federation)

Recently, Canada-based Arctic Star Exploration reported encouraging results of their diamond exploration in the Finnish part of the Karelian craton. AGD Diamonds and Severalmaz are already mining diamonds in its Russian part at the Grib and Lomonosov Mines in the Arkhangelsk Province respectively. In your opinion, what are the prospects for discovering new diamond deposits in the Arkhangelsk Province?

In our opinion, the prospects for discovering new diamond deposits in the Arkhangelsk Province are far from exhausted. This is also evidenced by the fact that during the prospecting operations in recent years new kimberlite pipes have been identified, which, unfortunately, were not diamondiferous. And given the fact that the known diamondiferous kimberlite bodies are overlaid by later deposits and contain preserved crater facies, i.e. they have a minimal grade of erosional truncation, the discovery of new kimberlite pipes can be expected from the improvement of exploration technology and the emergence of new technologies.

According to the Ministry of Natural Resources and Forestry Complex of the Arkhangelsk Province, it is planned to start operations to identify new diamond deposits in the Mezen and Primorsky districts in 2020-2022. The federal treasury will allocate 410 million rubles for these works. Geological exploration for diamonds in this area has not been carried out since 2010.

Vladimir Malakhov, Rough&Polished