Botswana Diamonds, which recently found 13 targets in Orapa, Botswana with the help of ALROSA, said Gaborone should bring the Russian diamond giant in the country.
Company executive chairperson John Teeling told Rough & Polished’s African Bureau Editor In Chief Mathew Nyaungwa on the sidelines of the recently ended Botswana Resource Sector Conference that ALROSA will help the country find more diamond deposits in areas considered to be under-explored.
He said the Russian diamond monopoly uses sophisticated exploration technology, which previously helped it discover 17 hard-rock diamond mines in Siberia.
Teeling also revealed that after a false start in Mozambique, the company had found the presence of the paleoplacer rock, which is similar to that found in Zimbabwe’s Marange.
He, however, said a huge funding was needed to push the project forward.
Teeling said Botswana Diamonds was in talks with a South Korean company that owns an adjacent property but this had stalled as the company was also talking to the Chinese who recently received a mining licence in the area.
He said it will be “outlandish” for them to mine diamonds in the country alone, as they are still a small company.
Below are the excerpts.
During your address of the Botswana Resource Sector Conference, you urged Gaborone to invite ALROSA...
(Interjects) ALROSA must be here.
Why?
They have an application that I think will produce a number of mines in Botswana, so hopefully they will have a joint venture with us and we will do the work. What they can, which they have proven 17 times, is their technology and computer programmes can refine the data that is available from geophysics and geochem. Most of Botswana has been prospected at least twice but that is only on surface … these guys will find things below 100 metres and it is completely a new territory. This opens up a vista of multiple new mines and these guys have proven that they can do it. From the national point of view they [Botswana government] really must have ALROSA.
Why is ALROSA not in Botswana?
The problem with ALROSA is that it does not have any profile and the problem with Botswana is that it thinks only De Beers… people do not believe that ALROSA is far bigger than De Beers [but] it produces more carats and has an exploration budget of 5-6 billion [rubles] and it produces its own equipment. It is in their national interest that ALROSA should be here.
You recently talked of an impending joint venture with a significant diamond major in the Orapa region.
I have been talking to you for quite a while, that’s it (laughs).
I presume that diamond major is ALROSA?
It was due to be signed over the weekend (8 or 9 June). It has taken us about 18 months to get to this stage. [The delay has been partly due to the fact that] we have not been in a position to deliver the licences because the licensing procedure in Botswana has become cumbersome and not as transparent as it was. So that is the problem.
When do you expect to get the licences?
We expect to get certain amount of them enough to start exploration work in September [2013]. We have 12 targets and if we get six or eight of them then we can start the work.
So when will be the signing?
I have already signed but they are yet to sign. So we hope that the initial agreement will be signed immediately, very shortly, if not now.
Tell me about your other projects in Botswana?
The common one is the Gope licence block held by Brightstone. Here we have joint ventured a company with no experience, no technology but have the ground. So we joint ventured with them and have worked for the last six months on that ground. We have identified a few targets and so what we have offered to them – and again hope to be finalized - is that … they will run the project and we will spend money and earn shares. We will have probably, six targets in one part of the block and four on the other part of the block.
What are your prospects for Botswana?
Highly prospective, and in diamond exploration highly prospective means that there is a huge chance of not finding anything but in the scheme of things what we have, will be very good. The first stage is to identify kimberlites then do they contain diamonds? And then do they contain commercial diamonds? That will take 12 months.
Tell me about your progress in Mozambique where you recently obtained a six month exclusive option with the holders of three blocks on the Save River on the Zimbabwe border?
It is very interesting and confusing.
What do you mean by that?
We could not get a ground in Zimbabwe so we followed the river. We could not get the ground on Save because the Mozambican officials had given them to locals, so we joint ventured there as well. We sent in a team and it was from the United Kingdom. It was quite experienced in diamond mining but they were not experienced with the paleoplacer rock, which is the Marange rock and they came back saying we cannot find anything. So I showed the report to a South African team that had worked in Marange for four years and they identified the rock as paleoplacer rubbles. So the paleoplacer is there and there should be no reason why they should not contain diamonds because it’s the same rock. So the next stage now is to go back with a team who knows what they are looking for…there should be alluvial diamonds. These are three good licences and we should, I hope, start the work before the rainy season starts in November but we need money to do that.
How much are you looking at?
We are currently negotiating up to half a million sterling pounds with one investor and up to a million sterling pounds with another. When that will happen? It is unlikely that will happen, for it is very hard at the moment. We will need half a million sterling pounds in new capital to go forward from July to July 2014.
So your forage in Zimbabwe is over?
It should be over. We cannot do anything there at the moment. We have been recently offered two blocks in Marange but these are rocks because the alluvials have been taken and you are looking at hard rocks. The hard rock in Marange is only about a metre and half thick. It’s a blanket for paleoplacer, which is hard and expensive to mine and probably not that commercial because you are looking at 50/50 deal with the Zimbabwe Mining Development Company (ZMDC), which is okay but you are looking at another 50/50 deal with locals, so you are giving away 75 percent and if that was alluvial that was okay, the pay back was very quick but giving away 75 percent to mine hard rock is probably not commercial. We are not going to follow up on those two blocks. We have no activities in Zimbabwe right now, which is a pity.
Let us look at Cameroon, what is the progress there?
We had a report done on Cameroon in the last couple of months, which was very positive, remarkably. It said yes, pareoplacer is there, diamonds are there. Pareoplacer is very thick in Cameroon…a thumb sucking estimate states that they may not be 700 million carats there but a couple hundred million carats, which attracted a Chinese company to talk to CNK Mining of South Korea, which owns an adjacent Mobilong licence. If the Chinese do a deal, which I doubt for we have a ground next door, then that will increase the value of our ground and we look for someone else. For a small company like us to try and develop a diamond mine in Cameroon is outlandish rather outrageous, it is too expensive there. [However], there will be mines there, I have seen the diamonds from Cameroon they were green and red, why? I don’t know… Probably 80 percent of them are gem quality and will fetch maybe $200 or $300 a carat which is very high. Marange is only $40 a carat.
With the dredging up on the scene of the Chinese are you still going ahead with your talks with the Koreans for a possible joint venture?
We are still talking to them, but now they would rather talk to the Chinese than us. If the Chinese do not go ahead with them then they may come back and talk to us. The idea was that the Koreans will merge their business into Botswana Diamonds.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
