Joint partners in the AK6 proposed mine, African Diamonds and the world diamond mining giant, De Beers, are expected to finalise details of the mining lease this week, a top company official said Friday.
“There is a full board meeting on Tuesday in Johannesburg which is to approve details of the mining lease,” African Diamonds Managing Director, James Campbell, said.
The move is expected to set in motion AK6 formal filling of the mining licence scheduled for end of September this year.
Some of the details to be included in the mining lease application include the recent drilling results following “disappointing results which indicated breakage of diamonds” but were largely blamed on the drilling methods used.
However, the company said the last drilling results will only be released in a detailed report to be presented to the Department of Mines.
AK6 is 15 kilometers south-west of Letlhakane Village and is expected to be in full production by 2009. The mine is poised to rival the country’s second richest mine ÔÇô in terms of gem quality ÔÇô the Letlhakane Mine.
“We are looking at something as big as Letlhakane Mine both in terms of production per carat and the quality,” Chairman of African Diamonds, John Teeling, said. “And what we are going to do is not complicated; it is a question of building a quarry.”
African Diamonds said it will take close to 14 months to get to production line, taking into account the lengthy period needed for mine construction.
It will produce 600, 000 (gem quality ) carats in the first year, and thereafter production will pickup to the range of 1.2 million ÔÇôto- 1.5 million carats per annum,” according to African diamonds.
AK 6 is a joint project between African Diamonds and De Beers, the South African-based diamond giant, which owns 51 percent of the project and can acquire up to 70 percent equity by funding the exploration work and bankable study.
AK6 was originally a De Beers concession until they let it go and was snatched up by its former employee who later formed a joint venture with African Diamonds before selling his shares in the company.
The exploration exercise, carried out by De Beers following the joint venture through the use of its new technology, found out that the kimberliteÔÇöthe volcanic rock deposit containing diamonds ÔÇô was much larger than originally thought.
It also contained the rare nitrogen free gemstone deposits found in 45- carat Hope diamond in the Smithsonian in New York and Cullinan diamonds which are part of the Crown Jewels.
The mine will initially be an openÔÇôcast with a life-span of between 12 ÔÇôand- 15 years at the depth of about 200 meters. It also has a provision for an underground which will stretch its life-span to possibly 30 years.
“This is a huge resource and we expected it to last at least a generation,” Teeling had added.
Further, he said AK8 ÔÇô a five hectres pipe ÔÇô is on the right track but needs to be supported by satellite mines but he is pinning his hope on PL 36, which has some confirmed resource.
As part of the moves to develop potential resources, which are still under exploration, such as BK6, BK3 and BK7, which they know have the same geological make-up as AK6 and AK 8, the Botswana Stock Exchange and London Stock Exchange listed company said it is looking at raising money from Botswana.