Sunday, September 24, 2023

DiamonEx moves to full production

DiamonEx, the junior diamond miner, is to move to full production at its diamond mine in Lerala this week, bolstering Botswana’s position as the world’s leading diamond producer in the world.

“The commissioning has gone well with no major issues emerging. It has overrun by around three weeks due to some technical issues in plant operation but, on the whole, the plant has tested well,” DiamonEx Managing Director, Dan O’Neill, said, adding that “we are all very proud of what we have achieved and created, and look forward to the next challenge of optimizing diamond recovery and generating cash flow.”

Lerala Mine lies about 120 kilometers south-east of Palapye ÔÇô a place earmarked for the development of the country’s second university ÔÇô and it is expected to create close to 300 new jobs directly.

At full production, the mine is to produce 330,000 carats per annum over its life span of 10 years. Its production is expected to be sold through an auction in Botswana which will help to create a secondary market that is not influenced by De BeersÔÇöthe world’s largest diamond producing company.

“The mine is going to be highly profitable because the production costs are low. And the most interesting thing about the project is K2 which is the richest resource,” head of Capital Asset Management, Leutlwetse Tumelo, has said.

The mine is forecast to have a net operating cash flow of US $100 million on revenue of US $ 230 million over a period of 10 years.

The mine will be an open pit operation and there is a provision for underground mining after 10 years.
Further, the mine will be boasted by the envisaged diamond shortage in the market and the price spikes that are being driven by China and Indian markets. In the next 10 years diamond prices are expected to rise by 50 percent.

“Simultaneous with the Botswana offering, the company will be offering its goods for sale internationally, in Antwerp, with the price in a closed tender process securing the diamonds,” O’Neill added.

The company’s first sale of its Botswana production is scheduled to start by the end of August and part of it will be offered to the 16 diamond and polishing firms that are established in Botswana.

“The diamond sale will allow DiamonEx’s Lerala mine to join the very small list of producing hard rock diamond mines in the world, a list of less than 20 mines, and also make it first independently owned producing diamond mine in the Republic of Botswana.
“Botswana produces up to 30 percent of the world’s rough diamonds by value. All of Botswana’s production, however, is accounted for by a single entity, a joint venture between the Botswana government and De Beers, known as Debswana. Diamondex will be the first independent diamond producer in the world’s premium diamond producing region. This is a truly commendable achievement,” O’Neill said.

DiamonEx owns 15 000 km2 of mineral rights in Botswana and it is actively exploring diamonds as well as a 9.3 hectare diamondiferous pipe in northern Colorado, USA. It is listed on the Botswana Stock Exchange and the Australian Stock exchange.


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