The usually jovial John Teeling must be toasting over a bottle of whisky wherever he is.
The Irishman and Chairman of junior miner, African Diamonds, whose name has become synonymous with address ‘AK6′, has been a concerned investor since the two shareholders of Boteti went into a dispute over the model of development of AK6 mine.
This week, it might have been all smiles for him as last week Friday news came in that government of Botswana has finally released the terms of mining
license, paving way for the development of the mine of which De Beers holds a stake.
Under the terms of the agreement, it means that after a period of delays for the production of the AK6 diamond, the project has officially been given a go ahead.
The move follows the rejection of a retention license application by government from De Beers last month.
Teeling noted in his reaction to mining license that it is an important milestone for his outfit while adding that
mining license provides certainty for all stakeholders.
“We believe the agreed terms to be equitable to all parties and we look forward to developing AK06 as quickly and as effectively as possible”, said Teeling.
Under the terms of mine license, a 15-year license from 10 October 2008 has been approved stipulating that production must commence by 2011.
There will be no Government equity in the project, but a normal diamond royalty of 10 percent will be charged, along with a variable profit based tax rate.
All output would be sold through the Diamond Trading Company in Botswana. The Government has given an undertaking that power will be supplied from the national grid, resolving one of De Beers’ key concerns about the development.
African Diamonds holds 28 percent in the Boteti JV which controls AK6, with De Beers owning 71 percent, with one percent held by Wati.
Media reports suggest that production at the mine could be around 600, 000 carats a year in the first three years, increasing to 880, 000 carats annually.
Boteti chairman, Tony Guthrie, was quoted in the media saying that his company would continue to do everything to ensure that the full economic value of this deposit is realised for the benefit of the shareholders and the people of Botswana.
“We are excited about this new development and I would like to thank the Botswana government and the joint negotiating team of Boteti who have worked tirelessly to ensure that all matters pertaining to the license were concluded in time and satisfactorily,” Guthrie said.
African Diamonds circulated a statement in July at a mining conference in Gaborone when it called for an arbitration simultaneously announcing legal action against its partner in the venture, De Beers.