Thursday, March 4, 2021

Lerala mine re-commissioning delays as owners explore funding models

Kimberley Diamonds Limited, the new owners of Lerala mine ÔÇô situated
in north-east of Botswana ÔÇô said re-starting of the project could be
delayed as the company looks at ways of financing the
re-commissioning, but added the postponement will be short term.

KDL recently completed the acquisition of Mantle Diamonds, the
previous owners, and made a pronouncement that the mine will be
brought to production buoyed by rise in rough diamond prices, which
the company said will capitalise on.

However, Head of Corporate Communications at Kimberley Diamonds,
Candice Sgroi this week told Sunday Standard there could be a short
term postponement to sought out financing.

“The Board of KDL this week announced that the re-commissioning of the
Lerala Diamond Mine will be postponed until the appropriate funding is
available,” Sgroi said from Sydney.

“If there is a postponement it will likely be short-term and KDL will
update the market as soon as these plans are finalized.”

Sgroi said it is too early to state capital costs of re-commissioning
the mine as the company is in the “process of putting together
costings for the re-commissioning of Lerala is ongoing”. “KDL is
looking at several options to fund the re-commissioning of Lerala and
when that is concluded we will notify the market.”

The Lerala is situated in north-east Botswana, 34km north of the
Martin’s Drift Border Post with South Africa and comprises five
diamondiferous kimberlite pipes totalling 6.66ha in size.

The kimberlites were discovered by De Beers in the early 1990s and
subjected to limited mining by DiamonEx Ltd in 2008. Most recently,
Mantle operated the mine between February and July 2012, producing
73,403 carats from 0.26 Mt at 28.2 cpht. The mine and processing plant
was placed on care and maintenance in July 2012.

Kimberley has previously stated it intended to recommence production
at Lerala in 2014. A 230 tph processing and recovery plant situated on
site will be modified to reach 1.9 Mtpa of ore throughput.

Lerala has a 15 year fully-permitted mining licence covering an area
of 21.86km2 and the mine will target a production rate of
approximately 400,000 carats per annum (cpa)
“The Lerala mine is a desirable asset for KDL to acquire for a number
of reasons. Botswana is a large and respected diamond jurisdiction
and a stable operating environment with skilled workers. Also, the
Lerala asset is attractive to KDL because it is already established
with a mine and processing plant insitu and KDL has the diamond
industry expertise in-house to successfully bring the mine back into
production and to run it sustainably over its remaining life,” added
Sgroi.

“Kimberley Diamonds was also attracted to acquire Lerala because it
aligns with the KDL mission to find, mine, recover and sell diamonds
from operations in a safe, efficient and profitable manner by
optimising the available resources for the benefit of our owners,
employees and the local community. The rough diamond market is
strengthening.”

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