HomeDiamonds & GemstonesZimbabwe JV to set sustainable diamond mining benchmark

Zimbabwe JV to set sustainable diamond mining benchmark

Botswana Diamonds and its joint venture partner in Zimbabwe, Vast Resources, have entered into an agreement which aims to unlock the diamond value within Zimbabwe’s Marange Diamond Fields.

In doing so, it will also establish a new benchmark for sustainable and mutually-beneficial mining development in the southern African country, MD James Campbell tells CHANTELLE KOTZE.

Campbell, an exploration geologist by trade, has spent more than 31 years of his career actively exploring and developing projects all over the world.

He is currently focused on the Kaapvaal Craton which covers a large portion of South Africa, Botswana, Zimbabwe, Lesotho and Eswatini (formerly Swaziland).

Campbell believes that the sub-continent is one of the most prospective areas in the world from a geological perspective. As such, it is central to Botswana Diamonds’ exploration strategy.

This article first appeared in Mining Review Africa Issue 12 2018

With an active exploration presence and kimberlite discovery track record in Botswana and South Africa, it was the political risk and uncertainty in Zimbabwe that inhibited the company from entering the country.

Despite having identified a number of promising targets in Zimbabwe, it wasn’t until the change of regime in November 2017 that Botswana Diamonds felt confident enough to return to the diamond-rich country to explore its potential.

Both Botswana Diamonds and Vast Resources have Zimbabwe diamond databases as well as extensive experience and knowledge of the country.

Vast Resources acquired a database relating to diamonds in Zimbabwe in 2008 and had, until 2010, carried out exploration in the field using information from the database.

Botswana Diamonds has independently acquired a Zimbabwe diamond database and, through its significant networks, has expertise in diamond exploration, development and mining.

In May this year, Botswana Diamond’s signed a memorandum of understanding with Vast Resources under which the two companies have agreed to exchange information derived from past exploration on areas prospective for diamonds in Zimbabwe; and to form a special purpose vehicle (SPV), to be jointly owned by each company (Botswana Diamonds – 13.33% and Vast Resources – 86.67%), for the purpose of developing and exploiting diamond resources in Zimbabwe.

In addition to this, the two parties have also agreed to collectively identify and develop diamond properties outside of the Marange Diamond Fields, in the rest of Zimbabwe, through a straightforward 50:50 joint venture agreement. The partners are yet to sign a detailed agreement on this.

The joint venture partners had been granted exclusive access to the 15 km2 Heritage Concession, or Block T1A, within the Marange Diamond Fields of the Chiadzwa region of eastern Zimbabwe – close to Vast Resources’ historic Marange Diamond Field claims.

Through an agreement with the local community trust – Marange-Zimunya Community Share Ownership Trust, who will have no less than a 25% stake in the Heritage Concession – the partners had been allowed to carry out initial due diligence on the area with a view to concluding a joint venture agreement for exploration, mining and marketing.

Vast Resources has contributed US$1 million as initial funding towards this as a shareholder loan in the SPV, with either party to contribute on a pro-rata basis as and when additional funds are required.

By October, the parties had concluded a preliminary geological assessment of the Heritage Concession, which outlined the potential for modern alluvial diamond placer deposits and the possibility for older conglomerates in the concession.

The partners are currently investigating the potential of the modern alluvial diamond deposits and of the older conglomerates on the property, having visited the site in late October.

Assuming positive results, the field work will be closely followed by field mapping, drilling and pitting, which will fairly quickly lead into a bulk sampling programme expected to begin toward the end of 2019.

The bulk sampling programme will form part of a pre-feasibility study and hopefully advance to a trial mining programme, says Campbell, adding that we are likely to simultaneously release a competent persons report on the asset.

“While we currently have a fair idea of the diamond value and grade, we have little idea about the extent, width or depth of the resource, says Campbell, noting that that the drilling will provide clarity on this before we embark on bulk sampling.

“We have every confidence that the new government in Zimbabwe will clean up the Marange Diamond Fields, and open it up for business in future. We are both thankful that Vast Resources have been granted the Heritage Concession and excited to be partnering with this company and be the first public diamond mining companies in the Marange Diamond Fields of Zimbabwe.  We plan on demonstrating what can be done to efficiently and rapidly add value to all the important stakeholders,” says Campbell.

An active 2018 across the portfolio

Botswana is also active throughout South Africa with several diamond exploration joint ventures in Botswana and South Africa.

In Botswana, Botswana Diamonds has acquired the full 100% stake in Sunland Minerals, by buying Russian diamond miner Alrosa’s 50% share in the joint venture.

A potential new investor, itself a large diamond producer with new ideas and keen to find new kimberlites in Botswana, is already close to acquiring a 50% of the Sunland Minerals joint venture.

The un-named new partner, which has a strong exploration team in place, will step into the exploration shoes of Alrosa and, once the deal is finalised, work is expected to begin in the first half of 2019 focusing on targets which have already been identified.

Meanwhile, the Maibwe joint venture, in which Botswana Diamonds owns a 15% stake, has remained static in 2018 following BCL’s rejection of Botswana Diamonds’ offer to purchase its 51% stake in the project.

A prospectus to encourage outside investor interest and to enable BCL to sell its stake in the joint venture is shortly due to be.

Further afield in South Africa, within the historic Free State kimberlite exploration project, Botswana Diamonds has undertaken whole rock geochemistry, ground geophysics and mineral chemistry – all of which point to diamondiferous kimberlites similar to the iconic Kimberley, Koffiefontein and Jagersfontein diamond mines.

These results have justified the commencement of a phased drilling programme, expected to begin in 2019.

Also in 2018, Botswana Diamonds and its joint venture partner Vutomi, have acquired prospecting rights to half of the Palmietgat cluster, north of Pretoria – comprising portions 1, 3, 5 and 7 of the farm Palmietgat, in the Limpopo Province.

A milestone 2019 on the cards

Botswana Diamonds and Vutomi are advancing towards first diamond production at the Thorny River project in South Africa by the end of 2019 – a milestone achievement for the project developer.

Following the release of a technical and economic evaluation report on Thorny River in June 2018, the joint venture partners have been considering a number of options to advance the property, concluding with the company signing the contract with Palaeo Minerals, covering both bulk sampling activities and potentially future full-scale mining services at the project.

The key terms of the contract are as follows:

  • A net revenue royalty of 12% will accrue to Vutomi;
  • 8% will accrue to Vutomi to cover state mineral royalties, sales and security expenses;
  • 80% will accrue to Palaeo to cover its mining and processing costs;
  • A processing target of up to 30 000 tonnes of kimberlite per month; and
  • Diamonds will be recovered using a processing facility at a nearby diamond mine.

Importantly, the bulk sampling along with the supporting geological work will contribute towards declaring a maiden resource for this project at little or no cost to shareholders.

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.