Large diameter drilling
on the African Diamonds
AK6 project in Botswana
 
London, England — MININGREVIEW.COM — 25 March, 2008 – Originally established to develop diamond mines in Botswana and West Africa, African Diamonds plc – the AIM and Botswana Stock Exchange-listed diamond explorer and emerging producer – is on track to launch production next year at its world-class AK6 kimberlite diamond discovery in the Orapa area of Botswana.

“Significant progress has been made with the company’s mining licence application,” the company’s newly-released interim results statement for the six months ended 31 December 2007 revealed. “Approval has been received from the regulatory authorities concerning water, power, land and social matters,” it added, “and discussions with the government on an appropriate fiscal regime are far advanced.”

In the mean while, detailed engineering design work has continued on the mine to optimise operations from both the technical and economic perspectives. “This will also enable a rapid ramp-up of engineering activity once the mining licence has been approved,” said the statement.

It also pointed out that full financing is in place for the mine development, without any dilution to existing shareholders.

The mine – with an inferred resource of 51.6Mt at an average grade of 24 cpht – is scheduled to be in production towards the end of 2009. Initial throughput will be 2.7Mtpa in its first full year of production at a cost of between US$120 million (R960 million) and US$140 million (R1.1 billion). The plant has been designed with a view to increasing throughput to 4.2Mtpa by 2012. This will cost in the vicinity of another US$100 million (R800 million).

By this time, AK6 is expected to be one of only twelve hard-rock diamond mines in the world and in the top five as measured by profit to revenue, the statement claimed.

African Diamonds chairman John Teeling commented: "The AK6 diamond mine in Botswana is the jewel in our crown. The final step prior to construction – the mining licence – is at an advanced stage of negotiation, and we remain on target for an end 2009 start-up. We are delighted to have the active support of the Botswana investment community who now own about 20 percent of the equity,” he concluded.

The company’s wider portfolio of exploration projects is also performing well with specific targets under evaluation in other parts of Botswana.