“We have now taken a definite decision to convert from trial mining to mining at Silverstreams,” BRC-DiamondCore outgoing CEO Theo Botoulas said in an interview with Mining Review Africa.

Theo Botoulas

BRC-DiamondCore outgoing
CEO Theo Botoulas.

“Having started trial mining at Silverstreams in July last year, our progress on the project has been excellent despite the fact that Eskom failed to hook us up to the power grid until January this year. We faced the challenge of having to operate on diesel at a cost of around R1 million a month, whereas operating cost on Eskom power amounts to only R200,000 a month."

Silverstreams has a gravel resource of 35 million tonnes. The first phase of its capacity doubling involved the addition of two pans, and this increased production by 50%. The addition of the final two pans in July took the total of pans to eight. At that point the 670 tonne per hour (tph) front-end DMS plant reaches its full capacity. The mine also has moved to continuous operations, whereas it was previously operating five days a week. Silverstreams will process 125,000 tonnes per month (tpm) with its eight pans operating at full capacity.

DiamondCores Paardeberg pit

Paardeberg East pit.

“In terms of production, we are hoping to build the operation up to anywhere between 600 and 800 carats/month at around US$2,500/carat,” Botoulas said. “This means we will be generating revenue of about US$2 million a month.” Total capital expenditure to date on the Silverstreams project has amounted to R73 million.

BRC-DiamondCore’s other key project in South Africa is the Paardeberg East operation, which is situated about 35 km west of Kimberley in the Northern Cape. “We began there in May 2007, completed sampling at the PK1 pipe, and sent the samples for analysis to our own bulk sampling facility on site,” Botoulas said. “PK3 did not show good results and has been discontinued, but PK5 is looking promising (7 carats per hundred tonnes), and we are now doing some delineation drilling and geophysics to see the extent of the pipe.

“We have to wait until we have all the necessary information on all the anomalies in the area. You cannot optimise a plant off one pipe – there are five of them – and you have to evaluate all the findings to get the mix right. We have reached the stage where we are trial mining at PK1, and now we have to get the economics right to decide on an optimal pit."

Unlike a gold project, a diamond project yields variable prices for variable types of product from variable deposits. What one needs to calculate is a dollar per tonne value in the ground. “At Silverstreams you’ve got an average value of US$8/t and your costs are around US$4/t.”

On Paardeberg East the kimberlite mining is costing about US$11/t. “Paardeberg East is a small kimberlite producer – marginal to just above marginal – and will always be, but in the context of the diamond shortages it’s going to be an important little supplier for us,” said Botoulas. “It will wash its face and make some money, but it’s never going to become a company-maker.

“We are going to do a geophysical survey of the area to see what other anomalies there are, and we’re going to test them to see whether they are diamondiferous,” Botoulas said. “It could take up to six months per target, and we will try and move through the targets as quickly as we can and make decisions on them. On particular individual targets we will decide immediately, but on the project as a whole we do not expect to make a final decision before the end of the year.”

The Plant at<br> Paardeberg

The plant at
Paardeberg East.

BRC-Diamondcore’s first three tender sales this year saw a combined offering of 1,323.76 carats from the Silverstreams alluvial project. These sold for a total of US$3.5 million at an overall average of US$2,528 per carat. The company’s Paardeberg East kimberlite project sold 5,301 carats for US$1.4 million at an average of US$925 per carat.

The company is also initiating its De Kalk project, having begun initial sampling, to be followed by trial mining. “We are drilling at Sanddrift, and we are about to start at Uitdraai. These are all alluvial, and we are expecting them to contribute towards our early earnings bed,” Botoulas said.

“On the kimberlite side, we have just completed a soil sampling programme at Skeyfontein and are awaiting results, but we may take a decision to sell that property. The thinking is that we would rather put our money into the DRC.”

“By 2011 I would like to see five operating mines optimised and running properly in South Africa – Silverstreams, Sanddrift, de Kalk, Uitdraai and Paardeberg East. We are also interested in acquiring certain other companies. We believe that our operating methodologies and technologies are our competitive advantage, which makes us able to work these types of terraces more effectively than others.”

Silverstreams Diamond

A 77 carat Silverstreams diamond sold recently on tender.