AFD African Diamond

 

TIDMAFD 
 
RNS Number : 3099C 
African Diamonds PLC 
11 November 2009 
 

AFRICAN DIAMONDS PLC 
 
 
 
 
Rapid Botswana Mine Development Following De Beers' Buyout 
 
 
  *  The De Beers' stake in the AK6 Botswana diamond project has been acquired by 
  Lucara 
  *  African Diamonds has the option, which it intends to exercise, to increase its 
  share in AK6 from 29% to 40% by acquiring a stake from Lucara 
  *  Lucara is a Toronto listed diamond Company, backed by the Lundin Group 
  *  Mine development will commence in 2010 with production on stream in 2011 
  *  AK6 has the potential to become a 1 million carat a year mine 
  *  African Diamonds will have the right to market their share of diamonds 
 
 
 
The board of African Diamonds AIM:AFD (the London and Botswana listed company) 
is delighted to announce that De Beers have disposed of their entire 71% stake 
in the AK6 diamond project to Lucara, listed on the Toronto Venture exchange. 
The agreement was brokered by African Diamonds, who have a 120 day option to 
increase their share in AK6 from 29% to 40% for StgGBP4.8 million. The agreement 
is subject to Botswana government approval. 
 
 
Studies commissioned by African Diamonds show that it will cost US$63 million to 
establish the mine at 2 million tonnes a year output, which will produce over 
400,000 carats at a modelled grade of 22 carats per hundred tonnes (cpht). A 
further US$25 million in capital expenditure will double the output of tonnes 
and carats. African Diamonds management believe that the grade will be at least 
25 cpht, giving an output of over 1 million carats. Mine development is expected 
in mid 2010, with production in late 2011. 
 
 
The current Life of Mine from the opencast is 12 years, but the deposit contains 
a further 7 million carats between 372 and 758 metres. 
 
 
Lucara is part of the Lundin Group of natural resource companies, which in two 
decades, has been built into a multinational US$10 billion group of 12 oil and 
mining companies, including Red Back Mining, Lundin Mining, Lundin Petroleum and 
Africa Oil. Eira Thomas, a member of the discovery team of the Diavik Mine, and 
John Gurney, the world renowned expert on diamond indicator minerals, are 
directors of Lucara. 
 
 
      John Teeling, Chairman of African Diamonds plc, commented: 
"There are only positives resulting from this development. We believe that AK6 
is a world class diamond deposit. It needed to be developed as quickly and 
efficiently as possible to benefit all stakeholders. This will now happen. 
 
 
In Lucara, we have found a like-minded partner. The Lundin family, who control 
Lucara, have in two decades built a worldwide group of oil and mining companies. 
Having John Gurney and Eira Thomas involved will provide expert guidance and 
credibility. 
 
 
For six years, we partnered with De Beers on AK6 and other projects in Botswana. 
Together we found a diamond mine but, over time, the needs and aims of African 
Diamonds diverted from those of De Beers. It was a genuine pleasure and 
privilege to work with De Beers. An amicable separation is a good outcome. 
The AK6 mine, with its high value diamonds, including the big, rare and 
beautiful Type II nitrogen free stones, will come on stream at the right time. 
The economics are compelling. Prices are rising, demand in the Far East is 
growing, while supply is at best flat. By 2012, there will be only a few 
kimberlite diamond mines in the world. 
 
We are delighted with the outcome. Our belief in AK6 led us to a 16 month 
odyssey to prove to new investors that immediate mine development, using a new 
mine plan, was the best way forward. We now need to realise the potential". 
 
 
This release has been approved by Alex van Zyl, Technical Director African 
Diamonds. Alex van Zyl (B.Sc. Stellenbosch, B.Sc. Hons. Pretoria) spent a long 
career in Anglo American in the diamond division, ending up 1990 to 1997 with 
worldwide responsibility for diamond exploration and evaluation. He was a 
consultant to De Beers from 1997 to 2002. 
 
 
 
 
Further information: 
 
 
African Diamonds is an AIM listed company with 79 million shares outstanding. 
The focus of activity is Botswana. Principal shareholders are Management 15%, 
Blackrock 10%, JP Morgan 10%, and Investec 12%. 
 
 
+----------------------------------------+----------------------------------------+ 
| African Diamonds Plc                   |                                        | 
+----------------------------------------+----------------------------------------+ 
| John Teeling                           | Tel: +353 1 833 2833                   | 
+----------------------------------------+----------------------------------------+ 
| James AH Campbell                      | Tel: +27 83 457 3724                   | 
+----------------------------------------+----------------------------------------+ 
|                                        |                                        | 
+----------------------------------------+----------------------------------------+ 
| Finn Cap                               |                                        | 
+----------------------------------------+----------------------------------------+ 
| Matthew Robinson, Corporate Finance    | Tel: +44 207 600 1658                  | 
+----------------------------------------+----------------------------------------+ 
|                                        |                                        | 
+----------------------------------------+----------------------------------------+ 
| College Hill                           |                                        | 
+----------------------------------------+----------------------------------------+ 
| Nick Elwes                             | Tel: +44 207 457 2020                  | 
+----------------------------------------+----------------------------------------+ 
 
www.afdiamonds.com 
 
 
 
 
11th November 2009 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCCKKKPOBDDFDD 
 

African Diamonds (LSE:AFD)
Gráfica de Acción Histórica
De Abr 2024 a May 2024

African Diamonds (LSE:AFD)
Gráfica de Acción Histórica
De May 2023 a May 2024