AFD African Diamond

 

TIDMAFD 
 
RNS Number : 3791O 
African Diamonds PLC 
29 June 2010 
 

African Diamonds plc 
Progress Update on AK6 
·      Commissioning due to start in Q4 2011 
·      Updated Feasibility Study received by African Diamonds and Lucara 
·      Contractor appointed for implementation 
·      Diamond marketing terms in the Mining License have been agreed by the GRB 
·      Project financing ongoing 
·      Ribson Gabonowe appointed as CEO of Boteti 
The Directors of African Diamonds plc (AIM: AFD) the Botswana diamond company 
announce the receipt of the updated Feasibility Study on the Boteti Mining (Pty) 
Ltd ('Boteti') AK6 project in Botswana. AFD hold 40% of Boteti, with Lucara, who 
are the operator, holding 60%. 
The proposal is a process plant designed at an initial throughput rate of 2.5 
million tonnes per annum ('mtpa') increasing to 4.0mtpa after 4 years.  This 
phased production approach, combined with contract mining reduces the up-front 
capital requirement. 
The revised mining plan calls for a smaller number of carats being produced at a 
higher diamond value.  The Indicated Resource at a 1.5mm bottom cut off has an 
average grade of 16cpht and average diamond price US$243/ct from 0-400m.  The 
bottom of the open cast pit is 324m and will be mined over an 11-year life. 
The first phase requires a capital investment of US$120 million, which includes 
the process plant, all mine site and off-site infrastructure as well as a 13% 
contingency.  This is a significant increase over the conceptual level 'Value 
Engineering Study' ('VES'), with the major variances being a 25% increase in 
throughput (accounting for 26%, or US$14 million), foreign exchange movement and 
escalation (accounting for 37% of the increase, or US$20 million) and scope 
changes (accounting for 37% of the increase, or US$20 million).  The most 
noteworthy scope changes were the addition of a pebble crushing circuit and 
increases in indirects and housing. 
Operating costs over the life of mine are estimated to be US$17.20 per tonne of 
ore treated.  The most significant increases in the operating costs are the 
factoring in of higher electricity supply costs and foreign exchange movements. 
With work commencing in July 2010, the first diamonds will be recovered during 
the last quarter of 2011.  Project engineering has been awarded to DRA Africa 
(Pty) Ltd ('DRA') and work will commence immediately. 
An agreement has been reached with the Government of the Republic of Botswana 
('GRB') which allow Boteti to sell its entire production of diamonds through an 
open tender process and/or negotiated exclusivity contract(s), subject to 
valuation by the Government Diamond Valuer ('GDV').  A number of proposals from 
diamantaires have already been received and these are currently being evaluated. 
We are in discussion with banks to supply project finance. 
AFD are pleased to advise that Mr Ribson Gabonowe, currently CEO of Kukama 
Diamonds (the wholly owned Botswana subsidiary of AFD) has been appointed as CEO 
of Boteti. 
James Campbell, Managing Director, commented: 
"We are very pleased that the joint venture board has received the updated 
feasibility study and that approval has been given to proceed with 
implementation ensuring that the project remains on track for our Q4 2011 
commissioning.  We are also delighted that the marketing terms in the Mining 
License have been satisfactorily addressed with the GRB and that sound progress 
has been made with raising project finance.  We are very pleased to have Ribson 
leading the Boteti management team." 
 
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. 
                                                                   29 June 2010 
Further information: 
African Diamonds Plc 
John Teeling                                                Tel: +353 1 8332833 
James AH Campbell                                     Tel: +27 83 457 3724 
Finn Cap 
Matthew Robinson, Corporate Finance           Tel: +44 (0)207 600 1658 
Henrik Persson, Corporate Finance                Tel: +44 (0)207 600 1658 
College Hill 
Nick Elwes                                                  Tel: +44 (0)207 457 
2020 
 
 
                               www.afdiamonds.com 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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