- The kimberlite is potentially commercial when applying current industry standard mining and processing costs
- Additional survey and geological work to better understand the level of dilution is required
Botswana Diamonds (BOD) has announced the results of a conceptual open pit mine optimisation evaluation on the River Blow on its Thorny River property in South Africa.
The evaluation was completed by South Africa-based independent mining advisory consultants, Practara (Pty) Ltd, together with modelling input from ABGM (Pty) Ltd of Australia. The miner says conceptual open pit mine plan models were developed under a number of scenarios to assess the open pit mining potential of the River and River Extension blows.
The objective of the evaluation was to identify the best open pit mining option and considered low, medium, and high-cost scenarios for mining. “The purpose of this exercise was to determine whether there was commercial potential in the Thorny River discoveries,” says Managing Director, James Campbell.
Campbell adds that the conceptual open pit evaluation shows that even at low revenue factors, the kimberlite is potentially commercial when applying current industry standard mining and processing costs. “This exercise will be updated following drilling on the adjacent high priority targets”
The models used the results of several drilling programmes. BOD says grade and diamond value data was based on previous microdiamond and bulk sampling data, as well as production results from the adjacent Klipspringer Mine and the Technical Economic and 2 Evaluation Report (TEE Report) on the Thorny River Project as announced in June 2018 (and which was a pre-scoping study analysis).
Further, cost data was benchmarked against similar operations. “Shareholders should note that the evaluation is preliminary in nature and was prepared from drilling and geophysical modelling results and on which no resource has yet been declared,” BOD notes, adding that the evaluation is purely conceptual and indicative of what could potentially be considered for more detailed work.
“The evaluation is based on pre-tax illustrative estimates of cashflow before provision of capital expenditure or preproduction costs and which have not yet been determined.” According to BOD, the TEE stated that the kimberlite exploration target at Thorny River area has a grade of between 46 and 74 cpht and diamond value of between $120-220/ct at a bottom cut off of +1mm. For the purposes of the evaluation, BOD says a lower grade of 20 cpht was also considered.
The River medium-cost scenario mining model shows positive operational cash flow net present values for potential future open pit exploitation options at a conceptual level, according to BOD which notes that “any open pit that is formed on the basis of a low revenue assumption (i.e. at revenue factors less than 80 percent) coupled with the maximum open pit size are indicated to be commercial”. The firm says additional survey work and in particular geological work to better understand the level of dilution is required to further optimise these conceptual mine models. In the high-cost scenario, an average grade recovery of only 20 cpht would not be economic.
The scenarios examined exclude any benefit of the company’s new contiguous targets which were identified through a recent ground geophysics exercise and are indicative of additional kimberlite blows. BOD says drilling of these targets has the potential to add volumes and impetus to a ‘hub and spoke’ mining model and this is scheduled for the dry Southern African winter season. Following this, BOD says the mine plan will be updated and the capital expenditure assessed. Subsequently, it is expected that a mining permit will then be sought.