Botswana Diamonds and its associate Vutomi have signed an agreement with Eurafrican Diamond Corp to mine and process the diamond-bearing gravels and residual stockpiles on a portion of the Marsfontein farm, in South Africa.
The agreement gives EDC a contract for the mining and processing of the identified deposits on the Marsfontein Mining Permit, with 25% of the pre-tax revenue from larger or high value ‘Special Stones’ (any stones weighing 10.8 ct or more, or valued at more than $8,000/ct) and 15% from the standard run of mine stones accruing to Vutomi, which is 40% owned by Botswana Diamonds.
Vutomi was recently granted Environmental Authorisation over a substantial portion of the residual diamond-bearing gravels produced from the high grade Marsfontein mine, which is contiguous to Botswana Diamonds’ Thorny River operation. Thorny River has been modelled to contain 1.2-2 Mt of material (to 100 m) with a diamond grade ranging between 46-74 ct/ht and diamond values in the range of $120-$220/ct.
John Teeling, Chairman of Botswana Diamonds, said the partnership with EDC paves the way for commercial production to re-start on Marsfontein and Thorny River.
“EDC has a rich history of successful diamond mining and processing and has excellent technical and financial support,” he said. “Furthermore, EDC and Vutomi projects complement one another, providing a strong project pipeline.”
EDC, established in 1964, has long been a premier diamond miner and processer, and is currently mining and processing the Schuller kimberlite pipe and diamond-bearing gravels around Petra’s Cullinan diamond mine.
The contract mining and processing agreement allows for the continued contractual bulk sampling on the Thorny River project, as well as first refusal rights, between EDC and Vutomi, on all their South African diamond exploration and development projects.
While the Environmental Authorisation was granted for Marsfontein on September 12, Botswana Diamonds said it was expecting the remaining regulatory grants shortly.