The case of the missing diamond in Tanzania

When Douglas Lake Minerals (DLKM-O) acquired 46 sq. km of diamond prospective land around De Beers‘ Williamson mine in Tanzania it was hoping to make a big diamond find for itself.

What it didn’t count on was someone else doing all the finding.

But that’s exactly what the company says is taking place, as its Magembe property is being buzzed by artisanal miners in the area — miners who are reportedly taking some big stones from Douglas Lake’s land.

“This is a good news, bad news story,” Harp Sangha, the company’s president and chief executive says in a release. “The good news is that we’ve had reports of a monster diamond along with numerous other large diamonds being discovered on our property. The bad news is that since we haven’t yet moved onto the property, the local miners are taking our diamonds.”

Sangha, reached on his cell phone in Vancouver, says the property vendor who is a shareholder in the company told him that a local Lebanese diamond buyer called to tell him that an artisanal miner had tried to sell him a very large diamond which came off of Douglas Lake’s property.

Sangha says while the police were notified it would be virtually impossible to recover the diamond.

He describes the amount of artisanal mining in the area as “insane”, and says the company is seriously considering building a 10 to 15-km long fence around the property to keep nimble fingers away.

In a release the company says it has already taken some on-site security measures and that it has entered into discussions with De Beers to see if it can provide any additional security.

While the company has roughly US$500,000 in the bank, Sangha says it will turn to the market with the hopes of raising US$5 million in January. The funds will be used for an air mag survey, updated mapping, geochemical work and a bulk sampling program.

The Magembe property is adjacent to the eastern, northern and western boundaries of De Beers majority owned Williamson Mine.

The Williamson Mine has produced diamonds for over six decades and currently produces roughly 300,000 carats per year.

Douglas Lake acquired the property for a cash consideration of US$200,000 and 1.5 million shares.

On Dec. 12 the company’s shares were down 2% or 3 to US$1.47 on just over 19,000 shares traded.