Schweizer Reneke, South Africa — Neels Badenhorst plucks a small, clear diamond off the grease table and pops it into his mouth. Dangling from a leather string around his neck is a vial filled with other rough gems. He moves the vial to his mouth, screws off the lid, and spits the diamond into the vial. This is the surest way to prevent the precious stones from ending up on the shoproom floor, he says.
Badenhorst, co-manager of the day-to-day operations of
In March, Monroe announced its first sale of diamonds from the London project, where the Badenhorsts operate two rotary pan plants. The sale consisted of 177.7 carats, which yielded proceeds of US$137,180, or US$770 per carat. The best stones, a 15-carat diamond and a 6-carat yellow diamond, yielded US$2,210 and US$5,070 per carat, respectively.
Driving through the endless maize and sunflower fields that characterize the Northwest Province, it’s difficult to imagine that valuable diamonds lie hidden in the soils beneath. This is farming country: large plots of marginal farmland broken up by the few dusty towns that bear not a hint of the prosperity diamonds can bestow.
But the observant will notice an occasional excavator in the fields and wonder at a sudden “roadworks” diversion on the R504, created, as it turns out, by overeager diamond miners digging up the tarmac. So it has been, more or less, since the 1920s, when an estimated 60,000 individual diggers worked the alluvial diamond triangle roughly outlined by Schweizer Reneke to the west, Wolmaransstad to the east, and Bloemhof to the south. Armed with little more than pick and shovel, these fortune-seekers dug under overburden, farmers’ fields, and even housing foundations to find their treasure. The Klondike . . . South African style.
Today’s diggers are still small, mobile operations, but the shovels have been replaced by heavy earth-moving equipment and the crude processing tools by rotary pan plants that can recover diamonds from the hundreds to thousands of tonnes of material that run through them each day.
Monroe, a Canadian junior and one of the few public companies on the scene, is taking the hunt a step further by using modern exploration techniques to transform the traditionally haphazard process of alluvial diamond exploration in this area into a more precise science. The company’s approach is admirably methodical and relies on cash flow generated internally to fund further exploration and development.
The ultimate success or failure of the exploration program rests with Tania Marshall, Monroe’s vice-president of exploration. Marshall has explored for alluvial diamonds all over the African continent but has a special fondness for the area near Schweizer Reneke, where she completed her doctoral thesis. Former head of Gold Fields’ diamond unit, she is considered an expert in the alluvial diamond deposits of South Africa.
Pay zone
Her goal, using a combination of geological mapping, aerial and satellite imagery, geophysics and drilling, is to pinpoint and expose the ancient diamond-bearing paleochannels that underlie a stubborn layer of calcrete, a pay zone largely overlooked by the waves of diggers that passed through the region over the past century. Meanwhile, Monroe will continue to generate cash flow by processing gravels that lie beneath the waste dumps of former diggers.
“When they had finished digging, instead of moving the dirt, they just moved to another place,” Marshall says of the old diggers. “Around their old holes you often find patches, quite large patches, of gravels they didn’t touch. Our primary objective is to look under the calcrete for virgin areas. But we’re going into the old gravels to generate cash flow.”
Ultimately, the company will use cash from the alluvial operations to finance exploration for kimberlites. The sources of the diamonds at the London project have never been confirmed, but since the drainage in the region flows north to south, the primary kimberlite deposits — if they have not been eroded away by now — would lie north of the project area.
The drainage patterns at the 21-sq.-km London project are complex. Intermittent uplift in the regional drainage basin resulted in the development of different land surfaces that have been cut by several ages of channels, or tributaries, of the Vaal River, the main river in the region. As a result, both alluvial and derived (eluvial and colluvial) diamond deposits can be found.
Challenging
Since the diamonds have a relatively high specific gravity, they tend to concentrate within the basal deposits of the A0 colluvial gravels (Late Cretaceous to Early Tertiary) and A1 calcreted gravels (reworked A0 gravels). Monroe’s exploration is focused on the higher-grade A1 gravels, which make for challenging targets, as they occur in a braided system of channels stretching over widths of up to 3,000 metres and are capped with calcrete.
Geophysics is the main exploration tool. The target gravels tend to be rich in clay and water, elements that can be detected with an EM-31 survey. Monroe follows up with a form of electrical resistivity tomography, modified for alluvial diamond deposits, which maps the topography of the bedrock and pinpoints the channels within the braided system.
The next step is to percussion-drill the geophysical targets at a line spacing of 100 metres and a drill-spacing of 50 metres to estimate grades. The calcrete cap is up to five metres thick, while the underlying gravel zone ranges from 0.5-2 metres thick. Finally, Monroe takes a 50,000-tonne composite bulk to improve confidence in the resource estimation.
“We do the drilling to determine where the main channels are,” says Marshall. “We start there and mine outward until the grade drops too low.”
There is considerable risk involved in projecting tonnage and grades on an alluvial diamond project, because the diamonds tend to be thinly distributed and vary in grade from location to location. Mining under the calcrete cap is also relatively expensive in comparison with mining gravels under unconsolidated overburden, because the top layer of the calcrete must be blasted before excavation begins. But the combination of Marshall’s exploration expertise with Badenhorst’s operating experience serves to mitigate these risks considerably.
Rooikoppie gravel
After several months of exploration, Monroe has completed a mine plan for the 20-sq.-km London project that includes 450,000 tonnes of alluvial gravels grading 1.3-2 carats per hundred tonnes (cpht) and more than 2.5 million tonnes of Rooikoppie gravel at grades of between 0.7 and 1.3 cpht. (The term “Rooikoppie gravel,” or “red gravel on a hill,” refers loosely to the derived deposits that have formed as a result of weathering and erosion.)
Monthly production is to begin early next year at the rate of 28,000 tonnes and increase to 48,000 tonnes at a cost of $2.50 per tonne. The value of the recovered diamonds is estimated to range between US$300 and US$600. At full production, the mine should generate annual cash flow of $2.5 million.
Monroe has two nearby exploration projects that could provide further reserves. The Doornbult project, in which the company has a 100% stake, has a regional diamond grade and quality of 2 cpht and US$430 per carat and is in the prefeasibility stage. The Cazali project, still in the exploration phase, has a regional diamond grade and quality of 1.2 cpht and US$400 per carat. Monroe has a 100% interest in Cazali, subject to a royalty and rental fee, similar to the rights it holds at London.
Marshall sees the upcoming changes to South Africa’s mining law, whereby diamond production would b
e subject to an 8% royalty, as a positive development for Monroe, which currently pays that royalty, often at a higher rate, to the landowner.
The junior owns and operates its own equipment, including four separate pan plants. Marshall says the next major investment will be an X-ray sorting machine to replace the grease tables that capture diamonds after processing. The US$100,000 machine will decrease the supervision required in the sorting hut and eliminate the risk of human error. But it means Neels Badenhorst’s days of savouring diamonds on the tip of his tongue may be numbered.
— The author is a Toronto-based freelance writer specializing in issues relating to mining and the environment.
Be the first to comment on "Monroe manages risks with methodical approach"