Armed with a positive feasibility study,
The company is in discussions with banks and other financial institutions in an attempt to raise the US$28.1 million estimated for capital costs, including vessel chartering and detailed design and procurement of equipment and facilities.
The feasibility study recently completed by AGRA Simons, MRDI Canada, Seacore, Dowding Reynard and other firms examined the mining and processing of seabed sediments to extract high-quality gem diamonds using a mining vessel and supporting infrastructure. The mining would focus on two areas: Marshall Fork and Diaz Reef.
The “base case” examined the mining of resources (in all categories) of 6.1 million cubic metres containing 1.1 million carats (including 81% defined as probable reserves). It projected an after-tax internal rate of return (IRR) of 54% and a payback of capital within 16 months. If only probable reserves are considered, the mine life would be shortened to 5.8 years, the IRR would be 46%, and the payback period would be 18 months.
These estimates are based on average estimated diamond values of US$175 per carat and economic cutoff grades of about 0.15 carat per sq. metre. Diamond Fields notes that the sampling activities providing the basis for the estimates were conducted using tools not specifically designed for the geological environment at its Marshall Fork and Diaz Reef deposits. Although the company believes the suspected sampling bias will be in its favour, the actual difference in carats between sampling and mining won’t be known until mining begins.
Once financing is in hand, mining will begin at Marshall Fork, followed by Diaz Reef. The sediments will be dredged and pumped by a mining tool developed by Seacore, a British firm. It will be remotely controlled from the vessel.
The diamond-bearing sediments will be processed on board the vessel in a conventional plant that includes screening and de-watering, shell removal, dense media separation, X-ray sorting and hand-sorting. Final cleaning and sorting of the diamonds for valuation and sale will be done at the company’s planned facility in Windhoek, and through sales outlets in Antwerp.
Diamond Fields is considering various marketing proposals, and expects to make a decision before production begins. The diamonds from the project consist of more than 95% gem-quality stones valued at an average of US$150-200 per carat.
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