Diamond Fields begins study

Diamond Fields International (DFI-T) is advancing its marine diamond concessions near Luderitz, Namibia, to the stage of final feasibility study.

As part of the study, U.K.-based Seacore, a British marine drilling and civil engineering company, will:

– establish a design criteria of mining equipment;

– determine capital and operating costs;

– design a separate sampling tool; and

– assess technical and startup risks.

Seacore proposes marine mining with a horizontal mining system, using an articulated, slewing mining arm and pump assembly attached at the base of a rigid, heave-compensated slurry pipe. The system is capable of excavating more than 4,000 cubic metres per day. This material would deliver the diamondiferous gravel to a nominal 100-tonne-per-day, dense-media-separation plant aboard a support vessel. The company says the proposed system is based on proven technology components. Its suitability will be tested during the study.

Seacore’s work will run 10 weeks and cost $150,000. Diamond Fields expects to complete the study in five months.

A scoping study by AGRA Simons estimates that diamond-mining could commence within one year. This study follows an independent resource estimate completed by MDRI, which pegged the indicated resource at 364,900 carats, and an inferred resource of 549,700 carats, for a total of 914,600 carats over an area measuring 1 million sq. metres.

AGRA Simons estimated capital and operating costs at US$39 million over two years. Net revenue for the “base case” indicated resource estimate is US$52.1 million, which would result in an initial production rate of more than 250,000 carats per year.

This estimate is based on an average sale price of US$150 per carat for the more than 95% gem-quality diamonds typically extracted from the concession. Last year, more than 10,000 carats were sold for US$160 per carat. The Namibian government collects a 10% royalty on all diamonds prior to export for sale.

Net revenue increases to US$86 million for the base case plus 50% of the inferred resources, and US$119 million for the base case plus 100%. Recovery of the inferred resources would not incur an increase in capital costs.