Diamond Fields resurfaces

Shares in Diamond Fields International (DFI-T) shot up a dime, or about 15%, to 78 on Feb. 19, after the company announced an agreement with Samicor Mining Services that paves the way for a resumption of diamond mining off the coast of Namibia by the end of May.

Under the six-month deal, Leviev group-led Samicor will sail its recently acquired marine mining vessel M.V. Kovambo on DFI’s marine mining license ML111, near Luderitz, Namibia; production will be split equally.

Samicor acquired M.V. Kovambo, equipped with a third generation seabed crawler mining system 50-tonne-per-hour dense media processing plant, and a final recovery X-ray sorting plant, following the liquidation of Namibian Minerals last year.

DFI’s costs under the deal will be capped at an undisclosed U.S. dollar amount. The company also has the option of extending the agreement for an additional six months.

The deal is subject to the pair coming to an agreeable mine plan within 45 days. The M.V. Kovambo is currently berthed in Cape Town for refurbishment and maintenance work on the vessel and mining plant.

DFI suspended mining operations in late January after the company and its partners Gemfarm (owner and operator of marine mining vessel M.V. Anya) and Lazig Ltd. Said that operating costs had become prohibitive, thanks to a stronger South African rand.

M.V. Anya had just resumed mining in late September 2003 following a longer-than-expected delay in changing the ship’s classification following its sale. Between then and mid-November, DFI recovered 5,394 carats of diamonds from the Marshall Fork deposit, off the coast of Luderitz. The average recovery was 3.1 carats per square metre, which exceeded projections. Most of the stones are gem-quality.

During December 2003 and January 2004, DFI sold 6,292 carats at an average price of US$145.82 per carat.

DFI’s main Namibian concession covers more than 70 km of coastal waters between Hottentot Point to the north and Diaz Point to the south, centred at Luderitz. Within that area are the diamondiferous Marshall Fork, Diaz Reef and Conical Beach features.

DFI says that the M.V. Kovambo’s seabed crawler was specially designed by Namco to mine diamonds from deposit similar to those at Marshall Fork. The system began mining on Namco’s extensions to the Marshall Fork deposits in 1998, and produced about 400,000 carats of diamond, of which 95% were gem quality. Peak production of 200,000 carats in 1999, included a single day haul of 16,271 carats.

Says DFI’s CEO, Gregg Sedun, “We look forward to a significant increase in the level of diamond production from ML111, resulting in enhanced cash flow for the company. The deployment of crawler-based technology for the first time on Diamond Fields’ Luderitz Concession will place DFI at the uppermost level of marine mining operations worldwide.”