Partners
The independently prepared study concludes that a first stage of mining would produce 235,200 carats valued at US$94 million and generate before-tax cash flow of US$35.8 million over 7.5 years. The partners plan to begin a full bankable feasibility study immediately, which will include a 100,000-cubic-metre bulk sample.
The study focused on a small, well-drilled and trenched portion of the East Gravel Run on the Nooitgedacht 131 IP property. Nooitgedacht’s indicated resource stands at 14.7 million tonnes averaging 1.6 carats per 100 tonnes. The resource covers just 1.5 km of the gravel body’s 12.5-km strike. There is no resource estimate yet for the 5.9-km-long West Gravel Run.
The capital cost for the initial plant, which is expected to treat 1.1 million cubic metres of gravel annually, is pegged at US$8.2 million. Operating costs are estimated at US$6.20 per cubic metre; revenue, at US$5.30 per cubic metre. The prefeasibility study assumes an average diamond value of US$400 per carat, which, based on recent production from the adjacent Hartebeestlaagte 146 IP property, is considered conservative. There, 1,753 diamonds extracted from gravels immediately south of EGR sold for an average value of US$480 per carat.
Etruscan and Mountain Lake intend to expand production once the full-scale Nooitgedacht plant is operating. Next, they intend to explore and develop the Mooi River group of properties.
Under a new agreement, Etruscan can earn a 75% interest in all seven of Mountain Lake’s properties by spending US$2 million on exploration work and completing a positive feasibility study. Etruscan has also agreed to arrange project financing once a production decision is reached.
Mountain Lake will have to put up 25% of the funding to bring the project into production, but Etruscan has agreed to advance that money if necessary, taking its repayment from 75% of Mountain Lake’s share of the project’s revenue.
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