Ventersdorp, South Africa — What it lacks in size, this country’s newest alluvial diamond mine makes up for in quality and potential.
Operator
Annual production is projected at 19,200 carats at an operating cost of US$2.74 per tonne of gravel treated. Existing resources will last 10 years, though the known deposit covers only a fraction of the targeted East Gravel paleochannel.
Based on recent and historic records, the gems are expected to fetch an average US$400 per carat, which translates into US$7.7 million in annual revenue. Operating income, before tax, is estimated at US$4.4 million per year, for an after-tax cumulative profit of US$27 million. An extra US$36 million is generated for each additional 10 million tonnes processed, assuming all else remains the same.
Addressing the crowd of shareholders, community members and politicians gathered for the opening ceremonies, Etruscan President Gerald McConnell praised the mine staff and contractors for achieving production so quickly. He paid particular tribute to Project Manager Kevin McConnell.
“Every project has its good days and its bad days, so it takes a person with special interpersonal skills and leadership to bring it through to a successful conclusion,” said McConnell.
Etruscan gave Tirisano the green light in January, after raising US$2 million by way of private placements and a line of credit with the International Development Corp. Construction and mining contracts were awarded, and commissioning got under way in September.
McConnell also gave special mention to the unwavering faith of Mountain Lake President Allen Sheito and prominent South African diamond geologist Bert Gerryts. The pair had worked in the area for nearly a decade before Etruscan signed on.
“Without their combined foresight, we really wouldn’t be here today,” noted McConnell.
When it came his turn to speak, Sheito deflected the accolades to others and encouraged a spirit of co-operation: “Team work has been the main reason for the success of this mine.”
Tirisano exploits what is known as a sink-hole, a topographical depression in the underlying dolomitic bedrock formed by earlier groundwater flow. The depression provided a natural trap for the alluvial gems and is thus expected to be richer than where no karst features exist.
The independently verified resource stands at 12 million tonnes and is expected to average 1.6 carats per 100 tonnes. About 1.2 million tonnes will be mined per year at a stripping ratio of 0.6-to-1.
By the time of the official opening, contract miners had stockpiled 75,000 tonnes of gravel, enough to feed the plant for three weeks. About 200 tonnes are screened and scrubbed hourly to provide 50 tonnes of concentrate for dense media separation (DMS), and the plan is to have 3,000 tonnes ready for separation at any given moment.
“That gives us a nice buffer, and the cone also prevents stones from bouncing,” McNeil told The Northern Miner, which attended the opening.
Etruscan had used a dry vibrating grizzly, but buildup in the underpan forced it to switch to a wet static grizzly. A de-sander has been installed to reduce slimes production to 10%, and a small ball mill, to be installed in the DMS wing, will remove troublesome manganese nodules from the plus-2 mm-to-minus-8 mm fines.
“We don’t want to chance breaking the coarser stones,” noted McNeil, adding that the largest stone ever recovered from East Gravel weighed 70 carats — 10 carats shy of the maximum size the plant can recover.
The plant currently sports two Sortex machines but will soon get a third to prevent bottlenecks. Diamonds are finally picked and weighed by hand before being flown off-site by helicopter for evaluation, all in a sealed environment.
The Tirisano project actually comprises three contiguous properties: Nooitgedacht, where mining occurs, Hartbeestlaagte and Zwartrand. Ownership is split 75-25 between Etruscan and Mountain Lake, though the Bakwena Ba Mogopa Trust is promised a 26% stake in Hartbeestlaagte, in accordance with black empowerment laws.
That being said, there is no paucity of promising gravel to test, so Etruscan can be forgiven for envisaging plants for all three properties. The company has already decided to twin the existing plant, which McConnell said would be up and running in eight months.
So far, the East Gravel Run has been traced for 15 km in a north-south direction, and a second, untested parallel run lies to the west. About 1.5 km southeast of Tirisano, on Hartbeestlaagte, a reverse-circulation drill rig is delineating three other sinkholes in the so-called Blue Gum deposit.
“We wanted to outline twenty or thirty million tonnes, but we are now way over that,” said David Duncan, Etruscan’s senior geologist. “This volume alone justifies the addition of a one-hundred-and-fifty-tonne-per-hour plant.”
The northern sinkhole measures 1 km in width, similar to the Tirisano deposit. The gravel here also extends deeper than 50 metres, though overburden can thicken to as much as 25 metres.
More than 200 of the planned 500 holes have been sunk. This work can not determine grades; however, since early 2000, contractors have been digging shallow pits over a 3-km-long section of East Gravel, where it extends on Hartbeestlaagte, to recover a similar concentration of the same quality-gems predicted for Tirisano.
History also is on the company’s side: between 1904 and 1984, production from all western Transvaal alluvial diamond fields exceeded 14 million carats, worth some R141 million — similar in weight but 41% greater in value than that pulled from the famous Big Hole at Kimberley. The Ventersdorp area itself contributed 667,000 carats, all from small pits.
“Past operators focused on the sink-holes at the risk of choking themselves off from the rest of the gravels,” noted Duncan. “We are taking a different approach in that we’re mining the entire deposit, though we can be selective at the plant.”
A red clayey overburden discouraged some from using large haulage trucks, while others failed to appreciate the local geology. Water supply also was problematic, until Etrsucan consulted with local farmers on the digging of wells.
Looking to the future, Etruscan has hired a local digger to mine the Klipgat deposit at the separate Mooi River properties, to the southeast. That project is also shared on a 75-25 basis with Mountain Lake.
However, at Klipgat, the contractor is covering all costs and reaping 85% of the operating profits, effectively giving the joint venture a 15% royalty. An independent geologist and a surveyor are monitoring the operation on the pair’s behalf.
“It’s a good situation for us because we’re getting some good science,” said Duncan.
Since January, the operation has yielded more than 5,000 carats from 330,000 tonnes. That’s in addition to 100,000 carats of historic production, though the largest stone ever recovered (18.95 carats, averaging US$5,000 per carat) came from recent production.
“The distribution seems to be similar to where Nooitgedacht was when a similar volume had been taken,” said Duncan. “Manganese is still a problem, but not as bad as at Tirisano, owing to the greater abundance of yellow gravels.”
The Mooi River paleochannel strikes for 15 km in a north-south direction. Klipgat sits near its intersection with a northwesterly, younger paleochannel that extends southeasterly on to other farms.
Geophysical surveys are planned.
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