Klipspringer produces early stones

Diamond production has begun on the newly commissioned no. 4 level at SouthernEra’s (SUF-T) Klipspringer diamond mine in South Africa, some six months ahead of schedule.

SouthernEra now estimates that full production will total 33,000 tonnes per month (186,000 carats per year), or about 18% above feasibility estimates.

The mine is part of a joint venture with De Beers Consolidated Mines and Steppon Investments, a DeBeers associated black empowerment group. DeBeers and Steppon can share a half interest in the project by covering the project’s US$6.5-million capital requirements. De Beers has also contributed adjacent properties to the joint venture, which extend the strike length of the Klipspringer fissure to 7.5 km from 3.1 km. SouthernEra is the operator of the joint venture.

Klipspringer’s development is based on an independent feasibility study completed in August of 2000, prior to the formation of the joint venture. Reserves at Klipspringer are pegged at 3.6 million tonnes averaging 47carats per 100 tonnes. The deposit is sufficient for 13 years of production. Revenue over the 13 years is projected to be US$166 million; the internal rate of return, 42.9%; and the payback period, 1.5 years after full production begins. Mined diamonds are expected to fetch US$100 per carat on the market.

The decline development at Klipspringer has advanced to 646 metres, nearly 90 metres ahead of schedule. Both levels 4 and 5 levels have been opened and production stoping has begun on level no. 4. Stoping on level no. 5 is slated from November. The operation is expected to hit top gear by the third quarter of 2002.

Since the formation of the joint venture in March, more than 47,000 carats of diamonds have been recovered from the Klipspringer properties during development. Highlighting that production is a 2.6-carat fancy yellow diamond that fetched US$4,000 per carat — the highest price ever paid for a Klipspringer or Marsfontein stone. Two 14-carat diamonds and one 12-carat diamond were also recovered; they sold for more than US$2,000 per carat.