Monroe expands capacity at London (June 16, 2003)

Intent on achieving a processing rate of 44,000 tonnes of alluvial gravel per month by year-end, Calgary-based Monroe Minerals (MMX-V) is adding a third pan plant at its London diamond project in South Africa’s Northwest province.

The new plant will boost monthly capacity 40% to 33,000 tonnes, and Monroe has already laid additional water lines for the plant.

During the first five months of preproduction in 2003, the project delivered an average grade of 0.6 carat per hundred tonnes (cpht), 14% below target. However, the recovered stones are valued at US$505 per carat, 26% better than targeted. The average stone size is also 10% better than the 1.1 carats expected.

The preproduction recovery includes seven gem-quality diamonds that exceed 5 carats apiece. The two largest stones weigh 15 and 10 carats. Also included is a 6-carat yellow diamond.

In early March, Monroe sold a 177.7-carat batch of 142 stones, including the 15-carat yellow stone (for US$2,210 per carat) and the 6-carat yellow stone (US$5,070 per carat) for US$137,180, or US$770 per carat.

In August, Monroe intends to sell another package, including a 9-carat, clean, white stone valued at US$2,200 per carat.

The mine plan at London encompasses 450,000 tonnes of alluvial gravel grading 1.3-2 cpht plus more than 2.5 million tonnes of “Rooikoppie gravel” running between 0.7 and 1.3 cpht. Rooikoppie gravel refers loosely to deposits formed via weathering and erosion.

The plan calls for monthly production of 48,000 tonnes at a cost of $2.50 per tonne. The estimated value of recovered diamonds ranges between US$300 and US$600 per carat. At full steam, cash flow is pegged at $2.5 million.

The ongoing preproduction phase at London is part of a long-term feasibility test, a common practice in South Africa.