Botswana Diamonds, Alrosa to start high powered exploration phase in Orapa

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John Teeling

John Teeling

Botswana Diamonds (BOD) and its partner, Alrosa will commence fieldwork in Orapa early next year following months of analysing data and identifying targets. BOD revealed that geologists from Russia will begin work on an area which contains a top ranking target.

The detailed work programme will commence in January 2014 with the objective to refine drill targets followed by a drilling programme in March/April 2014. However, the company pointed out that although there are high expectations for this work, ‘it is grassroots exploration.’

“Botswana Diamonds is about to enter a high powered phase of exploration.  In early January 2014 the first ground phase of our joint venture with Alrosa will begin when four Russian geologists will start fieldwork on PL117 in the Orapa area of Botswana,” stated John Teeling, Chairman of BOD.

The company, which was previously called African Diamonds and discovered Karowe mine, now owned by Lucara Diamond Corp signed a joint venture agreement with the Russian major in July 2013 to explore the Orapa area of Botswana. It also holds ground in the CKGR through a joint venture with a South African company while BOD has a sole ownership of three licences 30 km east of the Letlhakane mine.

The Alrosa technology will be deployed in the country, which has been monopolised by Dee Beers over the years. “For a century De Beers maintained an orderly market in diamonds.  They held a virtual monopoly on supply which is the key to controlling prices.  In recent years there has been significant structural change and De Beers’ monopoly is no longer (there),” Teeling explained.

“Our partner, Alrosa, the recently listed Russian producer, is now the largest diamond producer in the world.  A number of multinational miners, RTZ and BHP tried to gain a foothold in the industry with limited success.  A number of independents have emerged with a small impact.”

He added that over decades their partner has refined techniques and has had remarkable success to the extent that they are now the number one diamond producer in the world by volume, with 17 producing mines.

Teeling revealed that the Alrosa hierarchy believes that their techniques can work in Botswana. “For 18 months Alrosa and Botswana Diamonds have gathered and analysed as much data as possible on Botswana geology in the Orapa region – the logical place to start where four of the world’s great diamond mines exist.”

The top target identified by Alrosa was in an area covered by a small 2.9 sq km licence held by local interests.  In 2004, Teeling said they discovered a five hectare kimberlites, AK10, containing diamonds and spent over $2,000,000 exploring it only to drop it in favour of the AK6 discovery 6 km to the South.  AK6 is now the Karowe mine of Lucara.

There are high expectations in the world as demand for diamond is on the rebound coupled with the growth in the middle class. “Ladies all over the world want diamonds.  As 2 billion people become middle class in the next two decades the demand for gem quality diamonds is expected to grow at a faster rate than the supply of new diamonds coming to market.  The result is expected to be rising prices,” Teeling observed.

“Contrast this benign environment with the economic turmoil in the rough diamond segment, the weakness in the share prices of diamond producers and the depression in the prices of diamond explorers who find it almost impossible to raise fresh equity.”

Other Exploration Activities

Teeling said while Alrosa is focused on the Orapa region they ran an analysis of the Gope area of Botswana.  This is in the Kalahari Game Reserve so environmental considerations are paramount.  The area is highly prospective.  The Ghagoo mine is expected to come on stream in late 2014 while a significant discovery has been made on KX36 in the East of the area.

 South African and local interests had obtained a substantial block of 13 licences covering much of the area.  Botswana Diamonds has a joint venture with the licence holders whereby we can earn a 51% interest in the block by spending US$940,000.  Farming in makes sense.  If you discover something exploration spending very quickly brings you to 95%.  If you find nothing it matters little what percentage you hold.

“Our geologists, with the assistance of Alrosa, have identified a series of targets which, finance permitting, we will explore in 2014.”

“We had high hopes for PL170 a 100% owned exploration licence to the West of Orapa.  The ground has good geophysical signatures while diamond indicator minerals, garnets, ilmenities and spinels were found.  We drilled 4 holes in early 2013 but found no kimberlites.”

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