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The farms cover a 9-km-long portion of the Zwartplaat gravels, which lie midway between the Ventersdorp and Mooi River group of properties. A section of Ventersdorp is being developed for commercial production.
To earn 100% interests in the three new properties, Etruscan and Mountain Lake must pay combined monthly rental fees of R1,000 over two years and slightly more in the third year. The properties can be bought outright at any point at R2 million apiece, and a 10% royalty is payable on any gems recovered by bulk sampling.
“The royalty is a little high, but we thought, what the heck?” says David Duncan, Etruscan’s senior geologist, adding that the acquisitions bring the companies closer to their overall acquisition goals.
The Zwartplaat gravels are believed to have been deposited by a paleo-river system that cut through underlying dolomites marked by extensive sinkholes and elongate gorges. An actual resource has never been outlined, owing to a lack of exploration, but local miners have been picking up gems for years.
According to historical records, the properties yielded 47,570 carats of diamonds until 1984. Subsequent records are considered unreliable.
Exploration is to begin shortly.
Etruscan and Mountain Lake also report that development on the Kooitgedacht farm remains on schedule and budget. About US$2 million is expected to have been spent by the time commerical production begins in September.
Johannesburg-based Manhattan Mining Equipment is charged with construction and commissioning of the 1.2-million-tonne-per-year processing plant. The plant is designed to screen and scrub 200 tonnes of alluvium per hour, then separate 50 tonnes of the densest material, including diamonds, for final passage through an X-ray sorter.
Known gravel resources are pegged at more than 12 million tonnes, which have historically averaged 1.6 carats per 100 tonnes. This is sufficient for 10 years of production at the projected rate, during which time 19,200 carats should be yielded annually.
The operation is expected to generate roughly US$28.5 million in cash flow, after taxes.
Meanwhile, ongoing bulk sampling at the neighbouring Hartbeestlaagte tenement continues to confirm expectations. Up until mid-May, the program had yielded 4,447 gems weighing 4,804 carats, for an average of 1.08 carats per stone. The largest stone weighed 16.5 carats.
Since early 2000, small-scale contract miners have dug 16 pits over a 3-km portion of the favourable 15-km long East Run deposit to extract 252,000 tonnes of shallow and deep gravels. This translates into an average grade of 1.9 carats per 100 tonnes, slightly higher than the average for the portion under development.
Diamond valuations are also in line with expectations, averaging US$400 per carat.
Kooitgedacht and Hartbeestlaagte are two of three neighbouring farms that fall under the Ventersdorp banner. The Mooi project comprises four adjoining farms and is said to be yielding similarly positive results from bulk sampling.
Etruscan holds a 75% interest in the joint venture; Mountain Lake, the remainder.
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