Latest Tirisano auction a hit (April 15, 2003)

The last parcel of diamonds pulled from a test panel dug at the Tirisano alluvial diamond mine in South Africa has fetched more than expected and lends further support to its revenue projections, reports Etruscan Resources (EET-T).

Etruscan advanced Tirisano to production last November, only to soon switch gears after encountering problems in the plant. Basically, the more volumous clay-rich yellow gravels, which account for 85% for the known resource, proved more troublesome to process than expected.

Accordingly, the company selected a 100,000-tonne section of the deposit and began mining it in 5,000-tonne stages to fine-tune the flowsheet. Modifications to the plant were completed in February, and more scrubbers are being added in order to increase throughput and availability rates.

The recent parcel, weighing 259 carats, fetched US$498 per carat, putting the average for the bunch at US$440 per carat — US$40 per carat more than the life-of-mine projection. The whole lot weighed 1,510 carats and included a yellow fancy and a 27-carat stone.

In terms of revenue, the mined block generated US$6.64 per tonne of gravel treated, or US20 more than the life-of-mine projection; in terms of grade, it averaged 1.51 carats per tonne, or 0.09 carat per tonne less than predicted.

At full speed, Tirisano is expected to produce 19,200 carats per year at an average operating cost of US$2.74 per tonne of gravel treated. Annual revenue is projected at US$7.7 million and annual operating income, before taxes, at US$4.4 million.

Etruscan may twin the existing plant, which would have the affect of reducing the mine’s life to 8 years but doubling its output, assuming no more problems are encountered. Final engineering and cost studies are underway.

At last report, Tirisano hosted an in-situ indicated resource of 10.4 million cubic metre grading 2.9 carats per 100 cubic metres. (Etruscan now uses cubic metres to conform to industry standards. The converted grade for the control mining block is 2.72 carats per 100 cubic metres.)

The diamonds are contained in what is known as a sinkhole –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 along the extensive paleochannel.

Etruscan operates and owns a 75% stake in the Tirisano mine. The remaining interest is held by Mountain Lake Resources (MOA-V).