Loan puts Tirisano expansion on fast track

A loan from the Industrial Development Corporation of South Africa will enable Etruscan Resources (EET-T) and Mountain Lake Resources (MOA-V) to expand their Tirisano alluvial diamond mine in that country.

Subject to the deal’s closing, the pair will add more scrubbers and screens to the existing dense-media-separation plant in order to boost annual capacity to 960,000 from 600,000 cubic metres. The additions should translate into 8,400 more carats, bringing annual output to 27,600 carats.

The loan bears interest at the South African prime lending rate and matures in five years. However, the pair expect to repay it in a matter of months.

Also, Etruscan expects to begin constructing a second plant in the fall and finish it a year later. The Industrial Development Corporation and several other South African financial institutions have expressed interest in financing the project. Should it proceed, Tirisano’s annual capacity would rise to 2.7 million cubic metres and its annual production, to 78,000 carats. The mine life, on the other hand, would shrink to eight years.

Production will continue during both capital projects.

Bateman Minerals has been retained for procurement and construction.

Etruscan recently sold the final batch of stones pulled from a 100,000-tonne controlled mining block. In all, the block yielded 1,510 carats, including a yellow fancy and a 27-carat stone, that fetched an average of US$440 per carat — US$40 per carat more than the life-of-mine projection.

The next diamond auction is scheduled for early May.

At last report, Tirisano’s in situ indicated resource was 10.4 million cubic metres grading 2.9 carats per 100 cubic metres.

Etruscan operates and owns 51% of Tirisano. The remaining interest is divided among Mountain Lake, with 25%, and minority shareholders of a subsidiary through which Etruscan holds its interest, with 24%.