Partners crank up Klipgat (June 23, 2005)

The South African government has granted Etruscan Diamonds a mining permit for the Klipgat concession, 40 km east of the Tirisano diamond mine in Ventersdorp, South Africa.

Contract mining has already resumed on the eastern portion of the concession, where contractor Gothoma Diggings produced some 16,500 carats worth of diamond between February 2002 and April 2004. Those stones sold for more than US$6.4 million, or an average of US$392 per carat.

Development plans at Klipgat call for some 40,000 tonnes of gravels from the Mooi River valley to be processed over four months. The results from bulk sampling and reverse-circulation drilling will form the basis of a feasibility study for a new diamond recovery plant.

Bulk sampling will focus on a geophysical sinkhole target measuring 300 metres by 1.2 km. By comparison, the Tirisano diamond mine currently targets gravels from an 800-metre-by-350-metre sinkhole.

Klipgat is being developed in partnership with the Bakwena Ba Mare A Phogole Community, the local black economic empowerment (BEE) community.

Etruscan Diamonds is owned 51% by Etruscan Resources and 25% by Mountain Lake (MOA-V), with the remainder held by several private investors, including officers and directors of Etruscan.

Etruscan Diamonds Mountain Lake have also been granted a prospecting permit for the Mooi River concessions, immediately to the south. Ground-based gravity surveying will follow up on three sinkhole targets identified during previous airborne gravity surveying. Drilling is also planned.

The Mooi River concessions are being developed in partnership with the WakeMin Consortium BEE group; the local community and women’s groups, including the Ngakane community will hold at least 40% of WakeMin.

In mid-June, Mvelaphanda Exploration earned a 50% interest in the Tirisano mine by completing an expansion of the plant throughput to more than 157,000 tonnes over 30 days. The $5-million campaign included the addition of a wet front end, a water thickener to allow for maximum water recycling, and an upgrade of the final diamond recovery (x-ray sorting) equipment.

Mvelaphanda Exploration is shared equally by Trans Hex Group, South Africa’s second-largest diamond producer, and BEE company Mvelaphanda Resources.

Tirisano recently sold a 1,245-carats parcel of diamonds for US$754,470, or US$606 per carat; that’s more than US$200 per carat better than the original economic modeling of the project. The package included stones ranging from 0.25 to 24.36 carats.