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Pisani The Brazilian Reality Of The Diamond Small Scale Mining
 

Pisani The Brazilian Reality Of The Diamond Small Scale Mining

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    Pisani The Brazilian Reality Of The Diamond Small Scale Mining Pisani The Brazilian Reality Of The Diamond Small Scale Mining Presentation Transcript

    • THE BRAZILIAN REALITY OF THE DIAMOND SMALL-SCALE MINING JOSÉ RICARDO THIBES PISANI
    • How big is the global diamond industry?
      • Total Production: 160 milion carats per year
      • Value of production: + $ 13 bilion per year
      • Global Diamond Exploration Expenditures in 2006 US$ 1 billion.
      • DIAMOND INDUSTRY IS RELATIVELLY SMALL INDUSTRY, BUT....
      • IT IS ONE OF THE MOST PROFITABLE MINING SECTOR
      • The Major Minind Players in 2006/2007
      • De Beers 51M carats valued at $6B
      • Rio Tinto 35M carats valued at $1.3B
      • Alrosa 31M carts valued at $2.3B
      • BHP Bilinton 2.5M carats valued at $440M
      • Gem Diamonds 0.9M carats valued at $355M
      Source: RBC Capital Markets
    • Source: Trends in Cdn Mineral Exploration & Pers. Communication with Operating Companies in Brazil; Ontario Ministry of Northern Development and Mines Diamond Exploration Expenditures (US$ Millions) In 1991, the first economic kimberlite pipe in Canada was discovered at Pointe Lake > US$ 2 billion was invested in diamond exploration since 1991 and this results in at least 4 new diamond mines = more than US$ 2 billion of diamond/ year.
    • Diamond Occurrences in Brazil
    • Use the excellent work done by De Beers, Rio Tinto, CPRM, etc. > 1.000 kimberlites discovered since 1966 (Redondão Kimberlite);
    • Why the “Majors” walked away from Brazil The “majors” diamond companies did a very good and successful exploration work in Brazil; however they were looking only for WORLD CLASS MINES . Note: Just for reference most of the kimberlites which comprise Point Lake (Ekati Mine) area are smaller than 3 hectares in size. Ekati produces US$ 500 million/ year for at least 25 years. Many small bodies can make a big mine.
    • Who were the diamond producers in Brazil?
    • Diamond Mining Companies Just for comparason: more than 100 diamond companies are listed and exploring in Canada........
    • Chapada Mine Duas Barras Mine Producing Mines
    • Duas Barras Chapada Producing Mines Annual Production 30,000 cts Diamond Value US$ 165 / ct Cash Cost of Production US$ 93/ ct Mine Life 5 Years Annual Production 20,000 cts Diamond Value US$498 /ct Cash Cost of Production US$ 465 / ct Mine Life 4 Years
    • Duas Barras Mine Minas Gerais State
    • Duas Barras Mine Minas Gerais State
      • located along the Jequitinhonha River in northern Minas Gerais State of Brazil
      • Commercial production commenced in September 2007 with total diamond sales of $5.2M from 31,640.82 carats & average sales value of US$164 per carat.
      • NI43-101 compliant indicated resources of 1.6 M bcm at 0.16 cts/bcm and 0.18 gr Au/bcm & inferred resource of 0.8 M bcm at 0.16 cts/bcm and 0.18 gr Au/bcm
      • Deposit Characteristics:
        • Paleochannel / channel scour deposits with gravel thicknesses of up to 20 metres
        • Ore horizon comprised of upper “yellow gravels” (Fe-rich) grading 0.07 cts/bcm and lower “white gravels” grading in excess of 0.20 cts/bcm
      • Operating Performance:
        • ROM capacity of 80 to 100 tonnes per hour depending on ore type
        • Average recovered grade to date of 0.16 cts/bcm & 0.18 gr/bcm @ US$165 per carat and US$29 per gram Au
        • Gross value of ore = US$33 per bcm
        • Operating cost of US$14.86 per bcm or US$93 per carat
    • Chapada Mine Mato Grosso State
      • Located in the Mato Grasso State of Brazil, 80 km north east of the state capital of Cuiaba
      • Largest diamond mine operating in South America
      • Ni 43-101 compliant resource of 4.8 M bcm at 0.05 cts/bcm
      • Exploration concessions provide opportunity to expand production and resources
      • Deposit Characteristics:
        • The basal conglomerate of the Bauru Formation of varying thickness (up to 20m), which outcrops widely, is considered the most likely local source of diamonds found at Chapada
      • Operating Performance:
        • ROM capacity of 60 to 70 bcm per hour
        • Total sales to date of 32,516 carats @ $411 per carat
        • 2007 ore processed of 565,776 bcm for total carats of 17,892
      Chapada Mine Mato Grosso State
    • The Finance Crisis How the finance crisis will impact the diamond business in Brazil?
      • The diamond prices are already trading at discounts;
      • the smaller companies which do not have sustained production and positive cash flow will suffer due to the lack of raising capital opportunities.
      • A rush to sell projects, claims, equipments already start;
      • Downsizing is now the strategy for all junior diamond companies in Brazil.
    • How we can Change this Scenario? Partnership small companies and “garimpeiros” by: 1 – Share the same mining concessions (PLG’s, JV, etc.); 2 – Improving the processing from “garimpeiros” by using the companies technology. 3 – Improving the environmental reclamation in order to minimize the impact of the areas explored by garimperios.
    • How we can Change this Scenario? Brazilian Diamond Players   1 - Incentives in order to have diamond companies listed at BOVESPA; 2 - Finance and facilities to buy equipments and working capital; 3 -Training in order to have Brazilian diamond valuators with international recognition; 4 - Analysis the possibility to create a Brazilian Diamond Exchange Centre. 5 – Safe regulations and legal stability .
    • We need more Players – As soon as possible
    • Thank You