Botswana Diamonds has projects in South Africa, Botswana, and Zimbabwe through a joint venture. In Zimbabwe, uncertainty remains over diamond mining rights amid government changes. The company is also pursuing a bulk sampling program in South Africa through a partner and hopes to generate initial revenue while assuming little risk or capital costs. However, the difficult market conditions for junior miners means Botswana Diamonds faces challenges in raising financing to advance its projects.

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Mining Journal
Botswana Diamonds, an AIM-lister with more established projects in South Africa and Botswana, has a joint venture
in Zimbabwe with the struggling Vast Resources.
Vast has an agreement with Red Mercury, an official community organisation, which means it is allowed to explore
for precious stones, and brought in Botswana as 13% partner for its expertise in the sector.
Managing director James Campbell said it had been a tough 12 months for juniors but thought the uncertainty over
the ZCDC set-up would pass.
"The heritage concession remained untouched through the whole Mugabe regime [and] I'm reasonably confident that
it will actually prevail in the fullness of time," he told Mining Journal in Cape Town.
"Yes, there is artisanal activity taking place on it and people seem to think a lot of diamonds are being recovered.
Indeed they are, but they are far from making even a tiny dent in the diamond resource itself."
Campbell said the rights confusion had been a surprise.
"Interestingly, there was a conference in September last year called the African MIning Summit, run by a British group,
in Gabarone, where the deputy minister of mines of Zimbabwe attended, and at that point of time, there was no
issue," he said.
"It has only become an issue now; I'm not quite sure what the issue is. I think it's a communication issue."
The Zimbabwean government announced in late January it would only accept "foreign participation by way of
selecting companies from Russia (Alrosa) and China (Anjin)".

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Diamond industry expert Paul Zimnisky told Mining Journal the country was still a tough ask for investors.
"Zimbabwe is certainly geologically prospective for diamonds, however the geopolitical situation has been a huge
drawback in the country," he said.
"The government nationalised the Marange diamond mines in 2016, so you can imagine how disconcerting that is for
new outside private mining investment.
"In addition, there are many other red flags with regard to operating in Marange."
Zimnisky flagged Alrosa's involvement in Angola as a sign it was comfortable in "similarly challenging" environments.
Zimbabwe has also turned to the Russian government recently for financial help as other countries have shunned it
because of the violence inflicted on protesters around the country.
Vast said last month its local partner was still going through the mining licence application process in Zimbabwe.
Zimnisky said both Vast and Botswana's micro-cap status made financing tough already "on top of the other
challenges".
Away from Zimbabwe, where any benefit to Botswana shareholders will be long-term at best, the company's
prospects provide a window into operating across southern Africa.
In South Africa, where most of the company's cash is currently going, it is about to start a bulk sampling programme
with Palaeo Minerals at Thorny River which will see at least 1.2 million tonnes ‘sampled'.
Botswana Diamonds will get 12% of the revenue from its own project because Palaeo is doing the mining and
processing. The expected run rate is 30,000 tonnes per month at 46-74 carats per hundred tonnes and the company
estimated a value of US$120- $220 per carat last year.
Campbell said the low proportion of revenue was fine because the company assumed little risk and little capex
responsibility.
"[Palaeo is] taking all the risk, all the capital and operating risk," he said.
"We'll basically bulk sample - we can't call it mining, because mining requires a resource and we don't have a resource
yet.
"In diamonds, you need 500ct for inferred, and 5,000ct for indicated. The cost of delivering an indicated resource on
Thorny River itself would be in excess of £2 million (US$2.6 million), so I'm not having to generate that and receiving
revenue, which is very exciting."
Cash smoulder
Botswana Diamonds spent £500,000-750,000 a year on exploration, Campbell said.
Last month, the company raised £370,000 through founding shareholders in Dublin.
The spending plan shows there is some capex to come to get the Thorny River sampling project going, with drilling to
start this month.
The capital raising showed the dilemma faced by AIM companies right now; they need cash to keep newsflow going
and investors interested, but the weak market means heavy dilution for any sum raised because of low share prices.
Botswana's share price is down 47% from February last year, at 0.6p per share.
Campbell said it was a "very difficult" time for small-cap companies to raise money.
After this year, the cash raising needs should be reduced by the revenue from Thorny River and the prospect of a
"large diamond producer" coming on board with the company's assets in Botswana expected to energise the share
price.

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There was clearly interest in the story during Mining Indaba with a one-day share price jump of 25% at the start of the
week.
Meanwhile, the more stable country in the region, Botswana, might be a good host, but the company still has some
issues there (and some promise).
Botswana Diamonds' subsidiary in Botswana, Sunland, was a joint venture with Alrosa until last year. The company
said in November a new producer would step in but this has not been confirmed yet.
The other Botswana project, Maibwe, is stuck as a joint venture partner went bust and a liquidator is selling the stake.