Modern Mining June 2018 article on Botswana Diamonds plc

1. DIAMONDS DIAMONDS
June 2018MODERN MINING2322MODERN MININGJune 2018
T
horny River is currently the ‘flag-
ship’ of BOD’s portfolio. It covers
three properties extending over
2 771 ha which – geologically
– form an extension to the Klip-
springer/Marsfontein kimberlite dyke pipe
system to the east of Mokopane in Limpopo
Province. As many readers will know, Mars-
fontein was mined between 1998 and 2000
by a De Beers/SouthernEra joint venture with
its production over its short life being a phe-
nomenal 1,9 million carats. The payback time
on the capital invested in the operation was a
mere three-and-a-half days, a feat which has
now become part of mining folklore.
While BOD will be very lucky indeed if the
Thorny River project ever delivers anything to
match Marsfontein, the company’s evaluation
of the three properties – which has included
several phases of percussion and diamond
drilling, microdiamond and petrographic
analysis and a bulk sampling programme
Thorny River diamond project
shows promising economics
A drill site in the Maibwe JV
project area in the Central
Kalahari Game Reserve in
Botswana.
Percussion drilling at the
Thorny River project in
South Africa’s Limpopo
Province.
Botswana Diamonds’ Execu-
tive Chairman, John Teeling
(on the far left of the photo),
with the shareholders of
Vutomi at the signing of
the earn-in agreement last
year. James Campbell, who
is both MD of Botswana
Diamonds and a Vutomi
shareholder, is on the far
right of the photo.
The Thorny River project of junior diamond exploration company Botswana Diamonds (BOD) is
showing considerable promise, with a Technical Economic Evaluation (TEE) Report indicating that
positive economics could potentially be achieved from a commercial mining operation. Modern
Mining’s Arthur Tassell recently caught up with BOD’s Managing Director, James Campbell, at the
Botswana Resource Sector Conference in Gaborone, and discussed with him the progress being made
by BOD on its portfolio of projects in Botswana and South Africa.
– has produced very promising results.
Says Campbell: “The TEE Report confirms
that the deposit is between 1,2 and 2 million
tons in size to a depth of 100 m with the grade
being between 46 and 74 cpht. It estimates the
carat values at between US$120 and US$220
per carat with the in-situ value being between
US$60 and US$140 per ton. Clearly, we still
need to refine these estimates but the figures, as
they stand, are very encouraging and the report
indicates that Thorny River has the potential to
be developed as a commercial mine using the
top end of the grade and value ranges.”
Part of BOD’s strategy is to explore in or near
areas of past diamond production and, consis-
tent with this philosophy, the company has
now added the Mooikloof property in Limpopo
Province to its project line-up. This is a known
2,5 ha diamondiferous kimberlite pipe which
was discovered by De Beers in 1986.
“It’s immediately adjacent to the Oaks mine,
which was a small but very successful mine
which De Beers operated from the late 1990s
through to 2007, in the process producing
1,4 million carats,” says Campbell (who knows
the mine well from the long career he enjoyed
at De Beers, which saw him reach the most
senior ranks of the company). “It’s also close to
the Lerala diamond mine – which is across the
Limpopo River in Botswana – and forms part of
the same geological belt – the Limpopo Mobile
Belt – that hosts Venetia. It’s certainly the right
address if you want to find diamonds.”
Campbell says that Mooikloof seems to have
passed through the hands of several operators
since being relinquished by De Beers. “There is
very little information available, however, on
what they did – if indeed anything – in terms
of exploration, so it’s pretty much a ‘grass roots’
site from our perspective,” he observes. “We’ll
now be applying modern ‘third generation’
exploration techniques to see whether past
explorers missed anything and whether it has
economic potential.”
It is, of course, possible for even operators
of the calibre of De Beers to get things wrong,
a classic case being the AK6 kimberlite in
Botswana, now the Karowe mine, famous for
its production of outsized gemstones, including
a plus 1 100-carat diamond which is the sec-
ond biggest ever to have been recovered from
a diamond mining operation. De Beers evalu-
ated AK6 in the early 1970s but dismissed it as
being uneconomic. African Diamonds in con-
junction with De Beers re-evaluated it in the
period between 2004 and 2007, determining
that it could in fact be economically developed.
De Beers, however, once again relinquished
its interest, selling out its stake to Lucara in
2008. Lucara in 2010 also bought out African
Diamonds’ interest and went on to build the
mine, which was opened in 2012.
Campbell, of course, was the MD of African
Diamonds while John Teeling, currently BOD’s
Executive Chairman, was Chairman of the
company. The two men have been re-united in
BOD, which started life in 2011 as the inheritor
of the exploration assets of African Diamonds.
These were all in Botswana, which explains the
name adopted for the company. BOD is dual
listed in Botswana and London and currently
has a market cap of £5,6 million.
Apart from Limpopo Province, BOD is
also active in the Free State. In October last
year, it announced the ‘re-discovery’ of eight
Group 1 kimberlites in the province in an
area which hosts the famous Jagersfontein and
Koffiefontein mines and which is also close to
the Kimberley mine in the Northern Cape.
“The project area, which now covers
around 36 000 ha of ground, was identified
using a range of techniques, including satel-
lite imagery and the examination of historical

2. DIAMONDS DIAMONDS
June 2018MODERN MINING2524MODERN MININGJune 2018
The small processing plant
used to process samples
from the Maibwe joint
venture.
Diamonds recovered from
the bulk sampling at Thorny
River.
In the field at Thorny River.
The project area extends
over 2 771 ha.
records housed in archives in Bloemfontein
and Kimberley and the Africana Museum in
Johannesburg,” recounts Campbell. “Using the
identified anomalies as a base, research indi-
cated that a number of small diamond mines
or workings existed in the area for some time
prior to 1880. They were closed due to an eco-
nomic recession at the time and most of the
records disappeared during the Anglo-Boer
War. However, there was enough information
available to set us on the right track and we
were able to re-discover the kimberlites that
underpinned the historic mining.”
BOD has now completed detailed ground
geophysical work which has revealed that the
kimberlites range from 0,3 to 1,15 ha in size,
the biggest being Vlakfontein. The company
is currently assessing the diamond indicator
values in each pipe to decide pri-
orities for drilling.
All BOD’s South African proj-
ects derive from an option and
earn-in agreement it announced
in February last year with
Vutomi Mining and Razorbill
Properties 12 (collectively known
as Vutomi). Interestingly, a size-
able chunk of Vutomi (30 %) is
owned by Campbell and his long-
time colleague John Shelton, who
worked with him at both De Beers
and Rockwell Diamonds. “Our
main reason for investing on a
personal basis in Vutomi was to
persuade the BOD board that it
had top class exploration prop-
erties,” Campbell notes. “Putting
our own money into the venture
was a way of demonstrating our
confidence in the assets.”
In Botswana, the original focus
for BOD, the company remains very active. It
has two joint ventures (JVs) in the country. One
– Sunland Minerals – is a 50/50 JV with Alrosa
of Russia, only rivalled worldwide as a dia-
mond player by De Beers. The other – Maibwe
– is a JV between BCL (51 %), Future Minerals
(20 %) and Siseko (29 %), with BOD’s interest
deriving from its 51 % stake in Siseko.
The Sunland JV is mainly targeting the
Central Kalahari Game Reserve (CKGR), already
home to one diamond mine, Ghaghoo, which
is currently on care and maintenance, and also
Petra’s KX-36 discovery. It also holds several
licences in the Orapa Kimberlite Field. “The
current field programme for H1 2018 – which
is being supervised by BOD – has seen us fol-
lowing up on a number of previously identified
priority geophysical targets in the CKGR using
ground magnetics and soil sampling. The
objective is to turn the geophysical targets into
drill targets and we have a drilling programme
planned for H2,” says Campbell.
The Maibwe JV is also focused on the CKGR
and has 10 licences in the south west of the
game reserve. Kimberlites in the project area
have delivered what Campbell calls “some of
the most enticing microdiamond results I’ve
ever seen.” Progress, however, has been held
up by the fact that BCL – best known for own-
ing the Selebi-Phikwe nickel/copper mine – is
in liquidation and unable to finance an agreed
work programme.
“We would like to buy BCL’s share of the JV
and we’ve already held talks with the liquida-
tor,” states Campbell. “We believe strongly in
the project and want to move it forward as soon
as we can.”
While most of its efforts will continue
to be concentrated in Botswana and South
Africa, BOD has now also taken small steps
into Zimbabwe, recently announcing a
‘Memorandum of Understanding’ with Vast
Resources, which – among other things – oper-
ates the Pickstone-Peerless gold mine in that
country. In essence, the two companies have
agreed to exchange information from past
exploration on areas prospective for diamonds
in Zimbabwe and work towards establishing
a special purpose vehicle which will develop
and exploit any diamond resources identified.
“Zimbabwe represents a natural extension
of our operations,” notes Campbell. “Like
Botswana and South Africa, it lies on the
Kaapvaal Craton, which is the most prospec-
tive craton in the world for diamonds, and it
is also very under-explored for diamonds. Vast
is now mainly engaged in gold mining but it
so happens that it is the owner of an excellent
database relating to diamonds in Zimbabwe. We
have built up our own database on diamonds
in Zimbabwe so, between us, we have a great
resource, which will serve to guide our efforts.”
On the subject of diamond exploration
generally, Campbell stresses the need for a com-
pany such as BOD to have a generous pipeline
of projects. “Inevitably, many prospects will
not meet hurdle rates so one needs to accept
that projects will fall out of the pipeline on a
fairly regular basis. As an example, we’ve now
decided not to pursue our Ontevreden pipe
project, located near the mothballed Helam
mine of Petra. This was a geophysical anomaly
with great mineral chemistry and great geo-
chemistry. Our drilling confirmed the existence
of a kimberlite pipe but also showed that it was
much smaller than anticipated and didn’t war-
rant any further work.”
Campbell makes the point that BOD is one
of only a handful of junior diamond explorers
operating in Botswana and South Africa. “In
South Africa, the only other junior company
undertaking diamond exploration is BlueRock
Diamonds while in Botswana there are only two
active juniors apart from ourselves – Pangolin
Diamonds and Tsodilo Resources. While this
doesn’t reflect well on the health of the dia-
mond exploration industry in South Africa, the
upside is that good ground is readily available.”
Summing up, Campbell says BOD’s vision
is to make the next commercial diamond dis-
covery. “If we’re successful, the rewards could
potentially be huge. The original shareholders
in African Diamonds, which is really BOD’s pre-
decessor company, got their investment back 25
times over. Certainly, this was an unusual case,
given the incredible quality of AK6, and prob-
ably unlikely to be repeated. Nevertheless, we
in BOD believe there are good kimberlites still
to be found and that we’re looking in the right
places with the right partners using the right
technology,” he concludes. 
“Inevitably, many
prospects will not
meet hurdle rates
so one needs
to accept that
projects will fall
out of the pipeline
on a fairly regular
basis.”