Botswana Diamonds progresses Sekaka acquisition
Botswana Diamonds announced on Monday that all conditions for the acquisition of Sekaka Diamonds had now been satisfied, adding that Sekaka's prospecting licence, which holds the KX36 high-grade kimberlite pipe, had also been extended for a further two years, to 30 September 2022.
It said the transaction had been approved by Petra's lenders and noteholders, as well as by the Botswana Minister of Mineral Resources, Green Technology and Energy Security.
Sekaka was Petra's exploration vehicle in Botswana, and holds three prospecting licenses in the Central Kalahari Game Reserve, being PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.
The acquisition also included an “extensive” database, built up over 15 years of exploration.
Botswana Diamonds described KX36 as a 3.5Ha kimberlite pipe, discovered by Sekaka, in the Kalahari.
The kimberlite was situated about 70 kilometres from Gem Diamonds' Ghaghoo Mine, and 260 kilometres north-west of Botswana's capital Gaborone.
Sekaka had undertaken extensive exploration work on KX36, including extensive core and large-diameter drilling.
There was a historic SAMREC-compliant indicated resource of 17.9 million tonnes at 35 cpht, and an inferred resource of 6.7 million tonnes at 36 cpht, estimated for the pipe by Z-Star in 2016.
As Sekaka owned 100% of KX36, gross and net resources were the same.
Sekaka was the operator of KX36, with Botswana Diamonds noting that it had not independently verified the historic resource estimate.
Modelling those grade estimates suggested overall grades of between 57 cpht and 76 cpht.
The estimated diamond value from the large-diameter drilling was $65 per carat, with an upside range of between $97 and $107 per carat, all assuming a 1.15mm bottom cut-off or +3 DTC diamond sieve.
Sekaka also held a recently constructed, fit-for-purpose bulk sampling plant on site.
The board said the sampling plant included crushing, scrubbing, dense media separation circuits and x-ray recovery modules within a secured area.
Sekaka's extensive diamond exploration database contained the results of work undertaken since 2005, with the data reportedly including that for airborne and ground magnetics, in addition to heavy mineral sampling.
Botswana Diamonds said it believed that the information contained in the database would provide “substantial support” to its future kimberlite exploration activities in Botswana.
The first deferred consideration cash payment of $0.15m would be payable on or about 20 November 2021, being the first anniversary of completion of the acquisition.
“We are grateful to the Botswana authorities for the quick approval of our acquisition of the KX36 discovery, the extension of the licence and the award of two surrounding licences,” said chairman John Teeling.
“We are convinced that a review and reworking of the existing database on KX36 will identify areas where the grade and volume can be improved.
“We have significant work done on this and are ready to go when exploration restrictions are lifted.”
Teeling said kimberlite pipes, like KX36, were “rarely, if ever” found on their own.
“It is of major importance that we got two adjacent licences where we are now very hopeful to find other kimberlites.
“The Kalahari Desert is a tough environment but finding something as rare as KX36 containing an estimated indicated resource of 17.9 million tons at 35cpht is very rare.
“The potential far outweighs the challenge.”
At 1400 GMT, shares in Botswana Diamonds were down 0.67% at 0.74p.