Hello gemsearcher,
I just had a conversation with one of the folks at SUF, and he tried to put into more simple terms just what was happening at Camafuca. I was quite pleased, so I thought I'd try to relay his words. These are my words, however, and since I'm not a geologist, please take them with a grain of salt:
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The basic conclusion is that the initial sampling points to a grade in a substantial part of the kimberlite (the EKG phase of kimberlite) that is much higher than previously thought. While the processing of the bulk sample (ongoing, results towards the end of August) will confirm both grade and valuation, it appears that the grade will be about 3-3.5 times that originally calcuated by the previous work (done by DIAMANG, with technical help from our friends at De Beers).
Most of the work done so far has been on the east side, so the west is still additive to potential. The feeling is that somewhere in the neighbourhood of 10 million tonnes of this EKG material (keep in mind this is preliminary) can be easily reached for quick mining. The costs of startup would be about US$25 million for a 3,500 tpd operation. All supplies could be flown in. In order to fast track this potential development, some testing of kimberlite will be done in Europe. The stones recovered to date look good, which should value them somewhere in the middle of the range typical of kimberlitic diamond recoveries.
The security of the operation is appropriate. A town nearby houses several hundred govenrment soldiers, with ongoing alluvial operations all around. The working and camp areas have long been secured, and the nearest major UNITA activity has been several hundred kilometres away, although banditry is an ongoing problem. A major kimberlite pipe mine, about 100km away, started production about a year ago, has produced around 1 million carats, and has reported no serious security problems.
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So, I feel pretty positive about this release. The potential to add to revenues in a year or two, with development in a modular fashion, would seem to answer some concerns about cash flow after M1 runs out (tho' further exploration on both Marsfontein and Klipsringer will add to mining lifespan), with the potential of adding massive amounts of reserves. Additionally, the EKG stuff is found near the edge of the pipe, and may extend to some depth. Looks pretty good, pending the bulk sampling and valuations.
Regards,
Confluence |
