Snowfield Development Corp. SWFCF

De Beers buys more African Diamonds

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De Beers Buys More African Diamonds By Charlotte Mathews / 21 Sep 2006 at 07:08 AM EDT Source: Resource Investor.com https://www.resourceinvestor.com/pebble.asp?relid=24025 JOHANNESBURG (Business Day) -- Diamond giant De Beers had bought another 1.22 million shares in diamond exploration company African Diamonds for £2.1 million (US$3.98 million) to raise its stake to 5.96%, African Diamonds [LSE:AFD] said yesterday. The deal is insignificant in relation to the size of De Beers but underlines the group’s interest in African Diamonds’ findings, particularly in Botswana. De Beers has a policy of partnering junior mining exploration companies in various countries, including Cratonic Resources, Firestone Diamonds, Mvelaphanda Resources and Tawana Resources. African Diamonds, which is listed on London’s Alternative Investment Market (AIM) and the Botswana Stock Exchange, has diamond exploration activities in Botswana, Sierra Leone and Guinea. Three years ago African Diamonds and De Beers entered a joint venture to explore properties in Botswana, with priority given to areas around De Beers’ Orapa mine, where there are 21 known kimberlites. Kimberlites are carrot-shaped geological structures known to hold diamonds but it is extremely rare for them to be economically mineable. Ownership of the joint venture is 49% African Diamonds and 51% De Beers, with De Beers funding exploration up to a bankable feasibility study, on completion of which De Beers’ stake will rise to 70%. In a presentation in March, African Diamonds management said its AK6 discovery was likely to be the next high-value diamond mine in Botswana. The AK6 kimberlite pipe is estimated to contain 59-million metric tons of diamondiferous ore at a grade of 30 carats-plus per 100 tons and a value of about $180 a carat. The partners are busy with second-phase large-diameter drilling as well as geological, metallurgical, processing and financial studies. De Beers GM for group exploration James Campbell said in a presentation to the Westwind Partners Diamond Conference in May that the pre-feasibility study phase at AK6 should begin in the second quarter of next year and would take nine months. A feasibility study would take a further nine months.