Lerala Diamond Mine reopens
Brian Benza | Tuesday April 12, 2016 18:00
Promoters of the mine, Kimberley Diamonds Ltd (KDL) yesterday announced open pit mining operations have commenced at Lerala construction of the processing plant due for completion later this month.
“Assuming that re-commissioning of the process plant proceeds as planned, the first production and recovery of diamonds is expected in April 2016, and the first diamond sales are expected in June 2016,” said the company.
KDL, which bought the mine in the central district in 2013 from UK-based Mantle Diamonds, has in the past year undertaken various fund raising initiatives to finance the reopening of the mine.
Citing a weak diamond market, Mantle placed Lerala Mine under care-and-maintenance in July 2012, after only five months in operation, throwing about 100 people out of work.
Commencement of mining operations at Lerala follows the awarding of a $47 million (P380 million) open pit mining contract to South Africa’s Basil Read in February.
Basil Read mobilised staff and equipment to the diamond mine during the months of February and March with mining then commencing early in April from the K3 kimberlite pipe and operations will continue to develop a buffer stockpile of fresh kimberlite ore.
“Mining will then ramp up in line with the current production schedule to provide a consistent feed to the processing plant once processing commences.
“Plant construction activities continue to progress well despite recent delays experienced due to higher than usual rainfall being experienced at site. It is expected that plant construction will be completed by mid-April, with re-commissioning then expected to commence later in April,” said KDL.
The mineral resources of the diamond mine as at December 31, 2015 was estimated as 20.1 million tonnes (Mt) at 24.2 carats per hundred tonnes (cpht) containing 4.9 million carats.
The company has targeted yearly output of 360,000 carats from Lerala over the next seven years.
To market the output, the Australian stock exchange listed company has entered into a diamond sales agreement with a third party, Restwell Investments.
Under the terms of the sales agreement, Restwell agreed to acquire $6 million (P66 million) of diamonds produced at the Lerala after production commences, on a timetable and at a price agreed between the parties.
Restwell also agreed to pre-pay $1 million to Lerala, which will be applied to pre-production costs. The $1 million will be repayable by the supply of diamonds from Lerala to Restwell under the terms of the Sales Agreement.
The reopening of the mine comes at a time when the mining sector has been hit hard by job losses largely due to the slump in commodity prices. Since last year, Boseto Mine, African Copper and Moolman mining have all closed shop and laid off thousands of workers with diamond miner, Ghaghoo also reported to finalising a retrenchment exercise.