Klipspringer Diamond Mine

Klipspringer is located 250 km north of Johannesburg. Currently, there is a sizeable tailings retreatment project in operation on a profit-share basis. The Group also holds a 74% interest in the underground mine (currently on care and maintenance) and is seeking to introduce a JV operating partner to restart the mine.

Tailings Retreatment

Our processing JV partner, Greenhurst Mining, operates the retreatment of our tailings project on a profit-share basis. The fine tailings (slimes) retreatment operation started in 2012, and ended November in 2016. Following a very positive bulk residue sample test, a new agreement was signed with Greenhurst in late in 2016 to process the Marsfontein coarse tailings. It is expected that these tailings will have higher grades and be more profitable than the slimes project because when De Beers operated the mine in the late 90s, Marsfontein was one of the best performing diamond mines in the world. The coarse tailings retreatment project should take about three years to complete.

The Group will earn 30% of the project net revenue without having to contribute to expenses. This is expected to equate to approximately $800,000 per year which should more than cover the costs of care and maintenance of the underground mine, licences, site supervision and security. The terms of the agreement oblige Gemcore to refurbish several parts of the existing processing plant for use in the retreatment process.


RETREAT PRODUCTION

    FY2016 FY2015
Tonnes Treated (t) 202,623 178,006
Head grade (cpht) 55.3 59.9
Recovery (%) 89.6 98.5
Diamond Produced (Carats) 112,060 406,593
Diamonds Sold (Carats) 100,409 95,062
Diamonds Sold ($'m) 1.2 1.4
Average Price ($/ct) 18.72 19.68
Klipspringer Diamond mine JV

The Klipspringer Diamond Mine is a joint venture between Asa Resource and Naka Diamond Mining (Pty) Ltd (“Naka”), a Black Economic Empowerment company.

The Group previously held 69.77% of the equity. However, when fresh capital was required in 2015, our minority holder opted not to participate, with the unintended consequence of pushing our stake over the threshold of 74% permitted under South African’s Black Economic Empowerment (BEE) regulations.

As a result of a severe weather incident in 2011, which flooded the shaft bottom and lower (7) level of the Leopard fissure, the mine was placed on care and maintenance. After the flooding the mine was mothballed and no processing of primary ore was done since that time. Dewatering of the mine is ongoing and flood protection mechanisms put in place to prevent a recurrence. Care and maintenance will continue until a source of finance is secured to restart the mine and has ensured that the mine is in a position to take advantage of when more favourable market conditions prevail. The Group continues to evaluate options with other diamond producers to re-open the underground operation along the Leopard fissure.

In recent years there have been two programmes to process Klipspringer’s substantial tailings. Our specialist JV tailings processing partner, Gemcore, is refurbishing parts of the processing plant as part of their tailings re-treatment contract.

 

Klipspringer Leopard fissure

Klipspringer consists of several en echelon (staggered or overlapping) kimberlite fissures and blows trending in a northeast orientation, and includes the Leopard Fissure, the Sugarbird Fissure, the Sugarbird Blow, the Kudu Fissure, and the Kudu Blow, amongst others.

 

map_prospecting_mining_rights@2x

 

Leopard fissure — Resource

Measured, indicated and inferred resource size – Gross 1,630,000 carats (1,150,000 carats attributable) of contained diamonds over a strike length 3,200m and depth 500m:

 

  Tonnes (’000t) Gross grade (cpht)(1) Contained diamonds (cts)

Measured
211 51.57 110,000
Indicated 433 51.57 220,000
Inferred 1,565 83.00 1,300,000
Total 2,209 73.83 1,631,000

 

  • 210,000t of proven reserves at a grade of 51.57cpht have been transferred to measured resources while the mine is on care and maintenance.
  • 433,000t of probable reserves at a grade of 51.57cpht have been transferred to indicated resources while the mine is on care and maintenance.
  • Resource and reserve bottom cut-off: 1,2mm.
  • Measured resources are classified as 1 level below current workings, or where a block is bounded above and below by current workings.
  • Indicated resources are classified as 2 levels below measured resources.
  • Inferred resources are classified as 3 levels below indicated resources, or where drill holes have intersected the kimberlite across strike more than 2 levels below the measured resource.
  • Measured and Indicated resources have been converted to reserves by applying historically derived external dilution and in-stope loss factors to resources tonnages and grades.