Namakwa Diamonds Limited (“Namakwa Diamonds” or the “Company”) announces that the Government of the Kingdom of Lesotho (“Government”) has transferred the mining lease to the Kao Kimberlite Pipe (“Kao”) to Namakwa Batla Diamonds Pty Ltd (“NBDL”), the Company’s joint venture with Batla Minerals SA (“Batla”), the Government and Lesotho investors. The Government has also entered into a mining agreement with NBDL (together, the “transaction”). African Alliance Lesotho (Pty) Limited provided corporate finance advice to NBDL.
· Namakwa Diamond’s first kimberlite
· Total resources of 173 million tons containing an estimated 12.4 million carats
· Phase I expected to produce 700,000 carats
· Life of mine in excess of 40 years
· Appointment of Keith Whitelock as Chief Technical Officer (Operations)
· Further expansion of Namakwa Diamond’s footprint across Southern Africa
Pursuant to the transaction, NBDL has agreed to settle the claims of certain Lesotho creditors of the previous incumbent of the Kao mining lease up to a maximum aggregate amount of ZAR 50.6m (US$6.6m). These claims remain subject to verification by the appointed liquidators and potential reduction.
Kao’s main kimberlite pipe is the largest in Lesotho and the fourth largest in Southern Africa at 19.8 hectares. It is situated at an altitude of 2,500m approximately 200km north of Maseru. It lies within a 20km radius of the diamond producing Letseng and Liqhobong mines. Resources for the Kao Pipe total 173 million tons (27Mt measured, 63Mt indicated and 83Mt inferred) containing an estimated 12.4 million carats.
The transaction provides two distinct advantages:
(i) a recognized kimberlite asset in Lesotho – an established centre for kimberlite mining with proven infrastructure and logistical capabilities; and
(ii) the JV with Batla and the Lesotho investors provides local experience and knowledge. Batla’s wholly owned subsidiary, Alluvial Ventures is the contracted operator for the weathered kimberlite deposits at the nearby producing Letseng mine.
The Company intends to develop Kao from its current internal resources and management anticipate 10M tons of kimberlite being processed for the recovery of 700,000 carats, over a five year period, Thereafter it is planned to ramp up production to 5M tons per annum with an expected life of mine in excess of 40 years.
The transaction underlines Namakwa Diamond’s strategy of acquiring low risk, high quality assets, with a short lead-time to production.
The Company also announces the appointment of Keith Whitelock as Chief Technical Officer (Operations). Keith, whose initial responsibilities will include heading up the Kao project, has over 40 years’ experience in diamond projects covering all aspects of locating, bulk sampling and mining of both alluvial and kimberlite deposits. Keith was employed by the original discoverer of Kao and the three other kimberlite pipes in the same area: Letseng, Liqhobong and Mothae. He worked with De Beers for 21 years and joins Namakwa Diamonds after 14 years as CEO of Letseng Diamonds during which time he led the constructing, commissioning and operating of the Letseng Mine.
Commenting, Namakwa Diamonds’ Chief Executive Nico Kruger said: “Kao represents a genuinely exciting development for the Company, signaling a move into a new southern African geographical region and our first kimberlite project. I am delighted that Keith Whitelock has agreed to lead this exciting project and lend his extensive experience to the wider operations of the Namakwa Diamonds Group.”