botswana diamonds - feb 2011

8/3/2019 Botswana Diamonds - Feb 2011

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Company Synopsis

AIM listed company with late stage exploration /

development projects located in the best diamond

address in the world Botswana.

Led by an experienced team with successful trackrecord of mine delivery.

Apart from Botswana, the team has been exploring

potential opportunities in Zimbabwe and Cameroon.

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Corporate

Listing on AIM February 2011, market capitalisation of 7m

Expected listing price 7p

Shares in issue 100m

Directors / Management team hold a 15% interest

Large shareholders

J.P. Morgan 10%

Investec 13%

Funded for all exploration through 2011, $2m cash

Nomad & Broker: FinnCap

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Diamond Market

Chinese and Indian demand continue to drive the market.There has also been a recovery in US and Europeandemand.

There has been a sustained recovery in diamond prices.They have recovered to their 2008 high (exhibit 1).

Current mines are ageing, there are few new discoveries, soa significant supply shortfall from 2012 will drive prices.

It is believed that there will be fewer than 15 producingkimberlite mines in the world by 2015 (exhibit 2).

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Diamond Market

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Exhibit 1


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Diamond Market

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Exhibit 2

Source: RBC Capital Markets, September 2010 Source: Alrosa, published in RBC Capital Markets, July 2010


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Botswana: The Best Address in Diamonds

One of the best countries to do business in Africa: consistently one of thehighest sovereign credit ratings in Africa

Largest diamond producer by value in the world. The four largest diamondmines are all run by Debswana (exhibit 3):

The Orapa is the 2nd largest diamond mine in the world

The Jwaneng is the richest mine in the world, with a Profit/Revenue ratioin excess of 80%.

Letlhakane is located close to the AK6 mine being developed by Lucara. Damtshaa (4 kimberlites), currently on care and maintenance

The Botswana Diamonds team established African Diamonds, whichdiscovered AK6. This was sold to Lucara in December 2010.

AK6 will commence production Q4 2011 and will produce up to 1m carats a

year of very high quality diamonds, including the very rare Type II.

Firestone are developing the small BK11 mine in the Orapa area.

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Botswana: A World Power in Diamonds

Exhibit 3


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Botswana Diamonds holds four exploration licences in the Orapaarea of Botswana containing over 20 known kimberlites.

The focus of exploration is on kimberlites discovered during earlierexploration, AK8, AK9 and BK5.

These three kimberlites have already been drilled and containdiamonds.

The current exploration programme, commencing in Q1 2011, is to

bulk sample the three kimberlites to test for grade, quality andcommerciality.

Commercial scoping studies have been completed on eachkimberlite and the required parameters of grade and quality areknown.

Prospecting licence PL07/2004 has unexplained indicator minerals.Follow up sampling and geophysics will be undertaken.

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Botswana: Exploration Activities


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The AK8, AK9 and BK5 Kimberlites are on

Botswana Diamonds Concessions

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ORAPA BK5


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AK8 Kimberlite: Advanced Exploration

1,000 2,000 Ton bulk sample

commences Feb 2011 on the Southernlobe. This will be run by Gemcore

Sampling of South Africa

Five Hectare kimberlite pipe located

10km away from AK6, 10km away from

the Orapa Mine with excellent localinfrastructure

Southern lobe (2.5Ha): grade c.3-7 cpht

Northern/eastern lobe: grade c.1-2

cpht

Contains 20 million tonnes of Ore to300 metres

Modelled diamond value of USD35-

190/carat

Conceptual study completed

Production opportunities being

explored including satellite production. 13


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AK8 Kimberlite: Advanced Exploration


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AK9 Kimberlite: Advanced Stage Exploration

1,000 2,000 Ton bulk sample

being taken to evaluate gradeand diamond quality.

A 3 hectare kimberlite pipelocated 10km away from AK6,20km away from the OrapaMine.

Excellent local infrastructure

2.5 3.5cpht

Contains 11 million tonnes ofore to 250 metres

Conceptual mine plandeveloped

Potential satellite producer

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AK9 Kimberlite: Advanced Stage Exploration


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BK5 Kimberlite: Advanced Stage Exploration

Size stated as 2.7 hectares, but the

size is now estimated at 7 hectares. The kimberlite is at surface (5 metre

calcrete overburden).

Old data estimated 7cpht.

Mineral chemistry is good Botswana Diamonds is commencing

a drilling / bulk sample programmeto clarify size, grade and quality

7,000 tonnes of material has already

been mined and awaits processing. Two additional bulk samples of

1,000 to 1,500 tonnes each to beexcavated.

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Unexplained indicator mineralanomaly to the south ofexisting kimberlites suggestsundiscovered kimberlites in thelicence area.

De Beers owned BK15 andBK17 kimberlites locatedimmediately north of PLboundary (retained underMining licence)

Follow-up sampling planned toconfirm presence ofundiscovered pipes followed byground geophysical survey

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PL07/2004: Kimberlite Indicator Anomaly


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Zimbabwes Marange: Revolutionary

Discovery

Most exciting diamond discovery in the world today. This isthought to be a paleo placer covering 250,000 hectares.Diamonds are contained in a thin (up to 1m) layer up to 30mbelow the surface.

Diamonds are of modest quality ($20-40 per carat) but grades ofup to 8,000 cpht have been recorded.

Botswana Diamonds has a joint venture with local partners to

apply for a concession.

In turn, this joint venture has a joint venture with the ZMDC, thestate mining company of Zimbabwe.

Botswana Diamonds will own 25% of any successful licenceapplication and will pay 100% of all costs for a 25% interest.

Advanced discussions are ongoing.

Botswana Diamonds will be the operator.

Trial mining can be implemented within six months of a licenceapproval.

Title is not clear in the Marange area. 19


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Zimbabwe: Kimberlite Potential at Murowa

As Zimbabwe opens up as a diamond

province, other areas are showingpotential. Botswana Diamonds is well

placed with a team on the ground.

Botswana Diamonds is examining a

possible joint venture on 28 claims to

the southeast of the Murowa area of

Zimbabwe.

This is the traditional kimberlite

diamond producing area of Zimbabwe.

The Rio Tinto Murowa diamond mine is

in this area as is the River Ranch

diamond mine. Previous work identified several

kimberlite pipes, some of which are

diamond-bearing.

Work is ongoing to identify drillable

kimberlite targets. 20


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Cameroon: Mobilong Diamondfields

Though very early stage, recent unconfirmed reports suggestthe discovery of a paleo placer diamond field similar to

Marange. The geology is not yet understood.

Chinese and Korean companies have obtained licences inMobilong.

Botswana Diamonds is in discussions with a local group who

hold an 8,000 sq km licence application in the Mobilong areaof Cameroon, close to the border with the Central AfricanRepublic and adjacent to Chinese and Korean ground.

If a joint venture agreement can be reached, BotswanaDiamonds will undertake an initial reconnaissanceprogramme to be followed by a detailed literature review andaerial geophysical surveys, if justified.

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Other Diamond Activities

Botswana Diamonds owns 35.42% of Bugeco SA, a private Belgian

company who owns exploration licences in DRC which has

discovered two new kimberlite clusters.

Bugeco is focused on five licences in which the kimberlites are

located in Kasai Orientale, DRC. A large joint venture partner willbe needed to drill this ground.

Botswana Diamonds holds a small stake (1%) in Stellar Diamonds

(AIM:STEL) which has two alluvial diamond mines in Guinea and a

kimberlite discovery at Droujba in Guinea.

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Directors

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John Teeling (65) - Executive Chairman

30 years resources experience.

20 years African Resource exploration and

development management experience.

Established a number of AIM companies.Doctorate from Harvard.

James Finn (51) Finance Director

20 years experience in exploration

companies.

Currently Director of 4 AIM companies.

Degrees in Accounting and Management.

David Horgan (51) Director

Holds a Law degree from Cambridge and an

MBA from Harvard.

He is Managing Director of AIM listed oil

explorer Petrel Resources plc and Clontarf

Energy plc.

Andre Fourie (44) TechnicalDirector 20 years of diamond and gold

experience, 18 of which with Anglo

American and De Beers.

Experienced in exploration,

mineral resource management and

new business development.

Degrees in Geology andpostgraduate qualifications in

Mining Engineering.

Operations will be managed by Andre Fourie who is based in Kimberley. A manager has been identified

for Botswana.


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Licences located in the best diamond address in the world

Advanced exploration projects which the team know wellwith known kimberlites

Blue sky interest in Zimbabwe & Cameroon

Fully Funded through 2011

Highly experienced management team with a track recordof delivering these kinds of projects and shareholder value

Recovering diamond market, back to the highs of 2008

Demand expected to continue to be driven by China andIndia

Botswana Diamonds assets are more mature than theoriginal African Diamonds assets and contain a lot ofpotential

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Summary


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Contact Details

162 Clontarf Road

Clontarf

Dublin 3Ph: +353 1833 2833

Web: www.botswanadiamondsplc.com

www.botswanadiamonds.co.uk

Email: [email protected]

[email protected]

botswana diamonds - feb 2011

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