Lord Neil Benjamin
Lord Neil B Gibson on the South Africa Diamond Mine – Lesotho Project
Namakwa Expects Mine Life of Over 40 Years from Kao Kimberlite Mining Lease in Lesotho Namakwa Diamonds Limited says that the Government of the Kingdom of Lesotho has transferred the mining lease to the Kao Kimberlite Pipe to Namakwa Batla Diamonds Pty Ltd (NBDL), the company’s joint venture with Batla Minerals SA, the Government and Lesotho investors. The Government has also entered into a mining agreement with NBDL. African Alliance Lesotho (Pty) Limited provided corporate finance advice to NBDL. 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:
  1. A recognized kimberlite asset in Lesotho - an established centre for kimberlite mining with proven infrastructure and logistical capabilities; and
  2. 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.
Namakwa 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.”   About Namakwa Diamonds: Namakwa Diamonds is a vertically integrated diamond resource group focused on diamond mining and beneficiation across Southern Africa. The Company has a diversified portfolio of diamond projects, which include distinct diamond resource target areas now located in five African countries, namely: South Africa; Lesotho; the Democratic Republic of Congo; Namibia and Angola. The Company’s projects are located within historically prospective geological environments. Alluvial diamond deposits, including marine, have to date constituted the primary focus of the Company, whilst kimberlite opportunities are considered if they are at an advanced stage of development, consistent with Namakwa Diamonds’ philosophy of a short resource delivery time. The Company adds value to its mining operations with a well-established beneficiation division, developed over a 30-year period, with operations in South Africa, the Democratic Republic of Congo and Israel, allowing Namakwa Diamonds to capitalise on margins across the diamond value chain. About Batla Minerals SA: Batla Minerals is an established diamond mining company listed on the NYSE Euronext (Marche Libre) in France. Alluvial Ventures, Batla Minerals’ wholly owned subsidiary, conducts contract diamond mining in Lesotho. The business has current operations in Lesotho and South Africa. New ventures are being sought across Southern Africa and more specifically in Namibia, Botswana and Mozambique. These new ventures are not limited to diamond extraction and include mineral deposits in the energy, precious and base metals categories. About Namakwa Batla Diamonds (Pty) Ltd: Namakwa Batla Diamonds is a Lesotho based company and a joint venture between Namakwa Diamonds and Batla Minerals (62.5%), certain Lesotho investors (12.5%) and the Government of the Kingdom of Lesotho (25%). Namakwa Diamonds maintains board and shareholder control. About Lesotho and the Lesotho investors: Lesotho is a constitutional monarchy, which is entirely surrounded by the Republic of South Africa. Lesotho’s natural resources include sand, clay and building stone but - apart from water - by far its chief resource is diamonds. There are 33 kimberlite pipes and 140 kimberlite dykes within Lesotho and the area has a well developed infrastructure designed to aid diamond mining, Lesotho meets most of its power requirements from its hydroelectric developments, but supplements this by importing power from South Africa when required. The Company has contracted with certain Lesotho investors to help provide a sustained future for the community around the Kao project. About African Alliance: Our advisor, AA Group is a 16 year old pan African investment bank with 30 offices and an operating presence in 19 African countries, with a focus on advisory, asset management, stock broking and private equity. Clients of AA include international investors, national governments, municipalities, parastatals, pension funds and large to medium private companies.