Botswana Diamonds upbeat on granting of permit at Marsfontein

Diamond explorer Botswana Diamonds reported on Monday that a mining permit covering the diamond bearing gravels and residual unprocessed stockpiles surrounding the Marsfontein Mine has been granted to its associate Vutomi Mining.

The AIM-traded firm had previously announced that Vutomi, in which Botswana Diamonds has an interest of 40%, has partnered with Eurafrican Diamond Corporation (EDC) to mine and process the identified deposits on both Marsfontein and Thorny River.

It said EDC had started with site establishment, and commissioning was expected to begin within the next two weeks, with production ramping-up once commissioning was complete.

Cash flows from Marsfontein would be used to fund ongoing exploration work in Botswana and South Africa.

“I am delighted that the Marsfontein Mining Permit has been granted and that site establishment has already commenced,” said chairman John Teeling.

“I look forward to updating shareholders as the company progresses towards being a diamond producer.”

The board said the Marsfontein mine, which comprised a kimberlite blow, was operated for two years in the late 1990's with a pay-back of its entire development cost in less than four days.

Marsfontein's run of mine grade was 172cpht, at a bottom cut off of 1.2mm, and its assortment was known to contain fancy coloured diamonds.

Evaluation work on the gravels and residual stockpiles adjacent to and surrounding the mine, conducted at the time of mining, indicated them to be diamondiferous with favourable economics.

Botswana Diamonds said those deposits were overlooked when the mine was closed.

As tat 1000 GMT, shares in Botswana Diamonds were up 10% at 1.21p.