DEBSWANA RESUSCITATES DAMTSHAA

DEBSWANA RESUSCITATES DAMTSHAA

Debswana is currently working on a plan to resuscitate Damtshaa mine which has been shut down for more than a year, Gareth Mostyn, the Executive Head, Strategist and Corporate Affairs at De Beers says.

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• Open pit reaches life end at Letlhakane
• Letlhakane production will be focused on repossessing
• Orapa mine currently focused on cut-2
• First Ore from cut-8 extracted in June

Debswana is currently working on a plan to resuscitate Damtshaa mine which has been shut down for more than a year, Gareth Mostyn, the Executive Head, Strategist and Corporate Affairs at De Beers says.

When responding to media questions on Thursday, Mostyn said the mine will possibly re-open in 2018.

He also said the open pit in Letlhakane has reached its lifespan and therefore production would be sourced from reprocessing stockpiled diamonds. Meanwhile Letlhakane will continue to produce.

Letlhakane is expected to produce 800 000 carats per annum. In the first and second quarter of 2017 the mine produced 232 million carats and 102 million carats respectively. The mine size is however negligible compared to other mines operated by Debswana. Debswana’s production hinges largely on the Orapa and Jwaneng mine which produced 5 million carats in the first half of 2017.

De Beers makes most of its money through Debswana. Almost 70 percent of the Diamond Company’s production is sourced from Botswana. Rough diamond production increased by 21 percent to 16.1 percent( H1 2016: 13.3 million carats), in line with the higher production forecast for 2017, reflecting stable trading conditions as well as the contribution from the ramping-up of Canadian production.

Debswana increased production by 6 percent to 11.1 million carats in the first half of 2017 compared to 10.5 million 2016 the same corresponding year. Production at Orapa increased by 22 percent driven by the ramp-up of Plant 1, which has been on partial Care and Maintenance in response to trading conditions in late 2015, together with higher grades, Mostyn says.

“This was marginally offset by Jwaneng, where production decreased by 6 percent owing to lower grades. First ore from Jwaneng Cut-8 was extracted and processed in June 2017. Cut-8 will become Jwaneng’s main source of ore from 2018.”

The first ore from Cut 8 in Jwaneng was extracted and processed in June. Feasibility studies for Cut-9 are currently under way, according to Mostyn. Meanwhile mining operations in Orapa are focused on Cut-2. Pre-feasibly studies are said to be underway to look at a potential Cut-3 push back.

At Nambdeb Holdings, production increased by 17 percent to 0.9 million (H1 2016: 0.7 million carats). De Beers says this was mainly due to production recovering following Debmarine Namibia’s Mafuta vessel having been on extended planned in-port maintenance in Q2 2016. Debmarine Namibia’s new exploration and sampling vessel, the SS Nujoma was officially inaugurated in June 2017 and is now fully operational.
In South Africa, production increased by 43 percent to 2.5 million carats (H1 2016: 0.7, million carats) as a consequence of higher grades at Venetia.

The group of companies says construction of the Venetia underground mine continues to progress with the underground operation expected to become the mine’s principal source of ore from 2023. “In June 2017, the annual section 74 export levy exemption for DBCM was renewed until March 2018.”

In Canada, production increased to 1.6 million carats (H1 2016: 0.3 million carats) due to ramping up of Gahcho Kue, which commenced commercial production on 2 March 2017. Production at Victor increased by 21 percent to 0.4 million carats as a result of higher grades. At snap lake, flooding of the mine which commenced on January 2017, is now complete, thereby minimizing holding costs while preserving the long-term visibility of the orebody.

Mostyn says sentiments in the midstream remains positive following a reasonable Q4 2016 retail season, with evidence of Chines retailers restocking “This has supported good demand for De Beers rough diamonds. Spot polished prices remained broadly flat in H1 2017.’