The company intends to start a pilot production plant in the Marange area of Zimbabwe, restore production at Thorny River, in South Africa, while exploring for blows on the ground and identifying drill targets at Central Kalahari, in Botswana.
The company also expects to unlock opportunities at the Maibwe project, in Botswana.
During the financial year ended June 30, BOD’s initial focus had been on the Thorny River kimberlite dyke system which hosts former mines Klipspringer and Marsfontein. Both mines were discovered on the dyke system in the area.
Dykes are often narrow, maybe a metre wide or less. A blow is where the dyke balloons out to a size capable of being mined as a conventional openpit operation.
The Marsfontein blow was such a rich source of diamonds that the capital expenditure was recovered in less than four days.
BOD subsidiary Vutomi explored the Thorny River dykes which are 4 km away from the Klipspringer mine and processing plant. Exploration exposed a dyke system over 7 km long.
“We negotiated both a contract mining agreement and a contract processing agreement. Vutomi would receive a 12% royalty. The Klipspringer processing plant struggled to process fresh kimberlite in a satisfactory manner and was losing diamonds to the waste dumps so we suspended operations.
“Meanwhile work was ongoing on a licence over the nearby Marsfontein gravels. A mining permit was obtained in September. Once again, contract mining and processing is being employed, this time on a 15% royalty,” explained BOD.
The company reported that two plants were processing the gravels and initial results were positive. BOD was increasing throughput to 400 t of gravel a day.
Simultaneously, there was ongoing exploration on the Thorny River dyke system to identify blows.
“While the focus of activities is in South Africa, we have continued to develop our interests in Botswana. We hold eight prospecting licences in Botswana, with applications lodged for a further six. We also hold a 15% net interest in the Maibwe joint venture (JV) in the southern Kalahari. Our interest is held through a 51%-owned South African company, Siseko Minerals.
“Other partners in Maibwe are BCL with 51% ownership and Future Minerals with 20% ownership. BCL is a large State-owned copper/nickel company, which is in liquidation. Future Minerals is a locally-owned Botswana company,” noted BOD.
The operator, BCL, was placed into liquidation prior to it completing the agreed exploration programme. BOD had made an offer to the liquidator to buy BCL’s interest in the project.
“However, the Botswana government wants more work done on the licences before making a decision,” the company said.
Further, BOD continued work on its Central Kalahari Game Reserve (CKGR) licences.
Extensive geophysical and geochemical analysis was conducted in 2017 and 2018, which led to the identification of priority targets. Subsequently, third-party companies had shown an interest in participating in the exploration of these targets.
BOD reported that an agreement had been reached with one large diamond producer, but that this had not come to fruition and the company was considering alternatives.
Meanwhile, the Marange area of Zimbabwe had, in recent years, produced large quantities of diamonds. BOD entered into a joint venture (JV) with Aim-listed Vast Resources over a concession in the Marange area.
BOD owns 13.3% of the JV and will provide technical and geological input to Vast.
Vast agreed to provide the first $1-million to the project in the form of a loan.
“We understand that Vast is hopeful that a final agreement with the Zimbabwe authorities is imminent,” said BOD.
The political situation in each of the three countries where BOD operates has improved, the company stated.
Fresh democratic elections in Botswana had led to continuity and stability.
There was also a slow improvement in the investment attractiveness of South Africa, while Zimbabwe showed glimmers of hope.
BOD said delays at its projects in Botswana had resulted in a redirection of focus onto the properties held in South Africa by Vutomi.
Notwithstanding, the general business environment remained uncertain globally.
International trade had faced restrictions, and the European Union was facing the first exit of a member State. Chinese growth rates, which had underpinned global economic growth, were weak, while in the US, the economic expansion was now starting to look fragile.
BOD stated that zero or negative interest rates were becoming more prevalent. This economic oddity was causing severe stress in banking and among economic and political policymakers.
Further, prices for gem diamonds in the last year had been weak, owing more to economic uncertainty than an increase in supply.
Laboratory-grown diamonds (LGD) had received a great deal of publicity and, though they made up a tiny percentage of sales, the impact on sentiment had been negative.
The technology behind LGD was improving and bigger diamonds were being manufactured.
Rough diamond prices had generally fallen, as had the share prices of diamond producers and explorers. “Yet, the long-term fundamentals of the industry were solid.”
Asian economies were showing the fastest increase in diamond consumption. There was a long way to go before the latent demand in these markets was satisfied.
There were not enough gemstone quality diamonds to provide a diamond ring for half of the population of China and India.
Remarkably, the US had continued to be an engine of growth for jewellery. Almost 50% of all diamond jewellery was bought in the US.