JOHANNESBURG (miningweekly.com) – JSE-listed diamond company Trans Hex reported that the newly acquired Namaqualand Mines operation would deliver an average diamond output of 218 000 ct/y for the first seven years of its 13-year life-of-mine (LoM).
Yearly diamond production was expected to peak at 316 000 ct, before reducing to just over 50 000 ct for the remainder of the life of the project when tailing mineral resources would be treated.
Trans Hex, which was finalising the agreement amendments for consortium Emerald Panther Investment’s (EPI’s) R166-million buyout from De Beers Consolidated Mines, planned to mine 1.8-million carats at an average grade of 9.27 carats per hundred tons (cpht) over the LoM.
EPI, which secured R189-million in start-up capital from the Industrial Development Corporation and R130 million from EPI shareholders, would include a special purpose vehicle in EPI’s shareholding structure as a 20% stakeholder.
A R166-million rehabilitation insurance instrument, approved by the Department of Mineral Resources, was also obtained.
The deal, which was expected to close in March, would net the Trans Hex consortium, which included RECM and Calibre Limited, Dinoka Investment Holdings and the Namaqualand Diamond Fund Trust, an asset with a total mineral resource of 6.62-million carats, averaging a grade of 5.60 cpht.
The mine would generate R3.9-billion in revenue, with the average diamond expected to fetch $221/ct, against an operating cost of R1.5-billion and total capital expenditure of R353-million over the life of the mine.
A 43% internal rate of return was expected.
Trans Hex would manage Namaqualand as the exclusive operator and market the diamonds for a total fee of 5.5% of revenue, which equated to R213-million over the life of the project. This fee increased Trans Hex’s effective interest in the mine to 52%.
Trans Hex expected Namaqualand to deliver an average cash flow of R73-million a year, or 69c a share, from 2016 until 2021. From 2022, tailing mineral resources would be treated at an average cash flow of R20-million a year.