Name and Location
Ghaghoo underground diamond mine, Botswana.

Client
Gem Diamonds, through its wholly owned company, Gem Diamonds Botswana.

On July 25, 2011, Gem Diamonds announced the name change for its wholly owned Gope Exploration Company to Gem Diamonds Botswana. Gope Exploration Company holds the mining licence for the Gope deposit, which has been renamed Ghaghoo diamond mine.

Project Description
Originally scoped as a six-million-ton opencast mine, Ghaghoo will be built as an underground mine in a phased manner to take advantage of the Ghaghoo diamond deposit, which comprises a 2.1-million-carat mineable reserve with an average grade of 27.81 carats per hundred tonnes at an average diamond price of $246/ct.

The proposed mine site, which is located about 200 km north of Gaborone, falls in the Central Kalahari Game Reserve.

A decline has been determined as the most cost-effective access method, as excavating through the Kalahari sand would present a number of challenges. The mine has an estimated mine life of more than 30 years.

Phase 1 of the project will confirm the grade, diamond prices and the recovery processes, including the use of autogenous milling, which is expected to increase diamond liberation. Results from Phase 1 will underpin a study aimed at defining the way forward for mining at Ghaghoo.

Value
$96-million.

Duration
Production at the mine was initially expected to start during the third quarter of 2013; however, two fatalities at the mine and adverse ground conditions are expected to delay the start of first production at Ghaghoo until the first half of 2014.

Latest Developments
The decline tunnel continues to progress well through the competent basalt with 306 m of basalt tunnelling having been completed as at the end of October – a total of 765 m of underground development has been acheived.

Construction of the plant is complete, with commissioning scheduled for completion early in the second quarter of 2014; well ahead of a sustainable feed of run-of-mine ore becoming available from underground.

Key Contracts and Suppliers
Redpath South Africa (incline sand tunnel contract).

On Budget and on Time?
The start of first production at the mine is expected to be delayed until the first half of 2014.

Contact Details for Project Information
Gem Diamonds Botswana, tel +267 3182 796 or fax +267 3182 795.
Redpath South Africa mine manager Olaf Iverson, tel +27 11 570 4300 or email olafi@redpathmining.co.za.