Name and Location
Lerala diamond mine restart and plant recommissioning project, Botswana.

Client
Kimberley Diamonds Limited (KDL).

Project Description
Lerala comprises a cluster of five diamond-bearing kimberlite volcanic pipes – K2 to K6 – and a processing plant with a nominal capacity of 200 t/h. The project area is covered by a 15-year fully permitted mining lease covering 21.86 km².

The mine and processing plant were placed on care and maintenance in July 2012.

The mine has a current resource of about 10.3-million tonnes at an average grade of 31.5 ct per hundred tonnes, equating to an estimated 3.3-million carats.

The project involves modifications to the Lerala processing plant to enable it to operate more effectively and reliably treat 200 t/h.

Once in production, Lerala has a current forecast life-of-mine of seven years, treating 1.4-million tonnes of ore a year and producing an average of 357 000 ct/y.

Net Present Value/Internal Rate of Return
Not stated.

Value
KDL approved A$14.6-million for upfront capital items required to bring the plant and mine to a state of readiness in the quarter ended September 2015.

Duration
Not stated.

Latest Developments
In July, Kimberley awarded a lump sum turnkey contract for plant modification work at Lerala, which included the refurbishment of existing camp facilities.

Consulmet will be paid about A$9.83-million to undertake the plant modifications, which are scheduled for completion by February.

Refurbishing the camp at Lerala, installing new communications systems, and dismantling and removing obsolete equipment have been completed, with civils site preparation well under way at the end of the September quarter.

Further, all orders for long-lead equipment being fabricated in South Africa have been placed and fabrication is progressing well, with no scheduling issues identified to date.

Significant activity is expected in the quarter to December 31, 2015, with the bulk of the new equipment to arrive on site, and installation expected to be nearing completion during this time.

Meanwhile, KDL reported in October 2015 that its geological team at the Lerala project had found evidence of buried alluvial channels adjacent to the diamond-bearing kimberlite pipes that host the Lerala diamond resource. If the alluvial channels are confirmed to exist and found to contain significant quantities of diamonds, the life and overall value of the project might increase.

This development has caused Kimberley to delay the scheduled development of the new tailings dam, which is situated on two of the higher priority target areas for the potential alluvial deposits, while a thorough investigation is undertaken.

This delay will impact on the timeline for recommissioning and restart of mining at Lerala, although the extent of such impact cannot be determined until the investigation has been completed and a decision is made on how to proceed. With the information currently available, management estimates that the delay is unlikely to exceed three months.

Key Contracts and Suppliers
Consulmet (plant modifications).

On Budget and on Time?
Not stated.

Contact Details for Project Information
KDL, tel + 61 2 8243 7500.