Diamond explorer Botswana Diamonds continues to advance second-phase exploration on three of its joint venture (JV) blocks in the Orapa area of Botswana, telling shareholders late last month that the diamond industry continued to “glisten” in a resource sector depressed by weak demand.

Chairperson John Teeling notes in a statement that exploration is focused on potential drill sites identified in the 2014 exploration campaign that have the potential to plug a “clear” diamond supply-demand gap currently emerging in the global market.

“Demand for gemstones in Asia, the Middle East and parts of Africa is growing owing to an emerging middle class. The forecast demand-supply gap begins in 2017 and, by 2023, could be as much as 100-million carats a year or as low as 34-million carats a year.

“The strong demand for diamond jewellery is not being met by discoveries, as there have been no major discoveries since 2005. “The result of these factors is likely to be stronger prices in the future,” he outlines in an interim results statement for the six months ended December 31.

Teeling adds that an initial analysis of the group’s JV project with major diamond producer Alrosa in the Orapa diamond field has identified several prospective targets.

An exploration programme, which began in September 2014 and will run through this year, has yielded “several thousand” kimberlite indicator mineral concentrate samples that have been sent for analysis.

“We expect results to follow in June. The joint programme is fully funded to the third quarter,” he says.

He adds that, in the past year, the JV started to look at potential targets outside the Orapa area, while continuing to identify new ground of geological potential within the original area. The JV has applied for and has been awarded additional ground in the area.

“Ground has been applied for in other areas which, for competitive reasons, we will not identify. We are also in negotiations for future farm-in arrangements with various holders on ground identified by the JV, which is held by others,” he says.

Botswana Diamonds meanwhile has retained an option to acquire an interest of up to 95% in the 13-licence Brightstone block, in the Gope region of the Kalahari.

Teeling says that a large base metals producer that recently entered the diamond sector has become the operator of the block and has already established an on-the-ground exploration team .

Botswana Diamonds has contributed much of its Gope area data bank to the new company in return for a 15% free carry through all phases of exploration up to the completion of a bankable feasibility study.

“This is a good deal for all parties concerned, as it brings fresh eyes and ideas to the block. Outside of the JV, the Botswana Diamonds team has continued to work on our own data and has proposals on some of our existing ground and interesting ideas on new areas,” he notes.

Botswana Diamonds posted an interim loss of £149 000 0.08 a share.