Aug 25 2015
Tango Mining Limited is pleased to report that it has completed an updated National Instrument 43-101 resource for the BK11 Kimberlite Diamond Mine, Botswana.
The BK11 Mine is part of the Orapa/Letlhakane kimberlite district, one of the world's most prolific diamond producing districts and is a diamond-bearing champagne-glass shaped kimberlite pipe with a surface area of 8.7 hectares (revision based on new geophysical modeling). There are excellent paved roads, water supply and power supply from the recently upgraded national grid to the property boundary. Botswana is deemed to be an attractive foreign investment jurisdiction based on its status as a renowned world diamond producer, stable political jurisdiction and developed economic sector.
NI 43-101 Resource
- 17.4 million tonnes (Mt) Inferred Resource containing a total of 780,820 carats ("cts") of which approximately 9.0 Mt (Kimberlite Facies K2U, K2L and K3) averages 6.8 carats per hundred tonnes ("cpht") for a total of 608 000 cts, with higher-grade areas being identified at 9.8 cpht.
- BK11 contains good quality white diamonds in the top 10% of global gem diamond production in terms of value per ct. The recovery of a 1.5 ct high quality Type IIa D colour diamond is significant as it indicates the presence of top quality stones within the BK11 kimberlite, with the potential for large +100 ct stones.
- Based on the 2015 market, diamond valuation experts advise a minimum average price of USD $236/ct, a modelled price of USD $260/ct and an upside price of USD $285/ct.
- Geophysics and geological remodelling have identified a possible low-grade basalt raft near the centre of the resource was estimated to be 0.6 Mt in size. Historically, this would have diluted feed grade to the plant considering that approximately 1 Mt of the deposit was treated up to February 2012 out of a total of 2.7 Mt mined. This raft is now almost completely mined away with the pit exposed and developed down to 60 metres ("m").
The resource is based on the evaluation of: 6,392 m of core drilling and 1,473 m of large diameter drilling. Sampling and mining produced approximately 19,000 cts that was valued up until February 2012 and analyzed in terms of size frequency distribution.
The NI 43-101 Qualified Persons consider the 2015 BK11 resource to be conservative for the following reasons:
- The majority of kimberlite mined to date was highly diluted and low grade. There is grade control bulk sample evidence for higher-grade kimberlite in the lower levels of the BK11 Mine open pit (e.g. average of 8.5 cpht).
- With more accurate and controlled bulk sampling of the BK11 facies types, in order to collect a representative number of stones and cts per facies type, the current resource category could be upgraded into a higher confidence resource category such as Indicated.
Ongoing Work
Tango has run feasibility studies in parallel with the resource work and is preparing a NI 43-101 Preliminary Economic Assessment report. As part of this work, recently completed rock hardness measurements have enabled autogenous mill sizing to be conducted. The deposit is considered as soft in the greater diamond industry and an autogenous mill retrofit to the existing plant is being assessed. Economic models will potentially be enhanced due to the following:
- Better liberation and recovery with the implementation of autogenous milling.
- Potential for less diamond damage and possible breakage.
- Autogenous milling can provide improved plant throughput and reduce unit treatment costs.
- Botswana Power Corporation grid power has been installed to the site boundary and will be more cost effective than the historical and more expensive diesel generators.
- 2012 capitalised pit expenditure of USD $21M with pit developed down to 60 m with mineralization exposed and ready for recommencement of mining.
- 2012 installed two stream plant and infrastructure of USD $23M allowing for a shorter project implementation time.
- USD $45M acquired accumulated tax losses to be utilized against future taxable earnings.
Terry L. Tucker, P.Geo., Executive Chairman of Tango, stated "The completion of the resource update for BK11 is an important step in finalizing the economic study of BK11. The resource tonnage and grade is consistent with our initial assessment of this acquisition opportunity and the improved diamond valuation could enhance the economics of this project. The recently announced positive production results and recovery of exceptional stones from nearby neighboring mining operations, that implemented similar autogenous milling technology bodes well for the future performance of BK11, and provides confidence in our development and investment decision. Our immediate goal is to focus on financing the acquisition and development cost and transition into project development and production."