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Thank you. I see James is looking over drill chippings, bring on the photos.
Hi Thornyriver!
That's how I'm reading this - it's all about the size of any newly discovered kimberlite. Assumptions are dangerous things, but I'm assuming grade and diamond value will be just fine - all available evidence points that way.
Marsfontein was 0.4 hectares and highly profitable. Currently, Botswana Diamonds have discovered a 0.25 hectare pipe (aka the River Pipe), which I take to be big enough to mine profitably but not to be directly compared to Marsfontein. The current drilling is chasing after a second pipe / an extension to the existing pipe. The first sign that they have hit a substantial intersection of kimberlite I'll be doubling up here.
As for downside protection in the event of a "duster", the market cap is still low, BOD still have the already discovered River Pipe, and they still have the Botswana assets, so that's a decent "insurance policy".
If you want to get an idea what a small kimberlite in that area can be worth see the following pdf of Marsfontein:
https://www.thediamondloupe.com/sites/awdcnewswall/files/attachments/marsfonteincasehistppt2005-190228162000.pdf
The financials are from page 25 and are impressive to say the least!
I do not believe we are looking at a large kimberlite of over 1 HA to make it economical to mine. Marsfontein was only 0.4 HA very moderate in size. I also think the in ground value posted in JC answer references the finding of the small diamonds in the drill sample. Which were a surprise to find in such a small sample. True value of in ground diamonds can only be extrapolated when a larger sample is studied.
However, I feel we could be sitting on a significant find and only time will tell how large it is.
So it's all about size of target. They know diamonds are there but we need a large target to make it really feasible, is this the conclusion here on this board?
Hi Pecten!
Thanks for posting - much appreciated!
I was wondering if the agreement with Palaeo Minerals was still in force. Now we know the answer - no. And as the agreement with EDC only covers the Marsfontein licence, that means Thorny River is presumably "free". This I view as a good thing.
All other answers more or less as I expected, but still good to know!
Thanks Pecten11,
A good read
Post 2
Q - Finally, and I appreciate the most amorphous question, could I ask what would success at Thorny River look like to you?
A - Good question on Thorny River. Success would like a kimberlite body sufficiently large enough to mine. The grade and diamond value are good, it’s all about size. The drilling at the end of last year and the current drilling programme are both aimed at defining the size of the kimberlite.
Q - Fantastic confirmation re the grade and value of what has so far been found at Thorny River - a cheeky follow up from a (seriously) non-expert - what size would the stones have to be averaging for interest to be maintained? 0.5 carat?
A - On the size, we already have $60-140/ton in the ground (see slide 9) so it is all about how large the kimberlite is. Marsfontein was only 0.4 Ha but had a payback of 3.5 days so we are not looking for something very large.
Post 1
Hi all, some of you may have already known these answers, but some clarification at least. JC happy for me to share
Q - Would you please be able to advise me on where Botswana Diamonds stands re the Vutomi Optiona and Earn- In Agreement as the website states that the company currently owns 15% of Vutomi, though I thought the commitments to Phase 2 had been satisfied.
A - You are correct on the commitments to Vutomi being met and as per the RNS, BOD owns 40% of Vutomi
Q- Would it also be correct to say that in relation to the contract with Palaeo Minerals Pty, that the highest possible upside attributable to Botswana Diamonds of the current drilling programme at Thorny River and any associated discovery (if made) of a commercial diamond project would be 70% (of Vutomi) of 20% remaining from the deal with Palaeo?
A - On the mining agreement, Palaeo are no longer involved but upside is in the larger, better quality stones also as per the RNS.
Q - So would it be accurate to say that all the current (and previous since Sept 2019) drilling costs at Thorny River are being met by EDC?
A - The Marsfontein mining permit project is where we have a royalty agreement with EDC and they cover all the costs. On Thorny River, which is an adjacent exploration project, BOD owns 40% and thus contributes 40% to the drilling and other exploration costs.
Q - I understand that RC drilling is both quicker and cheaper than diamond core drilling - would core be considered in the future to potentially narrow down drill results to help compile a resource statement or will the previous 1m sample spreads from the RC provide adequate information?
A - We would in all likelihood follow this RC programme with core drilling to firm-up on the geology
Q - Also is there an indicative timescale with regards to when Diamextrat/Burgundy Diamond Mines may commence exploration activities within the Botswana licenses. I appreciate that the pandemic may sadly be making such decisions challenging to commit to?
A - On the Burgundy/DESB deal, they have 6-months from the date of signing the deal to present a plan. We are already discussing this so there will be no surprises once it is presented. We hope to start field work very soon after agreeing a plan
Q - When do you expect the significant shareholder list to be updated, as it is now 6 months old and there has been a share placing since it was last published?
A - I will ensure the website is suitably updated on both the Vutomi agreement and significant shareholder list