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LONDON (Alliance News) - Gemfields PLC Wednesday said the Kagem mine in Zambia is set to produce 1.10 billion carats over a 25 year mine life after it secured its first measured and indicated resource estimate for the project.
"Today's updated resource statement highlights the long term opportunity that exists at our Kagem emerald mine in Zambia," said Chief Executive Ian Harebottle.
The gemstone mining and marketing company released the figures following the publication of the independent competent persons report conducted by SRK Consulting (UK) Ltd.
According to that report, Gemfields will need to spend USD84.0 million over the first four years of the project, and a total of USD516.0 million over the 25-year mine life.
That will create a project that will initially process around 90,000 tonnes of ore per year before rising to 180,000 tonnes per year in 2018 when it adds the Fibolele pit to the project. Over the life of the mine, it will produce on average 44.7 million carats per year.
The Kagem mine will generate cashflow of USD1.59 billion over its 25 year life and the project has current net present value of USD520.0 million.
In terms of reserves and resources, the Kagem mine has a total JORC compliant resource of 1.80 billion carats at a grade of 281 carats per tonne, of which 1.10 billion carats are proven and probable at an average grade of 291 carats per tonne.
It is the first recorded measured and indicated resource estimate for the Kagem mine.
The company plans to continue to explore the Kagem mine "over the next few years" to determine the further resource potential.
"This, together with various other expansion opportunities that are already at hand, the impact that our continued global marketing and promotional initiatives are expected to generate, provide me with high level of confidence in Gemfields' ability to deliver against the considerable targets we have set ourselves," said Harebottle.
"As I have said on many occasions over the past few years, this operation has a bright future, is still maturing as an established producer, with much more yet to come. I would also like to thank the Zambian government, our partners in Kagem, for their continued commitment and support to this exciting project," he added.
Gemfields shares were up 3.3% to 61.97 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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