Okwa Diamonds go gaga for Ghagoo
Despite lying dormant for more than four years, Ghaghoo Diamond Mine looks set to regain its sparkle after sparking interest from a new multi-million Pula suitor.
The mine, located in the Central District some 300km northwest of Gaborone, was initially acquired by Gem Diamonds from De Beers back in May 2007.
However, although roughly $85 million (P850 million) was spent on developing the mine, weak market conditions saw it placed under care and maintenance in February 2017. It has remained inactive ever since.
Gem Diamonds, which also boasts operations in Lesotho, has now agreed to sell its Botswana subsidiary to Okwa Diamonds – a joint venture between Vast Resources and Botswana Diamonds, which holds a 10 percent share in the company.
Okwa will acquire the mine for $4 million (P40 million), a relative snippet considering the fortune Gem Diamonds splashed out on the operation.
The acquisition, which is subject to regulatory approvals by local authorities, is expected to be completed in the latter stages of the year.
Ghaghoo Mine, which is a 10.8 hector (Ha) kimberlite pipe, has an assortment of diamonds which include high-value fancy-colored blue and orange stones.
BOD has been appointed as the operator to return the mine into a commercially successful diamond-producing asset.
Updating shareholder this week, BOD Managing Director (MD), James Campbell said they believe there are significant opportunities to improve Ghaghoo’s operating and financial performance.
“Gem Diamonds’ advanced underground mine development and the surface infrastructure already in place, means a return to production is potentially possible with an overall objective to target a return to nameplate capacity of 1.25 million tonnes yearly,” declared a confident Campbell, pointing to a recent resurgence in the diamond market as cause for his optimism.
For his part, BOD Chairperson, John Teeling explained the joint venture enables them to acquire an interest in an advanced mining project at the minimal initial cost.
“Ghaghoo is one of the largest available diamond resources and is contiguous with our KX36 project which should potentially create synergies between operations. Ghaghoo and KX36 are both located in the Central Kalahari, which is our core area of focus in Botswana,” said Teeling.
Ghaghoo Mine was discovered in 1982 by Falconbridge Mining (later Xstrata) and evaluated in a joint venture with De Beers up to 2007.
Gem Diamonds then bought the mine and continued to evaluate the project, with the organisation’s subsidiary, Gem Diamonds Botswana granted a Mining Licence in 2010.
A study was then undertaken to determine the most viable way in which to exploit the deposit.
Following an underground development, commercial production started in 2015 but the mine closed just two years later. In that time, Gem recovered less than 150,000 carats.
The mine is currently flooded after the 2017 earthquake which, as well as sending shockwaves across the country, ruptured Ghagoo’s underground water seal. It seems Okwa could prove the life-jacket the mine so desperately needs!