TIDMPDF
RNS Number : 8335V
Pangea DiamondFields PLC
17 July 2009
17 July 2009AIM: PDF
Pangea DiamondFields plc
("PDF" or "the Company")
Operational Update
Pangea DiamondFields plc (AIM: PDF), the mid-tier diamond producer and
exploration company provides the following update of its activities to 30 June
2009. The Company has a portfolio of seven * projects located in the Central
African Republic ("CAR"), Democratic Republic of the Congo ("DRC"), Angola and
South Africa.
HIGHLIGHTS
General
* Strategy to develop near-production assets and conserve cash reserves continues
* Cash reserves of US$3.1 million and diamond stock of approximately US$0.5
million as at 30 June 2009
Angola
* Commissioning of Cassanguidi expansion project nears completion
South Africa
* Bakerville Pilot mining continues to produce good results
* Bakerville project Mining Right application well advanced
* Local farm purchased to secure surface rights to Bakerville project
Central African Republic
* Etoile project rights not renewed *
Resource Update
* Updated resources completed for Harts River and Longatshimo River
General
The Company continues to monitor recent trends in the movement of rough diamond
prices following the substantial reductions late in 2008. While recent trends
reflecting upward movement in rough prices to 65 - 70% of mid-2008 prices
relative to the low of around 50% late in 2008 are promising, the Company is
still waiting for signs of sustainability in these trends before changing its
strategy of focusing on the development of near-production assets and the
conservation of cash.
Following the expansion of the Cassanguidi project to a full capacity commercial
scale operation, which is expected to be completed during Q3 2009, and provided
there is no material worsening in the rough diamond market, the Company expects
to generate sufficient cash flow at current diamond prices to satisfy the
operating costs of its other projects and central overhead costs.
As at 30 June 2009, shortly after the final payment for the purchase of the
Bakerville farm was made, the Company had cash reserves of US$3.1 million and
diamond stock of approximately 3,382 carats valued at approximately US$0.5
million, based on current estimated prices.
Angola
Cassanguidi
Prior to the expansion to commercial scale operations currently in progress, the
Cassanguidi processing facilities consisted of a single primary concentration
facility (Plant 1) located in the south of the project area, from which the
concentrate was fed to a recovery unit utilizing vibrating grease tables to
facilitate the final recovery of diamonds. The grease process required a
significant amount of manual intervention to clean the diamond laden grease from
the tables and as such represented a security risk.
The expansion project nearing completion not only provides for increased primary
processing capacity but also introduces improvements in recovery technology with
the installation of a more efficient and secure, "hands-free" recovery system
utilizing X-ray machines following pre-concentration using a Dense Medium
Separation plant (DMS). The DMS plant receives concentrate from the existing
Plant 1 as well as the new satellite primary processing concentration facilities
(Plants 2 and 3) being commissioned at present.
In summary, the expansion project at Cassanguidi involves three separate and
incremental phases, as follows:
* Phase 1 - Construction and commissioning of a mobile primary concentration
facility (Plant 3)
* Phase 2 - Construction and commissioning of the Centralised Recovery facility
comprising DMS re-concentration plant and X-ray recovery facility
* Phase 3 - Construction and commissioning of an additional primary concentration
facility in the north of the project area (Plant 2)
As at 30 June 2009, Phases 1 and 2 were completed and fully commissioned. The
new Centralised Recovery facility is now being used to process concentrates
from both Plant 1 and Plant 3 as well as re-processing concentrate which had
been stockpiled from the former grease recovery plant, with excellent results.
Phase 3, the new primary concentration facility in the north of the project area
was approximately 90% complete at the end of June and is expected to be fully
commissioned by the end of July.
With the new processing facilities all but complete the focus is now on ramping
up the mining activities to fully utilise this expanded processing capacity. In
working the existing earthmoving fleet harder to achieve these objectives, some
breakdowns have been encountered, slowing the ramp up to full
capacity. Additional resources and external expertise have been applied in fleet
maintenance to improve performance of the existing fleet and additional
earthmoving equipment is being sourced to supplement the fleet and increase
overall mining capacity. While this will have some impact on the ramp up of
production, it is expected that the project will still reach full capacity
during Q3 2009. Until processing capacity can be fully utilised, the surplus
final recovery capacity is being utilised to continue re-processing tailings
from the former grease recovery plant.
The final capacity of the new processing facilities is expected to be around
35,000 m3 of in situ gravel per month and producing around 7,500 carats per
month, with cash costs expected to be of the order of US$18 per m3 of in situ
gravel mined and processed. Recent data from third party sales in the first half
of 2009 suggests that in the current market, a price of US$120 per carat can be
achieved.
South Africa
Bakerville
Pilot mining continues at Bakerville with an initial focus on breaking even
economically followed by increasing the resource volume as well as confidence in
the resource by upgrading some of the current inferred resource into the
indicated category. It is expected that a further resource update incorporating
indicated resources will be completed and published after the next sale of
Bakerville diamonds expected by the end of August 2009.Independent experts
involved in the verification of resources require a minimum cumulative parcel of
2,000 carats of run of mine diamonds to be produced and sold to determine
average value, before allowing any resources to be quoted in the indicated
category and this is the current objective at Bakerville. Following the most
recent Bakerville sale as announced in May 2009, some 1,233 carats have been
sold from the Bakerville project to date at a weighted average price of US$449
per carat.
The resource estimate for the Bakerville project published in the Trading Update
released 28 January 2009, reflected an Inferred Resource of 3.6 million m3 at an
average grade of 3.42 carats per hundred cubic metres.
While the final feasibility study is near completion, it is considered prudent
to wait until indicated resources can be independently verified before
completing this study. However management are sufficiently satisfied with the
results to date to progress the Mining Right application and in order to
facilitate this, consultants have been engaged to complete the Social and Labour
Plan as well as the Environmental Impact Plan, both key components of the
application process. While the feasibility study is still in progress, the
Mining Plan currently reflects a scale of operations mining and processing at
least 60,000 cubic metres per month and producing around 1,800 carats per month
at a cost of around US$4 per cubic metre.
It is expected that the Mining Right application will be finalised and submitted
to the relevant governmental authority in South Africa during Q3 2009. At this
time, it is not possible to determine when the Mining Right will be approved and
as a consequence when commercial scale mining may commence, however PDF will
undertake all preparatory work to ensure that the transition to commercial scale
operations is not unduly delayed.
Once the feasibility study is completed and the Mining Right application
submitted, a decision will be made on whether to maintain Pilot Mining at the
current scale to continue with resource development or suspend operations
pending the granting of the Mining Right and full commercial scale
operations. Ultimately this will be a market and cash flow related decision.
As reported in the January 2009 Trading Update, to expand the project to full
commercial scale it will be necessary to purchase the Zamenkomst farm on which
the operation is currently situated. The final payment for this purchase of
ZAR3.22 million (US$0.39 million) was made in June 2009 and the purchase will be
finalised with the final transfer of deeds which is underway at present.
Harts River - Brussels Area
No further work has been undertaken on the ground at Harts River however a
resource update has been completed which estimates the Harts River resource at
125,000 carats with an average resource value of US$1,043 per carat from 22.7
million cubic metres at a grade of 0.55 carats per hundred cubic metres. The
resource summary is shown in the Resources section below.
Bloemhof
There are currently no plans to undertake additional work on this project. The
Company is currently considering the best options to maximise value from the
project including a possible sale or joint venture arrangement to further
develop the project.
DRC
Longatshimo River
This project is currently on hold and no further work has been undertaken on the
ground at Longatshimo River however with the bulk sampling work undertaken to
date, a resource update has been completed which reflects increased confidence
in the resource base with 0.49 million carats now in the indicated category and
a total resource of 3.57 million carats. The resource summary table is reflected
in the Resources section below.
Tshikapa River
This project is now on hold and no further work has been undertaken by PDF on
the ground at Tshikapa River.
Options to enter into joint venture arrangements with other operators in the DRC
to develop these projects jointly are still being considered although limited
progress has been made to date.
CAR
Dimbi
This project is now on hold and no further work has been undertaken on the
ground at Dimbi. In line with the Company's current strategy the Dimbi project
will remain suspended until market conditions change materially or a decision is
made on its future. Apart from resuming operations if market conditions are
conducive, a number of options are being considered for the future of the
project, including if necessary a possible sale or the transfer of the equipment
to the Company's DRC projects.
Etoile
As part of the current strategy of reducing costs where possible, the Company
has decided not to renew the permits for Etoile, in effect dropping the Etoile
project. In making this decision, Management's view was that in current market
conditions, the Company was unlikely to pursue the project in the foreseeable
future and as a consequence expending further capital to maintain the permits
was not considered prudent. Further it is Management's view that in the current
climate, it was unlikely that any other company would be in a position to take
up these permit areas in the near future.
Resource Update
Given that a number of the Company's projects have been put on hold at present
and the general strategy is to reduce unnecessary expense wherever possible, the
updating of geological resources is being undertaken on a project by project
basis where it is considered there is sufficient new information to warrant an
update. To date resources for the Longatshimo River and Harts River projects
have been re-evaluated and updated. The results of the updates are reflected in
the tables below.
More stringent guidelines on the definition of inferred resources relative to
the March 2008 resource estimate, have been applied by Venmyn Rand (Pty) Ltd,
the independent qualified persons involved in the verification process and as a
consequence, some resource areas previously categorized as inferred resources
have been excluded. However new areas have also been included where additional
sampling at sufficient densities has been undertaken subsequent to the March
2008 Resource Statement.
As additional work is completed and the quality of data improves, this in turn
increases the overall confidence in the resource estimate. This is reflected not
only in the inclusion of indicated resources for Longatshimo River project, but
also in the quality of the inferred resources.
+-------------+----------+------------+--------+----------+------------+------------+---------------+--------------+----------+---------------+
| HARTS RIVER RESOURCE STATEMENT - 31 MAY 2009 | | | | | |
+----------------------------------------------------------------------+------------+---------------+--------------+----------+---------------+
| | | | | | | | | | | |
+-------------+----------+------------+--------+----------+------------+------------+---------------+--------------+----------+---------------+
| PROJECT | PROJECT | FARM | FARM |RESOURCE | GRAVEL | GRADE | CARATS |ATTRIBUTABLE | DIAMOND |BOTTOM SCREEN |
| | AREA | NAME | NO. |CATEGORY | VOLUME |(ct/100m3) | | CARATS * | VALUE | SIZE CUTOFF |
| | | | | | (m3) | | | |(US$/ct) | (mm) |
+-------------+----------+------------+--------+----------+------------+------------+---------------+--------------+----------+---------------+
| Harts River | Brussels | Zamenkomst | 819 HN |Inferred | 2,866,000 | 0.55 | 15,704 | 11,621 | 1,043 | 2.00 |
+ + +------------+--------+ +------------+------------+---------------+--------------+----------+---------------+
| | | Uitenhage | 826 HN | | 2,057,000 | 0.55 | 11,282 | 8,349 | 1,043 | 2.00 |
+ + +------------+--------+ +------------+------------+---------------+--------------+----------+---------------+
| | | Gamabot | 733 HN | | 4,969,000 | 0.57 | 28,250 | 20,905 | 1,043 | 2.00 |
+ + +------------+--------+ +------------+------------+---------------+--------------+----------+---------------+
| | | Zwartkrans | 732 HN | | 6,436,000 | 0.55 | 35,300 | 26,122 | 1,043 | 2.00 |
+ + +------------+--------+ +------------+------------+---------------+--------------+----------+---------------+
| | | Lockerbie | 727 HN | | 6,333,000 | 0.55 | 34,735 | 25,704 | 1,043 | 2.00 |
+-------------+----------+------------+--------+----------+------------+------------+---------------+--------------+----------+---------------+
| GRAND TOTAL / AVE HARTS RIVER | 22,661,000 | 0.55 | 125,271 | 92,700 | 1,043 | 2.00 |
+---------------------------------------------------------+------------+------------+---------------+--------------+----------+---------------+
| | | | | | | | | | | |
+-------------+----------+------------+--------+----------+------------+------------+---------------+--------------+----------+---------------+
| * Assumes PDF has a 74% interest in the Harts River project after | | | | |
| exercise of Panex Option | | | | |
+-------------+----------+------------+--------+----------+------------+------------+---------------+--------------+----------+---------------+
+-------------------+------------+------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| LONGATSHIMO RIVER RESOURCE STATEMENT - 31 MAY 2009 | | | | | |
+------------------------------------------------------------------------------------+------------+------------+--------------+------------+------------+
| | | | | | | | | | | |
+-------------------+------------+------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| | | | | | | | | | | |
+-------------------+------------+------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| PROJECT | PROJECT | RESOURCE | GRAVEL | RESOURCE | GRAVEL |REC. GRADE | CARATS |ATTRIBUTABLE | DIAMOND | BOTTOM |
| | AREA | BLOCK | TYPE | CATEGORY | VOLUME |(ct/100m3) | | CARATS * | VALUE | SCREEN |
| | | | | | (m3) | | | | (US$/ct) | SIZE |
| | | | | | | | | | | CUTOFF |
| | | | | | | | | | | (mm) |
+-------------------+------------+------------+------------+------------+------------+------------+------------+--------------+------------+------------+
|Longatshimo River | Kapopo | I1 |Floodplain | Indicated | 703,800 | 18.63 | 131,136 | 131,136 | 117 | 1.60 |
| | | | / blanket | | | | | | | |
+ + +------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| | | TOTAL INDICATED | 703,800 | 18.63 | 131,136 | 131,136 | 117 | 1.60 |
+ + +--------------------------------------+------------+------------+------------+--------------+------------+------------+
| | | I2 | All | Inferred | 8,457,000 | 13.94 | 1,178,977 | 1,178,977 | 117 | 1.60 |
+ + +------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| | | TOTAL INFERRED | 8,457,000 | 13.94 | 1,178,977 | 1,178,977 | 117 | 1.60 |
+ +------------+--------------------------------------+------------+------------+------------+--------------+------------+------------+
| | TOTAL KAPOPO RESOURCES | 9,160,800 | 14.30 | 1,310,114 | 1,310,114 | 117 | 1.60 |
+ +---------------------------------------------------+------------+------------+------------+--------------+------------+------------+
| | Kamonia | Y1 |Floodplain | Indicated | 557,500 | 32.82 | 182,963 | 182,963 | 117 | 1.60 |
| | | | / blanket | | | | | | | |
+ + +------------+------------+ +------------+------------+------------+--------------+------------+------------+
| | | Y2 | Palaeo | | 1,450,900 | 12.16 | 176,492 | 176,492 | 117 | 1.60 |
| | | | Channel | | | | | | | |
+ + +------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| | | TOTAL INDICATED | 2,008,400 | 17.90 | 359,455 | 359,455 | 117 | 1.60 |
+ + +--------------------------------------+------------+------------+------------+--------------+------------+------------+
| | | Y3 | All | Inferred | 6,969,000 | 26.24 | 1,828,474 | 1,828,474 | 117 | 1.60 |
+ + +------------+------------+ +------------+------------+------------+--------------+------------+------------+
| | | Y4 | All | | 240,000 | 28.82 | 69,171 | 69,171 | 117 | 1.60 |
+ + +------------+------------+------------+------------+------------+------------+--------------+------------+------------+
| | | TOTAL INFERRED | 7,209,000 | 26.32 | 1,897,645 | 1,897,645 | 117 | 1.60 |
+ +------------+--------------------------------------+------------+------------+------------+--------------+------------+------------+
| | TOTAL KAMONIA RESOURCES | 9,217,400 | 24.49 | 2,257,100 | 2,257,100 | 117 | 1.60 |
+-------------------+---------------------------------------------------+------------+------------+------------+--------------+------------+------------+
| GRAND TOTAL / AVE LONGATSHIMO RIVER | 18,378,200 | 19.41 | 3,567,214 | 3,567,214 | 117 | 1.60 |
+-------------------+------------+------------+------------+------------+------------+------------+------------+--------------+------------+------------+
Additional resource updates are in progress and will be released as they are
completed.
The resource updates have been independently verified by Mrs Catherine Telfer,
a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and
Gas Companies, and a director of Venmyn Rand (Pty) Ltd. Statements to this
effect may be accessed on the Company's website. Mrs Catherine Telfer consents
to inclusion of the resource statements in this release in the form and context
in which they appear.
For more information on PDF, please visit: http://www.pangeadiamondfields.com/
+-----------------------------+--------------------------+---------------------------+
| Pangea DiamondFields plc | Ambrian Partners Limited | Walbrook PR Ltd |
| | | |
+-----------------------------+--------------------------+---------------------------+
| Brett Thompson | Richard Brown / Richard | Louise Goodeve / Leah |
| | Greenfield | Kramer |
+-----------------------------+--------------------------+---------------------------+
| T: +27 11 438 4100 | T: +44 (0) 20 7634 4700 | T: +44 (0) 20 7933 8780 |
| | | |
+-----------------------------+--------------------------+---------------------------+
Note: The information in this statement has been reviewed by Mr Brett Thompson,
B Eng (Mining), Grad Dip Applied Finance & Investment, FSAIMM, MAusIMM and Mr
Anton Esterhuizen B Sc (Geology), MSc (Mineral Exploration), FGSSA, MSME who are
qualified persons for the purposes of the AIM Guidance Note for Mining, Oil and
Gas Companies. Mr Thompson is Chief Executive Officer of Pangea DiamondFields
plc and has over 24 years experience in mining operations with some 12 years
specifically in diamond mining and exploration. Mr Anton Esterhuizen is Chief
Exploration Officer of Pangea DiamondFields plc and has over 30 years experience
in exploration activities throughout the world and has been the recipient of
numerous awards for his exploration successes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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