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Proactiveinvestors United Kingdom African Diamonds http://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom African Diamonds RSS feed en Wed, 16 May 2012 17:11:28 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[African Diamonds shareholders vote for takeover by Lucara ]]> http://www.proactiveinvestors.co.uk/companies/news/23382/african-diamonds-shareholders-vote-for-takeover-by-lucara-23382.html The sale of African Diamonds (LON:AFD) to Lucara Diamonds (TSX-V:LUC) moved a step closer today, after AFD shareholders voted in favour of the deal.

Last month the company recommended the £51 million takeover bid from its joint venture partner. AFD and Lucara are currently developing the AK6 diamond mine in Botswana.

Lucara will take full ownership of AK6, and African Diamonds’ other exploration assets will be spun-out into a new and separate entity - Botswana Exploration.

African Diamonds shareholders will receive 0.8 Lucara shares and 1 Botswana Exploration shares for each share held.

"I am pleased that the shareholders have resoundingly voted in support of the sale of African Diamonds to Lucara,” chairman John Teeling said.

“The transaction should complete in early January 2011 when shareholders will receive both their Lucara and Botswana Diamonds shares.”  

“We hope to list Botswana Diamonds on AIM during January 2011".

Back in October the AFD boss said the logic of the deal is compelling.

“Marrying AFD and Lucara will create a C$240 million emerging diamond producer controlling two new kimberlite diamond mines,” Teeling said in October.

“AFD shareholders win in three ways, they will hold an indirect stake in AK6 ... they get 26.57% of the Lucara interest in the high diamond value Mothae mine ... and they will get 100% of Botswana Exploration.”

 

]]> Fri, 26 Nov 2010 13:21:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/23382/african-diamonds-shareholders-vote-for-takeover-by-lucara-23382.html <![CDATA[African Diamonds says AK6 is progressing on track ]]> http://www.proactiveinvestors.co.uk/companies/news/22665/african-diamonds-says-ak6-is-progressing-on-track-22665.html African Diamonds (LON:AFD) told investors in a project update this afternoon that the AK6 project in Botswana is progressing on track with long lead items ordered and senior staff engaged.

African Diamonds and Lucara Diamonds Corp (TSX-V:LUC) are currently joint venture partners in the AK6 diamond development project, after Lucara bought De Beers' stake in the project earlier this year. African Diamonds owns 40% of AK6, as well as a portfolio of exploration projects in Botswana.

The company recently recommended a £51 million takeover bid from its joint venture partner and today chairman John Teeling said he is confident that shareholders will vote in favour of the takeover at a meeting later this month.

"I am delighted at the progress being made on the development of AK6,” Teeling said. 

“The target of Q4 2011 commissioning is in sight with a ramp up of production during 2012.”

“The demand for quality diamonds remains strong while the supply is at best flat ... When AK6 comes on stream it will be one of a limited number of kimberlite diamond mines in production.”

Initial development activities began earlier this year after the completion of the AK6 feasibility study in June.

The partner contractor, Dowding Reynard and Associates (DRA), has so far focused on ‘critical schedule’ activities to meet the Q1 2012 target date to start production. To meet this deadline the mine commissioning will start in Q4 2011.  

Last month African Diamonds recommended the Lucara bid that values the company at C$82 million, approximately £51 million.

Lucara will take full ownership of AK6, and African Diamonds’ other exploration assets will be spun-out into a new and separate entity - Botswana Exploration.

African Diamonds shareholders will receive 0.8 Lucara shares and 1 Botswana Exploration shares for each share held.

The logic of this deal is compelling,” Teeling said in October.

Marrying AFD and Lucara will create a C$240 million emerging diamond producer controlling two new kimberlite diamond mines,” Teeling said.  

“AFD shareholders win in three ways, they will hold an indirect stake in AK6 ... they get 26.57% of the Lucara interest in the high diamond value Mothae mine ... and they will get 100% of Botswana Exploration.”

On completion Botswana Exploration will join AIM and the Botswana Stock Exchange.

African Diamond shareholder will vote on the proposal on 24 November 2010.

]]> Tue, 02 Nov 2010 15:35:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/22665/african-diamonds-says-ak6-is-progressing-on-track-22665.html <![CDATA[African Diamonds rejects ex-directors' royalty claim on AK6 diamond discovery ]]> http://www.proactiveinvestors.co.uk/companies/news/22299/african-diamonds-rejects-ex-directors-royalty-claim-on-ak6-diamond-discovery-22299.html African Diamonds (LON:AFD) announced that two of its former directors have initiated legal proceedings against the company, claiming they are entitled to a 3% royalty from the AK6 diamond discovery.

African Diamonds responded that the “claim is without merit” and pledged to vigorously defend against it.

In their claim, the directors Mark Scowcroft and Leon Daniels are referring to an agreement dated 12 July 2002 relating to the sale of their private company, Kukama Mining & Exploration Proprietary Limited, to African Diamonds.

The AK6 diamond discovery was made on a De Beers controlled concession joint ventured with African Diamonds in 2004.

The company also said that the Lucara Diamonds Corp (TSX-V:LUC) offer and negotiations remain unaffected. The conduct of, and obligations under, the litigation will be retained by African Diamonds.

On 4 October, African Diamonds recommended a takeover offer from Lucara Diamonds which values the company at C$82 million, approximately £51 million.

The deal effectively sees Lucara buying AFD’s stake in the AK6 diamond deposit. In return AFD shareholders will receive a 26.57% stake in the Canadian company.

AFD owns 40% of AK6, as well as a portfolio of exploration projects in Botswana.

Lucara’s primary asset is a 75% stake in the Mothae Diamond Mine in Lesotho.

Today's announcement did not move the shares in African Diamonds in either direction.

According to African Diamonds chairman John Teeling, the Lucara deal will create a C$240 million emerging diamond producer controlling two new kimberlite diamond mines.

]]> Thu, 21 Oct 2010 09:57:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/22299/african-diamonds-rejects-ex-directors-royalty-claim-on-ak6-diamond-discovery-22299.html <![CDATA[African Diamonds recommends Lucara takeover offer ]]> http://www.proactiveinvestors.co.uk/companies/news/21683/african-diamonds-recommends-lucara-takeover-offer-21683.html African Diamonds (LON:AFD) has recommended a takeover offer from Lucara Diamonds Corp (TSX-V:LUC) which values the company at C$82 million, approximately £51 million.

The deal effectively sees Lucara buying AFD’s stake in the AK6 diamond deposit. In return AFD shareholders will receive a 26.57% stake in the Canadian company.

"The logic of this deal is compelling,” AFD chairman John Teeling said. 

Lucara is a well-funded Diamond mining company, and an associate of the Lundin Group (TSX:LUN). The company’s primary asset is a 75% stake in the Mothae Diamond Mine in Lesotho.

AFD and Lucara are currently joint venture partners in the AK6 diamond development project, after Lucara bought De Beers' stake in the project earlier this year. AFD owns 40% of AK6, as well as a portfolio of exploration projects in Botswana.

The exploration assets will be spun-out into a new AIM-listed company, which will be called Botswana Exploration.

Under the terms of the deal AFD shareholders will receive 0.8 Lucara shares and 1 Botswana Exploration shares for each share held.

“Marrying AFD and Lucara will create a C$240 million emerging diamond producer controlling two new kimberlite diamond mines”, Teeling said. 

“AFD shareholders win in three ways, they will hold an indirect stake in AK6 ... they get 26.57% of the Lucara interest in the high diamond value Mothae mine ... and they will get 100% of Botswana Exploration.”

On completion Botswana Exploration will join AIM and the Botswana Stock Exchange.

AFD values the Botswana Exploration assets at 7p per share.

With the backing of Lundin, Lucara will push ahead with the development of both the AK6 and Mothae diamond mines.

“The new company, with strong financial backing, will be perfectly poised to exploit an expected gap in diamond supply.”

“The track record of the Lundin Group, the backers of Lucara, in building shareholder value is outstanding.”

“The objective of the Lundin Group is to use Lucara to build a mid tier diamond producer.  The board of AFD endorse and support this strategy.” 

AFD shareholders will vote on the proposal at a meeting on 31 October, 75% of the voting rights are required to approve the deal.

]]> Mon, 04 Oct 2010 08:10:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/21683/african-diamonds-recommends-lucara-takeover-offer-21683.html <![CDATA[African Diamonds confirms unsolicited takeover approach ]]> http://www.proactiveinvestors.co.uk/companies/news/20000/african-diamonds-confirms-unsolicited-takeover-approach-20000.html This morning, after shares surged over 20% yesterday, African Diamonds (LON:AFD) confirmed that it has received an unsolicited takeover proposal from an unnamed bidder. However the offer, at an undisclosed price, fell short of the board’s valuation.

In the statement, the company said: “The board of African Diamonds does not consider the proposal as currently constituted to be one it would recommend to shareholders”.

Furthermore, African Diamonds caution that “there can be no certainty that an offer will be made for African Diamonds”

The company also noted that, as it is controlled and centrally managed outside the UK, it is not subject the City Code on Takeovers and Mergers.

In reference to its project development, the company said that it “continues to progress financing options regarding the development of AK6” and it is discussing additional financial facilities with a potential investor.

The Ak6 diamond deposit in Botswana, where mine commissioning is scheduled for this year, is African Diamonds principle asset.

An updated feasibility study, reported in June, study considered processing at an initial throughput rate of 2.5Mtpa (million tonnes per annum), increasing to 4Mtpa within 4 years. AK6’s 324m deep open-cast pit will be mined over an 11 year mine life.

AK6 is being developed through a JV between African Diamonds – with a 40% interest - and Lucara Diamond Corporation (TSX-V: LUC), an associate of the Lundin Group of companies, who own a 60% controlling stake.

In March, Lucara submitted a revised resource statement which valued the AK6 in situ indicated resource at $2.2 billion.

The deposit has 51 million tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht.

Formerly, African Diamonds had been working with De Beers on the project before Lucara bought out the major South African mining group, in 2009.

African Diamonds brokered the deal between De Beers and Lucara.

]]> Fri, 13 Aug 2010 08:27:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/20000/african-diamonds-confirms-unsolicited-takeover-approach-20000.html <![CDATA[African Diamonds' A6 project on track for Q4 2010 commissioning ]]> http://www.proactiveinvestors.co.uk/companies/news/18229/african-diamonds-a6-project-on-track-for-q4-2010-commissioning-18229.html African Diamonds (LON:AFD) said its AK6 diamond project in Botswana is on track for commissioning in Q4 2010 after receiving an updated feasibility study, and added it is negotiating the marketing terms of the mining license with the government of Botswana.

The study proposes a process plant designed at an initial throughput rate of 2.5 Mtpa (million tonnes per annum), which would increase to 4 Mtpa in 4 years. The revised mining plan calls for a smaller number of carats being produced at a higher diamond value.

The indicated resource at a 1.5 mm bottom cut-off, an average grade of 16 cpht (carat per hundred tonnes) and assumes an average diamond price of US$243/carat. The bottom of the open cast pit is 324 metres and will be mined over an 11 year mine life.

Operating costs over the life of mine are estimated to be US$17.20 per tonne of ore treated. The first phase requires a capital investment of US$120 million, including the processing plant, all mine site and off site infrastructure along with a 13% contingency. This is a significant increase over the conceptual level Value Engineering Study, including a 25% increase in throughput representing US$14 million, foreign exchange movements accounting for 37% of the increase, or US$20 million, and scope changes representing US$20 million.

Work is planned to start in July 2010 and the first diamonds are expected to be recovered during the final quarter of 2011.

Whilst acknowledging the increased costs, London-based stockbroker FinnCap, in an analysis note to investors, commented: “Perspective is important, as the final life of mine capex of $165 million is substantially less than the original De Beers estimate of $300 million”.

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African Diamonds has said that a number of proposals has already been received from diamantaires and are currently under evaluation.

“We are very pleased that the joint venture board has received the updated feasibility study and that approval has been given to proceed with implementation ensuring that the project remains on track for our Q4 2011 commissioning.  We are also delighted that the marketing terms in the Mining License have been satisfactorily addressed with the (Botswana government) and that sound progress has been made with raising project finance.  We are very pleased to have Ribson leading the Boteti management team,” said managing director of African Diamonds James Campbell.

African Diamonds holds a 40% stake in the project after exercising an option in April.

Whilst progressing AK6, African Diamonds said it also plans to ramp up exploration of its 100%-owned Botswana exploration licences. With the initial focus on AK8, AK9 and BK5, the company believes that they each have the potential to be stand-alone or feeder mines to the AK6.

According to African Diamonds, the drilling may reveal that grades could be higher in AK8 and AK9 and that the size of BK5 may triple, based on a thorough review of data from six years of drilling and prospecting. The extensive 800 hole RC drilling programme is expected to cost approximately $1m, and it will get underway the coming weeks.

]]> Tue, 29 Jun 2010 09:58:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/18229/african-diamonds-a6-project-on-track-for-q4-2010-commissioning-18229.html <![CDATA[African Diamonds set to start drilling in Botswana ]]> http://www.proactiveinvestors.co.uk/companies/news/17540/african-diamonds-set-to-start-drilling-in-botswana-17540.html African Diamonds (LON:AFD) said it is ready to begin an 800 hole reverse circulation (RC) drilling programme on the AK8, AK9 and BK5 kimberlite exploration projects which are located in Orapa, Botswana. Additionally, the company said it expects board approval for the final AK6 feasibility studies at the end of June.

AK6 is the company’s key development project, and through a joint venture with Lucara Diamonds (CVE:LUC), an associate company of the Lundin Group, it is scheduled to start diamond production in Q3 2011.

Whilst progressing AK6, African Diamonds said it also plans to ramp up exploration of its 100%-owned Botswana exploration licences. With the initial focus on AK8, AK9 and BK5, the company believes that they each have the potential to be stand-alone or feeder mines to the AK6.

"The focus of the past two years has been on AK6.  It is now time to evaluate our other assets in the Orapa region.  African Diamonds holds 100% of some of the very best diamond ground in Botswana, containing over 20 known kimberlites”, African Diamonds chairman John Teeling commented.

"We have spent the past three months re-assessing the prospecting and drilling data on AK8, AK9 and BK5.  We will shortly begin a drilling programme of up to 800 reverse circulation drill holes to clarify the size, grade and value per carat of each of the three pipes."

The AK8 prospect is a two lobe, 5 hectare kimberlite. The pipe is estimated to contain 20m tonnes of kimberlite to a depth of 300m, with grades estimated between 5-10 carats per hundred tonnes (cpht). AK9 is a 3 hectare kimberlite pipe, which is estimated to contain 11m tonnes to a depth of 250m. According to African Diamonds, the AK9 diamond grade is estimated to be between 5-10cpht, with upside potential. BK5 has a surface extent of 2.7 hectares, however the complete believe that the anomaly is at least seven hectares in size, at BK5 historical records of the surface kimberlite suggest a grade of approximately 7cpht.

According to African Diamonds, the drilling may reveal that grades could be higher in AK8 and AK9 and that the size of BK5 may triple, based on a thorough review of data from six years of drilling and prospecting. The extensive 800 hole RC drilling programme is expected to cost approximately $1m, and it will get underway the coming weeks. 

One of the program’s key aims is to accurately delineate the size of each kimberlite and to estimate microdiamond and heavy mineral grades. The company believe that the results will enable it to move the prospects to engineering and financial studies, to explore whether or not the kimberlites can be developed as open pit mines on a stand alone basis or as feeder mines to the AK6 mine.

At the AK8 and AK9 kimberlites, the company’s principal targets are the close to surface/outcropping areas where extensive data already exists. African Diamonds noted that whilst BK5 is at an earlier stage of exploration, it also has significant potential.

At the AK6 mine development, in March, Lucara submitted a revised resource estimate for the AK6, reporting 51m tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht. Notably, the average modelled diamond value jumped from US$151 per carat to US$194 per carat in Lucara’s resource statement, giving an in situ value of the indicated resource of US$2.2 billion. The update was conducted as part of the ongoing feasibility study.

AK6 – located in the Orapa kimberlite field some 25 kilometres south of the massive Orapa diamond mine - was discovered in the 1970s, but like many of the other small pipes prospected by De Beers, was considered unworthy of further attention at that time.

African Diamonds listed on AIM in 2003, and exploration began in earnest with the company amassing a large area to the north and east of the giant Orapa diamond Mine.

Subsequently, the company established the Boteti exploration and development JV with De Beers Exploration, with each party consolidating prospective ground to the pot - African Diamonds’ 21 kimberlites joining nine from De Beers, including AK6.

All the exploration work was funded by De Beers. Initially, the JV was 49-51% in favour of De Beers, with their share rising to 70% on completion of the first feasibility study. AK6 was one of the first kimberlites to be bulk sampled by the new JV.

AK6 returned particularly encouraging results from a 100 tonne sample. With 165 macro diamonds retrieved, totalling over 22 carats and the largest stone weighing in at 1.32 carats. The modelled grade for the sample was 25 carats per hundred tonnes (cpht).  The JV continued its exploration work spending $35m.Diamond drilling, large diameter drilling, trenching and bulk sampling firmed up the size and shape of the multi-lobed AK6 pipe.

The JV identified that AK6 comprises three distinct lobes – North, South and Central – of which the South lobe, some 750m in depth, is far the greatest, containing some 72% of the resource tonnage in its top 400 metres at an average grade of 21 cpht.

In 2009, the De Beers JV came to an end as the South African diamond miner sold its interest in the partnership to Toronto–listed Lucara. “For six years, we partnered with De Beers on AK6 and other projects in Botswana.  Together we found a diamond mine but, over time, the needs and aims of African Diamonds diverged from those of De Beers”, Teeling said of the De Beers JV.

When Lucara took over De Beers' 70% stake in the AK6 project for US$49 million, it agreed a new partnership with African Diamonds. As part of the new agreement, the AIM listed company gained the right to increase its interest from 29% to 40%.

"This is another significant step on the road to becoming a significant diamond miner ... By the end of 2011 African Diamonds should begin to see a flow of up to 400,000 carats per year with a value of up to US$200 per carat once full production is reached", Teeling commented in May.

]]> Thu, 10 Jun 2010 16:22:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/17540/african-diamonds-set-to-start-drilling-in-botswana-17540.html <![CDATA[African Diamonds readies new drill campaign in Botswana ]]> http://www.proactiveinvestors.co.uk/companies/news/17508/african-diamonds-readies-new-drill-campaign-in-botswana-17508.html The group believes it is time to explore the AK8, AK9 and BK5 kimberlites while the feasibility study for its flagship AK6 looks set to be cleared by the board at the end of June.

]]> Thu, 10 Jun 2010 09:21:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/17508/african-diamonds-readies-new-drill-campaign-in-botswana-17508.html <![CDATA[African Diamonds’ AK6 poised to deliver the goods at last ]]> http://www.proactiveinvestors.co.uk/companies/news/16698/african-diamonds-ak6-poised-to-deliver-the-goods-at-last-16698.html …the South lobe contains a relative abundance of the rare Type IIa diamonds, which contain virtually no nitrogen, and can – like the Cullinan and Koh-i-noor diamonds - be large and extremely valuable

]]> Thu, 20 May 2010 08:25:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/16698/african-diamonds-ak6-poised-to-deliver-the-goods-at-last-16698.html <![CDATA[African Diamonds exercises AK6 option, now holds 40% stake ]]> http://www.proactiveinvestors.co.uk/companies/news/15862/african-diamonds-exercises-ak6-option-now-holds-40-stake-15862.html African Diamonds plc (AIM: AFD) has now exercised its option with regard to the AK6 diamond deposit in Botswana, thus increasing its stake in the project to 40%. The transaction follows the recent £9.6m placing and the strategic partnership with Lucara Diamond Corporation (TSX-V: LUC).

"This is another significant step on the road to becoming a significant diamond miner”, African Diamonds chairman John Teeling commented. “By the end of 2011 African Diamonds should begin to see a flow of up to 400,000 carats per year with a value of up to US$200 per carat once full production is reached."

When Lucara - an associate of the Lundin Group of companies - took over De Beers' 70% stake in the AK6 project for US$49 million, it agreed a new partnership with African Diamonds. As part of the new agreement, the AIM listed company gained the right to increase its interest from 29% to 40%.

On 6 April 2010, African Diamonds raised approximately £9.6m through the placing of 24.1m shares at 40p each. Today, the company has confirmed it has now increased its stake in AK6 to 40% for a total cash consideration of US$8 million paid to Lucara Diamond Corporation and Wati Ventures Pty Ltd. The remaining 60% is retained by Lucara.

Last month, Lucara submitted a revised resource estimate for the AK6, reporting 51m tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht. Notably, the average modelled diamond value jumped from US$151 per carat to US$194 per carat in Lucara’s resource statement, giving an in situ value of the indicated resource of US$2.2 billion.

The update was conducted as part of an ongoing feasibility study being completed by Lucara on AK6 which is expected to be completed in May 2010.

In March, African Diamonds reported that the pace of development at the AK6 diamond mine is accelerating, with the mine expected to come on stream in 2011 and within previously set cost parameters. Indeed in this morning’s announcement John Teeling stated: “As the final studies on AK6 are nearing completion, the fundamentals of the mine continue to improve.   The mine is expected to come on stream in late 2011.”

As part of the placing, the company’s directors and families are investing a total of £1m. John Teeling bought 750,000 shares and he subsequently owns approximately 4m shares, which represents 4% of the company’s enlarged share capital. Non-executive directors David Horgan and James Finn both bought 500,000 shares, taking each of their shareholding to approximately 3.2m shares, representing 3.28% of the enlarged share capital.

]]> Thu, 22 Apr 2010 16:36:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/15862/african-diamonds-exercises-ak6-option-now-holds-40-stake-15862.html <![CDATA[Black Rock and Altus Resource Capital join African Diamonds' significant shareholders ]]> http://www.proactiveinvestors.co.uk/companies/news/15460/black-rock-and-altus-resource-capital-join-african-diamonds-significant-shareholders-15460.html African Diamonds (AIM: AFD) informed investors that it has received notification on 9 April 2010 that Black Rock has joined the company’s significant shareholders' list with 4.07% of the company’s issued share capital.

Black Rock has an indirect interest in 4,088,600 shares.

The company also noted that separately, it was also notifiedon the same day that the Royal Bank of Scotland - as Trustee of the Black Rock Gold & General Fund - has a direct interest in 3,998,600 shares in African Diamonds, following the recent placing. This holding represents 3.98% of the company's issued share capital.

Also as a result of the placing, on  9 April, the closed-end investment company Altus Resource Capital Ltd notified African Diamonds that it is interested in 5,000,000 shares, representing 4.98% of the issued ordinary share capital.

Last week, African Diamonds raised approximately £9.6m through the placing of 24.1m shares at 40p each. The company intends to use the proceeds to increase its stake in the flagship AK6 discovery in Botswana, fund some of the development of AK6 and for general working capital and exploration.

African Diamonds obtained the right to increase its stake in AK6 through an agreement with its joint venture partner, Lucara Diamond Corp (TSX-V: LUC). The Toronto listed company joined the JV in November when it acquired De Beers' c.70% shareholding.  African Diamonds intends to exercise its option for £5 million and increase its interest from 29% to 40%.

In March, Lucara submitted a revised resource estimate for the AK6, reporting 51m tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht.  Notably, the average modelled diamond value jumped from US$151 per carat to US$194 per carat in Lucara’s resource statement, giving an in situ value of the indicated resource of US$2.2 billion.

The update was conducted as part of an ongoing feasibility study being completed by Lucara on AK6 which is expected to be completed in May 2010.

]]> Mon, 12 Apr 2010 12:55:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/15460/black-rock-and-altus-resource-capital-join-african-diamonds-significant-shareholders-15460.html <![CDATA[African Diamonds raise £9.6m to increase stake in AK6 and fund new exploration ]]> http://www.proactiveinvestors.co.uk/companies/news/15210/african-diamonds-raise-96m-to-increase-stake-in-ak6-and-fund-new-exploration-15210.html African Diamonds (AIM: AFD) has raised approximately £9.6m through the placing of 24.1m shares at 40p each. The company will use the proceeds to increase its stake in the flagship AK6 discovery to 40% from the current 29%, fund some of the development of AK6 and for general working capital and exploration.

The company’s broker’s FinnCap conducted the placing and the new shares are expected to be admitted to London’s AIM market on 8 April 2010.

"I am delighted by the support African Diamonds has received from a significant number of institutional investors”, African Diamonds chairman John Teeling commented. “The funds raised will be used to increase our stake in the AK6 diamond project to 40%, to fund an early works programme on the mine, and to explore promising diamond targets on our Botswana acreage”.

“Targets such as AK8 and AK9 are known to shareholders, but we have other prospective kimberlites, in particular, BK5.  We now have the time and money to focus on these targets.  There are more diamond mines to be discovered in Botswana", Teeling added.    

African Diamonds obtained the right to increase its stake in AK6 through an agreement with its joint venture partner, Lucara Diamond Corp (TSX-V: LUC). The Toronto listed company joined the JV in November when it acquired De Beers' c.70% shareholding.  African Diamonds intends to exercise its option for £5 million and increase its interest from 29% to 40%.

Lucara is a Toronto listed diamond company, backed by the highly regarded Lundin Group, a US$10 billion group of 12 oil and mining companies, including African gold producer Red Back Mining (TSX: RBI) and base metals miner Lundin Mining (TSX: LUN).

Last week, Lucara submitted a revised resource estimate for the AK6, reporting 51m tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht.  Notably, the average modelled diamond value jumped from US$151 per carat to US$194 per carat in Lucara’s resource statement, giving an in situ value of the indicated resource of US$2.2 billion.

The update was conducted as part of an ongoing feasibility study being completed by Lucara on AK6 which is expected to be completed in May 2010.

Earlier in March, African Diamonds reported that the pace of development at the AK6 diamond mine is accelerating, with the mine expected to come on stream in 2011 and within previously set cost parameters. Indeed in this morning’s announcement John Teeling stated; “As the final studies on AK6 are nearing completion, the fundamentals of the mine continue to improve.   The mine is expected to come on stream in late 2011”.

As part of the placing, the company’s directors and families are investing a total of £1m. John Teeling bought 750,000 shares and he subsequently owns approximately 4m shares, which represents 4% of the company’s enlarged share capital. Non-executive directors David Horgan and James Finn both bought 500,000 shares, taking each of their shareholding to approximately 3.2m shares, representing 3.28% of the enlarged share capital.

In a note to investors, London-based stockbroker FinnCap commented on the importance of both the fundraising and the company’s increased stake in AK6. The broker also noted that the feasibility study, expected at the end of May, is likely to be the next piece of material news flow in AK6’s development.

FinnCap also believes that Lucara is amply qualified to build the AK6 mine.


]]> Tue, 06 Apr 2010 08:01:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/15210/african-diamonds-raise-96m-to-increase-stake-in-ak6-and-fund-new-exploration-15210.html <![CDATA[African Diamonds partner Lucara Diamond ups in situ value of AK6 to at least $2.2 billion ]]> http://www.proactiveinvestors.co.uk/companies/news/15020/african-diamonds-partner-lucara-diamond-ups-in-situ-value-of-ak6-to-at-least-22-billion-15020.html A revised resource estimate for African Diamonds (AIM:AFD) AK6 kimberlite in Botswana’s prolific Orapa district certainly caught the attention of shareholders this morning. 

The revised report, submitted last night in Canada by African Diamonds new partner on the project, Lucara Diamond Corp (TSX-V: LUC), reported 51 million tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht.   Most encouraging of all, the average modelled diamond value has jumped from $151 per carat to $194 per carat, giving an in situ value of the indicated resource of $2.2 billion.

The update was conducted as part of an ongoing feasibility study being completed by Lucara on AK6 which is expected to be completed in May 2010.

African Diamonds and De Beers initially developed the project, but in November 2009 the diamond behemoth opted to sell its stake to Lucara, a company backed by the highly regarded Lundin Group, a US$10 billion group of 12 oil and mining companies, including African gold producer Red Back Mining (TSX:RBI) and base metals miner Lundin Mining (TSX:LUN)

It is worth noting (again) that a mining license was awarded to the AK6 project in October 2008, and the Orapa district boasts excellent infrastructure and access to power, water, skilled manpower and paved roads, removing many of the hurdles that mine developers face in many other parts of the world.

Previous studies commissioned by African Diamonds have estimated Capex of US$63 million to establish the mine at 2 million tonnes a year output, which will produce over 400,000 carats at the modelled grade of 22 carats cpht. According to African Diamonds, a further US$25 million in capital expenditure could double the output.

Analyst Joe Lunn at FinnCap highlighted in his morning note that the updated carat value was positive news, and would also allow the open pit depth to be increased by 17% to 336 meters. FinnCap held its current valuation on African Diamonds at 108 pence per share.

Shares in African Diamonds tacked on 7% this morning, valuing the company at approximately £35 million.

]]> Tue, 30 Mar 2010 08:53:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/15020/african-diamonds-partner-lucara-diamond-ups-in-situ-value-of-ak6-to-at-least-22-billion-15020.html <![CDATA[African Diamonds accelerating AK6 development with mine expected to come on stream in 2011 ]]> http://www.proactiveinvestors.co.uk/companies/news/14559/african-diamonds-accelerating-ak6-development-with-mine-expected-to-come-on-stream-in-2011-14559.html In its interim results statement, African Diamonds (AIM: AFD) said the pace of development at the AK6 diamond mine in Borswana is accelerating, with the mine expected to come on stream in 2011 and within previously set cost parameters.

In the six months ended 31 December 2009, the operation was boosted by a rapid improvement in world diamond demand and prices, with the AK6 diamonds per carat value expected to be in the region of US$200 compared to US$138 as used in existing studies.

The restructured mine development plans will benefit from increased throughput in Phase-1 of up to 3 million tonnes instead of 2 million tonnes, and the company is also increasing the average size of diamonds recovered and reconfiguring production to recover large Type II diamonds.

"Our new partner, Lucara (Diamond Corp (TSX-V: LUC)), has the same objectives as us to bring the mine on stream as quickly and efficiently as possible.  The mine will come on stream at the perfect time; prices and demand are high. The recent valuation report has also vindicated our view that AK6 will produce high quality beautiful stones”, African Diamonds chairman John Teeling commented. “This is an exciting time for African Diamonds and its shareholders as we move forward and develop AK6".

The company highlighted that there is a high ratio of Type II diamonds in AK6, and these very rare diamonds contain no nitrogen and tend to be large. As such they command very high prices and some experts believe that the proportion of Type II stones in AK6 may be larger than previously estimated, African Diamonds said.

Consequently the AK6 treatment plant has been reconfigured to enable the recovery of these stones and the company believes the presence of Type II diamonds could have a very favourable impact on revenue.

African Diamonds said it is at an advanced stage in completing financing to cover expenditure in 2010 and 2011.  The company noted that it is being mindful of equity dilution, and it believes that its newly acquired right to market their percentage of AK6 output is a valuable asset which is helping in its funding.

The final feasibility study will be completed in late May, and site development will start by September 2010.  According to African Diamonds, the indications on operating and capital expenditure and revenue are in line with previously reported levels. Indeed, the company stated that whilst the world recession is hurting many, it is providing a boon to the AK6 development. According to African Diamonds, equipment prices have stabilised or fallen, delivery times have shortened and skills are available. All of which have helped maintain capex and opex within the parameters of earlier studies.

While its focus is clearly on the development of AK6, African Diamonds said other opportunities are not being neglected. Joint venture proposals are being considered on two other Botswana kimberlites in the company’s portfolio and it hopes to begin detailed exploration of a third kimberlite.

As it advances AK6 mine development, African Diamonds narrowed its pretax loss to £205,000 for the six-month period from 775,000 a year earlier.

Broker FinnCap issued a note on the company following the interim results announcement, making the point that the current heavy discount may be due to the market expecting a fund raise to finance the exercise of African Diamonds’ call option to increase its interest in AK6 from 28 percent to 40 percent.  

The broker pointed out that several key items of news flow are imminent, starting with the delivery of the revised feasibility study in May. Construction of the mine is slated to begin in September with full production being reached during the 2012 financial year.

It further noted that Lucara, an associate company of the Lundin Group, will be the operator of AK6, and that over the last 20 years, the Lundin Group has earned a good reputation for building mines on schedule and budget. It considers the diamond industry in Botswana well-established and mentioned that the government has undertaken to provide AK6 with grid power once production starts.

]]> Thu, 18 Mar 2010 08:39:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/14559/african-diamonds-accelerating-ak6-development-with-mine-expected-to-come-on-stream-in-2011-14559.html <![CDATA[African Diamonds notified of De Beers reducing stake to 4.5 pct from 5.8 pct ]]> http://www.proactiveinvestors.co.uk/companies/news/14319/african-diamonds-notified-of-de-beers-reducing-stake-to-45-pct-from-58-pct-14319.html African Diamonds PLC (AIM: AFD)  said it has today received  notification sent by letter, dated 8 March 2010, to its Dublin office that on 4 March 2010, De Beers SA reduced its holding in the company resulting in the crossing of a threshold of greater than 1 percent.

Its holding in African Diamonds is now reduced to 4.5 percent from 5.8 percent.

African Diamond’s AK6 project in Orapa, Botswana, is being developed through a joint venture between African Diamonds and Lucara Diamond Corp (TSX-V: LUC), an associate of Lundin Group. African Diamonds currently has a 30% interest in the project and Lucara owns the remaining 70%.

Last month, African Diamonds received the latest valuation of diamonds from its AK6 mine in Botswana, and at US$162 a carat, the valuation exceeded the company’s previous projections. Furthermore the valuation is US$23 per carat higher than prices used in the current AK6 development studies. The new valuation also indicates the possibility of a US$200 per carat value at production.

]]> Thu, 11 Mar 2010 15:54:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/14319/african-diamonds-notified-of-de-beers-reducing-stake-to-45-pct-from-58-pct-14319.html <![CDATA[African Diamonds says De Beers-linked account possibly involved in unnotified transfer of 1 mln shares ]]> http://www.proactiveinvestors.co.uk/companies/news/14272/african-diamonds-says-de-beers-linked-account-possibly-involved-in-unnotified-transfer-of-1-mln-shares--14272.html African Diamonds (AIM: AFD) said it has been told by its registrars that 1m shares have been sold or transferred from an account, which it believes to be controlled by De Beers, without the company being notified. If this is true the transaction breaches the rules of the Financial Services Authority (FSA).

"This is very disappointing and strange”, African Diamonds chairman John Teeling stated. “In recent weeks, a senior director of De Beers turned down an offer to sell their block at a price significantly higher than the prices they obtained in the market.  Subsequently, other approaches were made to De Beers' executives to sell their shares with no response". 

African Diamonds said that, under FSA rules, an account holder must inform the company when shareholdings breach percentage points. The account held 4.4m shares, or approximately 5.8%, and it now holds 3.4m or 4.49% of the company’s share capital.  As the company has not been informed, African Diamond’s has asked the FSA to examine the trades. 

African Diamond’s AK6 project in Orapa, Botswana, is being developed through a joint venture between African Diamonds and Lucara Diamond Corp (TSX-V: LUC), an associate of Lundin Group. African Diamonds currently has a 30% interest in the project and Lucara owns the remaining 70%.

Last month, African Diamonds received the latest valuation of diamonds from its AK6 mine in Botswana, and at US$162 a carat, the valuation exceeded the company’s previous projections. Furthermore the valuation is US$23 per carat higher than prices used in the current AK6 development studies. The new valuation also indicates the possibility of a US$200 per carat value at production, African Diamonds said.

]]> Wed, 10 Mar 2010 16:08:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/14272/african-diamonds-says-de-beers-linked-account-possibly-involved-in-unnotified-transfer-of-1-mln-shares--14272.html <![CDATA[FinnCap starts African Diamonds as a 'buy', targets 108p ]]> http://www.proactiveinvestors.co.uk/companies/news/13773/finncap-starts-african-diamonds-as-a-buy-targets-108p--13773.html FinnCap said that African Diamonds’ AK6 project in Botswana will be the most lucrative new open pit hard rock diamond project to enter production in the next 10 years. The stockbroker initiated its coverage with a ‘buy’ recommendation, targeting 108p per share. The analyst believes that the recently upgraded top-end diamond valuation, of US$200/carat, could prove to be conservative.

Earlier this week, African Diamonds received the latest diamond valuation, and at US$162 a carat, the valuation exceeds the company’s previous projections. The valuation is US$23 per carat higher than prices used in the current AK6 development studies. The new valuation also indicates the possibility of a US$200 per carat value at production, African Diamonds said.

According to FinnCap, the US$200 valuation could be a conservative estimate.  The analyst stated that up to 20% of the South lobe of the three kimberlites at AK6 could contain ultra-pure Type II diamonds similar to those produced at Gem Diamonds’ (LSE: GEM) 70%-owned Letseng mine in the Kingdom of Lesotho. According to Letšeng, its diamonds sell for the highest per carat price of any kimberlite mine.

“The key difference is that the estimated production grade of AK6, at 25 carats per hundred tonnes, is twentyfold that of Letseng. Less than 2 per cent of annual global rough diamond production is Type II”, Lunn said. “To us, the implications for AK6 are clear: this mine is set to produce substantial positive cash flow over its 12 year open pit life”.

Furthermore, the broker noted that the project’s new partner Lucara Diamond Corp (TSX-V: LUC), who raised C$110 million to finance its buy out of De Beers, suggests that institutional appetite is returning for quality diamond projects. Finncap said that African Diamonds and Lucara enjoy a good working relationship and both parties are committed to build a mine to start production in Q4 2011.

The stockbrokers price target and valuation is based on a 12 year open pit mine, and assumes that African Diamonds will exercise its recently gained option to take its overall interest in AK6 to 40%.

The AK6 diamond discovery in Orapa, Botswana, is being developed through a joint venture between African Diamonds and Lucara, an associate of Lundin Group. African Diamonds currently has a 30% interest in the project and Lucara owns the remaining 70%.

AK6 is situated on ground once held by De Beers prior to 2002, and it was through a De Beers / African Diamonds joint-venture that the pipe was discovered in 2004. Lucara acquired De Beers' stake in the project for US$49 million in November 2009.

Previously, African Diamonds noted that the new Lucara venture is more favourable than the previous De Beers partnership. Under the Lucara partnership, the company has the option to increase its stake in AK6. African Diamonds intends to exercise its option for £5 million and increase its interest to 40%. Another attractive benefit of the new venture is that now African Diamonds has the right to market its own percentage of the AK6 diamonds. In January, Teeling said the company’s position had greatly improved in recent months and Lucara has removed the project’s previous uncertainty.

]]> Fri, 26 Feb 2010 09:27:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/13773/finncap-starts-african-diamonds-as-a-buy-targets-108p--13773.html <![CDATA[African Diamonds' latest AK6 diamond valuation exceeds projections ]]> http://www.proactiveinvestors.co.uk/companies/news/13636/african-diamonds-latest-ak6-diamond-valuation-exceeds-projections-13636.html African Diamonds (AIM: AFD) has received the latest valuation of diamonds from its AK6 mine in Botswana, and at US$162 a carat, the valuation exceeds the company’s previous projections. The valuation is US$23 per carat higher than prices used in the current AK6 development studies. The new valuation also indicates the possibility of a US$200 per carat value at production, African Diamonds said.

"The US$162 a carat value on AK6 diamonds is excellent and substantially higher than previous valuations”, chairman John Teeling commented. African Diamonds is targeting first production at AK6 in late 2011. The latest valuation was conducted by Mercury Diamonds in Geneva, based on 1,760 carats of diamonds.

Mercury also stated that the AK6 diamonds presented "much upside valuation potential" if breakages can be reduced in the mining and processing stages. Accordingly, the company is making changes to its processing plant to minimise diamond breakage and enable the recovery of diamonds up to 350 carats in size.

“Drilling and recovery during exploration broke most of the large Type II diamonds.  The valuers could only value what was in front of them, but noted the potential price increases of 12 to 15% if breakage is reduced or eliminated” Teeling stated. “Typically diamond values rise exponentially with diamond size: in our sample, a 10 ct stone is worth four times, not just twice a 5 ct diamond.  We therefore anticipate that the diamond value could be over US$200 a carat”.  

Furthermore, the processing plant is being re-configured to increase the AK6 start-up capacity from 2 million tons to 2.5 - 3.0 million tons of ore a year, which is expected to have a significant impact on African Diamonds' revenue, cash flow and present value.

However Teeling also noted that the current rough diamond market is volatile, with prices having increased substantially over the past year, and it is not certain whether this trend will continue or if the current levels can be sustained.

The diamond package that was valuated consisted of 1,760 carats of diamonds, from which 1,175.7 carats were recovered from large diameter drill samples, which were subsequently processed to recover diamonds greater than 1 mm. The remaining 584.5 carats were recovered from trench samples and were processed to recover diamonds both at a 1mm and 2mm bottom cut off. Whilst the package also contained large Type IIA diamonds, which were broken during drilling, these samples did not feature in the overall valuation.

"Overall the diamonds from AK6 are deemed to be of very good quality and very attractive to diamond buyers.  Colours are generally very white and the samples showed numerous examples of 'blocky' makeable and strong crystal forms that tend to lead to strong polished yields and demand a premium”, Mercury noted.

Mercury also atated that 34% of the valuation was made up of nine large stones greater than 5 carats and that the value understates the true value proportion of the largest stones.

The AK6 diamond discovery in Orapa, Botswana, is being developed through a joint venture between African Diamonds and Lucara Diamond Corp (TSX-V: LUC), an associate of Lundin Group. African Diamonds currently has a 30% interest in the project and Lucara owns the remaining 70%.

AK6 is situated on ground once held by De Beers prior to 2002, and it was through a De Beers / African Diamonds joint-venture that the pipe was discovered in 2004. Lucara acquired De Beers' stake in the project for US$49 million in November 2009.

Previously, African Diamonds noted that the new Lucara venture is more favourable than the previous De Beers partnership. Under the Lucara partnership, the company has the option to increase its stake in AK6. African Diamonds intends to exercise its option for £5 million and increase its interest to 40%. Another attractive benefit of the new venture is that now African Diamonds has the right to market its own percentage of the AK6 diamonds. In January, Teeling said the company’s position had greatly improved in recent months and Lucara has removed the project’s previous uncertainty.

AK6 currently hosts 51.8 million tonnes to a depth of 400 meters at an average grade of 22 carats per hundred tonnes (‘cpht’) at a modeled diamond value of US$151 per carat.

]]> Tue, 23 Feb 2010 11:27:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/13636/african-diamonds-latest-ak6-diamond-valuation-exceeds-projections-13636.html <![CDATA[African Diamonds says co's position greatly improved in recent months ]]> http://www.proactiveinvestors.co.uk/companies/news/12621/african-diamonds-says-cos-position-greatly-improved-in-recent-months-12621.html At today’s AGM, African Diamonds (AIM: AFD) chairman John Teeling said the company’s position has greatly improved in recent months. Lucara Diamond Corp’s (TSX-V: LUC) acquisition of De Beers' 70% stake in the AK6 diamond discovery in Orapa, Botswana, has removed the project’s previous uncertainty, Teeling said. Additionally the chairman believes the diamond market has improved substantially in recent months and he anticipates a higher-than-expected price for AK6 diamonds, which are currently being valued in Geneva.

The joint venture partners are set to begin mine development early this year, with full production due to come on stream in the second half of next year. According to African Diamonds its new joint venture partner Lucara, an associate of the US$10 billion Lundin Group, shares its belief in the rapid development of the Orapa discovery. At full production, the mine is expected to produce one million carats of high quality diamonds, including the rare Type II diamonds. The capital cost of phase one is estimated at US$63 million, with operating costs of US$14.50 a tonne.

Under the new Lucara venture, African Diamonds has the right to market its own percentage of the AK6 diamonds. At the AGM, Teeling said that he expects the valuation to be in excess of the US$139 a carat used in the 2009 studies. The world market for diamonds has greatly improved in recent months, with substantial price increases recorded as shortages appeared this augurs well for the pending valuation, Teeling said.

Another benefit of the new Lucara partnership discussed at the AGM, was the company’s newly acquired option to increase its stake in AK6. African Diamonds intends to exercise its option for £5 million and increase its interest from 29% to 40%. John Teeling said the board are examining its options, other than equity-based, to finance the transaction and meet the expected equity contribution to the mine's phase one development.

]]> Tue, 26 Jan 2010 14:34:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/12621/african-diamonds-says-cos-position-greatly-improved-in-recent-months-12621.html <![CDATA[African Diamonds says Botswana govt approves sales of De Beers’ 70 pct stake in AK6 discovery to Lucara ]]> http://www.proactiveinvestors.co.uk/companies/news/11535/african-diamonds-says-botswana-govt-approves-sales-of-de-beers-70-pct-stake-in-ak6-discovery-to-lucara-11535.html African Diamonds PLC (AIM: AFD) said the government of Botswana has approved the sale of De Beers' 70.27% stake in the AK6 diamond discovery in Orapa, Botswana, to Lucara Diamond Corp (TSX-V: LUC), an associate of the Lundin Group, a US$10 billion group of 12 oil and mining companies, including African gold producer Red Back Mining (TSX: RBI) and base metals miner Lundin Mining Corp (TSX: LUN).

The deal was brokered by African Diamonds and announced in November.

Construction of the mine is expected to begin in mid 2010, with start up in late 2011 at 400,000 carats a year, rising to an expected 1 million carats in 2013/2014. Updating the feasibility study will continue during the holiday period. A valuation of the AK6 diamonds recovered during exploration will be undertaken during the third week of January 2010.

African Diamonds currently holds 28.381 percent of AK6, and under the De Beers/Lucara agreement has an option to acquire an additional 10.268 percent for US$7 million. If African Diamonds exercises the call option, Lucara will retain a 60 percent stake, with African Diamonds holding 38.65 percent and Wati Ventures 1.35 percent.

African Diamonds can take its stake in AK6 to 40 percent by exercising an option to acquire the Wati Ventures’s stake for US$0.7 million.

Under the agreement, the company will have the right to market its percentage of the diamonds, a valuable right likely to be central to any fundraising by African Diamonds.

]]> Fri, 18 Dec 2009 10:40:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/11535/african-diamonds-says-botswana-govt-approves-sales-of-de-beers-70-pct-stake-in-ak6-discovery-to-lucara-11535.html