The estimate is based on the evaluation of 6,392 metres of core drilling and 1,473 metres of large diameter drilling and is considered a conservative one by the qualified persons that completed the analysis.
The company revealed the inferred resource is 17.4mln tonnes (Mt), containing 780,820 carats, of which around 9.0 Mt averages 6.8 carats per hundred tonnes (cpht) for a total of 608,000 carats. Higher grade areas of 9.8 cpht have also been identified.
BK11 contains good quality white diamonds in the top 10% of global gem diamond production in terms of value per carat (ct), Tango said.
The recovery of a 1.5 ct high quality Type IIa D colour diamond is significant as it indicates the presence of top quality stones within the BK11 kimberlite, with the potential for large 100+ ct stones, the company added.
Based on the 2015 market, diamond valuation experts advise a minimum average price of US$236/ct, a modelled price of US$260/ct and an upside price of US$285/ct.
Geophysics and geological remodelling have identified a possible low-grade basalt raft near the centre of the resource, estimated to be 0.6 Mt in size. Historically, this would have diluted the feed grade to the plant considering that about 1 Mt of the deposit was treated up to February 2012 out of a total of 2.7 Mt mined. This raft is now almost completely mined away with the pit exposed and developed down to 60 metres, Tango advised.
Tango said it has run feasibility studies in parallel with the resource work and is preparing a NI 43-101 preliminary economic assessment (PEA) report. As part of this work, recently completed rock hardness measurements have enabled autogenous mill sizing to be conducted. The deposit is considered as soft in the greater diamond industry and an autogenous mill retrofit to the existing plant is being assessed.
Economic models will potentially be enhanced, Tango indicated.
“The resource tonnage and grade is consistent with our initial assessment of this acquisition opportunity and the improved diamond valuation could enhance the economics of this project,” disclosed Terry Tucker, executive chairman of Tango.
“The recently announced positive production results and recovery of exceptional stones from nearby neighbouring mining operations, that implemented similar autogenous milling technology bodes well for the future performance of BK11, and provides confidence in our development and investment decision. Our immediate goal is to focus on financing the acquisition and development cost and transition into project development and production," he added.
The BK11 mine is located on a mining licence held by Monak Ventures, a subsidiary of Firestone Diamonds.
Tango has entered into a sale of shares and claims agreement with Firestone Diamonds (LON:FDI) whereby the company has agreed to acquire all of Firestone's right in the BK11 Mine processing facility, and interest and title in the mineral rights.