One answer is that since the bottom fell out of the mining equity markets a couple of years ago, this is a company that’s now largely being kept alive through the good offices of the friends and family of the company’s Irish chairman John Teeling.
But Teeling’s a veteran of the resources space - his first marketing trip around the City of London was back in 1972 when he attempted to convince a sceptical investment community of the long-term viability of the Tara Mines in County Meath.
More than 40 years later, and the sceptics are gone, but Tara mines is still going, ranking, according to its current owner Boliden, as Europe’s largest zinc mine and the world’s ninth largest.
Not quite on the same scale, but with similar foresight, Teeling more recently marketed the AK6 kimberlite pipe in Botswana through a London-listed vehicle called African Diamonds.
This too met with scepticism on occasion, and Teeling found himself battling to get the story over more than once. That AK6 is now a prized producing asset inside Lukas Lundin’s Lucara Diamonds (CSE:LUC) is a vindication for Teeling of a sort, although he remains rueful that more financial support wasn’t forthcoming from the City when he needed it.
So, he used to going it alone. And that’s what he’s doing with Botswana Diamonds, the company that took on the Botswana exploration portfolio of African Diamonds once Lundin had moved in.
Some viewed the Botswana portfolio as mere flotsam and jetsam, the leftovers in Botswana's prolific Orapa district. Not so Alrosa (MCX:ALNU), by some metrics the world’s largest diamond company.
Hard for Alrosa to get a meaningful toehold in Botswana which is traditionally the backyard of another of the world’s largest diamond companies, De Beers - to the point where De Beers’ joint venture with the Botswana government is one of the mainstays of the national economy.
Even so, worth a shot, and so when it emerged that it might be possible for Alrosa to get sight of the Botswana Diamonds exploration database, which is probably worth several tens of millions of dollars and more to the point represents a good accumulated store of knowledge, they jumped at it.
Working with Alrosa has its pros and cons. Technically, Alrosa is excellent, says Teeling. On the other hand, as with any state behemoth, it can be horribly slow.
Nevertheless, as the 2016 field season opens things are moving once again.
“A Russian team is going to drill our PL260 license,” says Teeling.
“It’s very close to the Lucara ground. We got it last October and they immediately put their team on it. It’s got three kimberlites on it that De Beers discovered, all with grade, but very low grade. Their model is that the grade will improve at depth. We are targeting a Lucara lookalike.”
Lots to play for, then, and lots to pay for too. For now though, the Teeling machine looks up to the challenge. The overall programme looks likely to cost US$800,000, split evenly between Alrosa and Botswana Diamonds. Later in the year there’s likely to be another cash call, and as yet Botswana hasn’t got that one covered. But Teeling’s confident that he will.
And in the meantime, rumours are swirling about developments on another project in which Botswana Diamonds has an interest, a parcel of land in the Gope district held in joint venture with a private South African company called Brightstone, via a stake in a Botswana company called Siseko.
Talk is that Brightstone has found kimberlites on the Gope ground, which is not necessarily a surprise – kimberlites have been discovered there before, but hitherto they had been thought to be barren.
No longer. Now the talk is that they could in fact be very rich, and Brighstone is scrabbling around for cash to do delineation drilling and a bulk sample. It’s already farmed out part of its own interest to larger Botswana company BCL, but BCL is mainly into copper and, word has it, is “looking for proposals.”
So what happens now?
Botswana Diamonds is in an enviable position. It’s 15% is held via a 51% stake in Siseko, which owns 29% in the Gope ground and is free carried through to feasibility. That means there’ll be no cash call on Botswana in the immediate term, but the possibility of a serious value uplift nonetheless.
But will Teeling move on this ground and look to consolidate a further interest? Or will BCL bring someone else in instead. Botswana Diamonds has a pre-emption right and it has a strong partner in Alrosa.
Could this be the next big Teeling play? And if so, will anyone dare to be sceptical this time round?