Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Tango Mining’s Terry Tucker hails transformative deal

Tango Mining's Terry Tucker explains why the acquisition of the BK11 kimberlite project in Botswana will be transformative for the company
Tango Mining’s Terry Tucker hails transformative deal
Workers at BK11

Terry Tucker, it seems, is not a man to take his time.

In the space of less than a year he’s managed to transform Tango Mining (CVE:TGV) from virtual cash shell into a diamond producer with solid, if small-scale, revenues from an alluvial project in South Africa.

Along the way he’s picked up a solid South African operations team and several contracts for the provision of coal to big name customers including Total and Glencor.

But it’s his latest deal which really looks set to transform the fortunes of the company.

Tango has just agreed to purchase the mothballed BK11 diamond project in Botswana for US$8 mln.

The seller, Firestone Diamonds (LON:FDI), has its hands full with the development of the Liqhobong mine in Lesotho, and hasn’t been able to give the BK11 operation its full attention for some time.

With Tango it will be different - BK11 will take front and centre stage inside Tango’s portfolio, complementing but outranking in size and scale the existing alluvial operation at Oena, on the Namibian border.

It’ll good for BK11 and it’ll be good for Tango.

“We are a diamond company now,” says Tucker. “BK11 is a really important step for this company.”

And certainly to go from mining alluvials to mining a fully fledged kimberlite pipe represents a real step change.

As Tucker says, there are really only a handful of companies in the world that mine kimberlites, and for Tango to be joining their number in such short order is really quite something, especially with markets so tough.

But the opportunity on offer at BK11, as the Firestone marketing materials made clear, is “rare” indeed.

That’s because the project has already had US$45 mln spent on it, has almost all the requisite infrastructure in place, including power, has an established resource and plenty of potential for upside.

What’s more, although investors with long memories will recall that BK11 didn’t exactly set the world on fire when it was producing, Tucker reckons that when the mine comes back on stream under Tango’s management things will be very different.

“The facility that was built originally had some challenges and only 20%-30% of the diamonds were being recovered,” he says.

Tango will rectify that with the installation of an autogenous mill on site, which is expected to lift recoveries close to the 100% mark.

The effect of that is likely to transform the economics of production, although fully comprehensive modelling work is still underway.

The company is now working on an updated resource and technical report which should make the economic case for a restart at BK11 that much more compelling.

With that in mind, it’s understandable that Tucker doesn’t want to get drawn into specifics.

But he does point out that Tango’s highly experienced board would hardly have given this deal the green light if the economics were open to question.

“A low IRR project is never going to fly in this market,” he says.



View full TGV profile View Profile

Tango Mining Timeline

Related Articles

Platina team
August 15 2018
The company’s shares are trading about 6% higher intra-day, at 8.8 cents.
March 27 2018
The company completed a $10 million capital raising earlier this year.
April 10 2018
The group kicked off, in January, a 15,000m winter drill program at Rajapalot

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use