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.
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.