Botswana Diamonds (LON:BOD) combines three outstanding opportunities in one neatly wrapped package.
This includes exposure to the premier address for diamond exploration, namely Botswana.
There’s also something for investors with a taste for adventure in the form of higher risk projects in Zimbabwe and Cameroon.
Making it an even more intriguing proposition is the management team led by chairman John Teeling, which enjoyed success with African Diamonds.
It was African Diamonds that recognised the potential, developed, and last year sold, the AK6 kimberlite mine in Botswana, which is located close to the massive Orapa diamond mine.
The trick now will be to repeat the success with the new venture.
So far the team has failed to move the dial, though there is plenty still to play for.
Of its three kimberlites in Botswana two have failed to make the grade, while there is a question-mark over the third.
Bulk sampling at AK8 found diamonds, but not in economic quantities, while almost 1,200 tonnes of material was processed from BK5 but not a single stone was found.
The AK 9 kimberlite, meanwhile, has thrown out conflicting signals.
The micro-diamond grades were between 85 and 160 carats per hundred tonnes, while the historic macro grades were in the order of 2.5 to 3.5 CHPT.
The company will re-analyse the data before it decides how to progress, with the results expected at some point next spring.
Of particular interest is the PL07/2004 licence area in Botswana, whose northern border butts right up against the De Beers property that hosts the BK15 and BK17 kimberlites.
The company said there are indicator mineral anomalies that suggest the existence of an as yet undiscovered kimberlite in the south of the licence.
“We will start work sometime in the first quarter of 2012, possibly with percussion drilling or ground geophysics, to find it,” said Andre Fourie, Botswana’s technical director, in an interview with Proactive Investors.
In the meantime the group is submitting applications for new land around the Orapa mine.
“It is a very popular area so it’s not that easy to get ground there (around Orapa),” Fourie explained.
“We are also looking at opportunities for joint ventures.”
In Cameroon, a new diamond field is emerging in the Mobilong area in the east of the country, thanks to the work carried out by the Korean firm C&K Mining.
According to some reports the deposit contains an estimated 420 million carats – or more than three times global rough diamond production.
While this has since been dismissed as a wild exaggeration, the area remains very interesting, according to Botswana’s Fourie.
So much so the company has secured an 8,000 square kilometre licence right next to the Koreans.
The geology is not fully understood but it is thought to be a palaeo-placer deposit, similar in some ways to the Marange diamond field in Zimbabwe, host to another of the company’s prospects.
“We have put in a team of local geologists who have found similar geology to that of the CNK licenses – they have found similar conglomerate outcrops within the same sedimentary sequences.
“What we have to do now is take a bulk sample and see if there are diamonds in it and how many,” Fourie said.
The Koreans, meanwhile, do appear to be in earnest judging from the activity on the Korean licence area.
“They are busy building a mine,” said Fourie. “They are putting up plant and infrastructure.”
In Zimbabwe, the Marange discovery is one of the most exciting finds of its kind in the world.
It is what’s called a palaeo-placer deposit that is reported to have yielded an astonishing 8,000 carats per hundred tonnes in places.
However these are stones of modest quality, worth say US$20 to US$40 a carat.
That said, the sheer volume of diamonds makes the area hugely economic.
Botswana has spent the past 18 months in joint venture with local partners seeking a concession.
An application has been approved by the authorities and now awaits presidential sign off.
Of course anyone with a passing acquaintance with Zimbabwe, will know it is not the easiest place to do business.
Fourie is expecting the Zimbabwe Mining Development Corporation will take a stake of 50 per cent, leaving Botswana Diamonds and its JV partner with 25 per cent each.
“At the sort of grades being talked about, 25 per cent is more than enough. The numbers coming out of Marange are unheard of,” Fourie explained.
“We are going to have to spend some money on exploration if we do get a licence in this area - to prove what we think is there actually exists.”
However it would be a cheap operation to get up and running. “Perhaps US$10-15m could take us to the point of having a producing mine,” Fourie added.
The group also has a JV on seven claims in the Beitbridge area of Zimbabwe, where previous work has identified a 2.5 hectare diamondiferous kimberlite.
With possible grades of between four to 11 carats per hundred tonnes the group is planning an initial, modest bulk sampling programme of up to 150 tonnes.
Fourie is under no illusions the company will require a fresh infusion of funds to pursue the projects. However the payback could be enormous.
“We have licences in the best diamond address in the world, and we are obtaining more licences,” he said.
“And we have plenty of upside potential in Cameroon and Zimbabwe.
“We have a great team with an impressive track record, the diamond market looks robust for the future, and we firmly believe that we have a very exciting future ahead of us.”