South Africa: Diamond Production Down at Trans Hex Mine
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Business Day (Johannesburg)
17 July 2008
Posted to the web 17 July 2008
Charlotte Mathews
Johannesburg
PRODUCTION has resumed at Trans Hex's 32%-held Fucauma diamond mine in Angola at the rate of 3000 carats a month after a two-month closure while a new management agreement was negotiated.
However, production of 3000 carats a month, or 36000 carats a year, is below the 41800 carats produced in the year to March and considerably less than the 73000 carats the mine produced last year .
Trans Hex (TSX) company secretary George Zacharias said yesterday production had been declining at Fucauma for several reasons, mainly the unavailability of earth-moving equipment, but also a lack of exploration around the mine.
Since Trans Hex took over operational responsibility for the mine, it had recapitalised the earth-moving fleet at a cost of about $8m and was looking at different ways to return production to 73000 carats a year or more, he said.
Trans Hex also said it had decided not to pursue a joint venture with Kimberley Consolidated Mining (KCM) to develop the Carter block concessions in Northern Cape because "the project's potential was unlikely to meet the group's exploration criteria and expectations".
Zacharias said Trans Hex needed to prioritise its exploration projects. After looking at the cost of bulk sampling in the Carter block, Trans Hex decided it was not worth pursuing .
"Diamonds can be present but it does not mean the project is economically viable," he said.
Trans Hex was the second partner for KCM on the project, after its original partner, Tawana Resources, withdrew by mutual agreement.
KCM CEO Hein le Riche said the mineral chemistry of the kimberlite pipe on the Carter block was showing results far superior to that of some of SA's biggest diamond mines.
"The pipe is definitely diamondiferous," he said.
KCM was waiting for permission from the minerals and energy department, which it hoped to secure by the end of this month, to transport about 500 tons of kimberlite material to a washing plant in Kimberley. Once preliminary results were available, which should be by the end of next month, and they had been verified by consultants Venmyn, KCM would release them to the market, he said.
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Trans Hex said it had sold 11823 carats of diamonds this month at an average price of $1426/carat, generating $17 million in revenue. Rough diamond prices had strengthened this year, particularly for the types of stones Trans Hex produced.
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