Tsodilo Resources Ltd (CVE:TSD) is making sparkling progress as it continues to investigate the potential of the B16 kimberlite diamond project in Botswana, which it reckons could be a high-value diamond producer like the Karowe mine on the AK6 kimberlite.
That mine (Karowe) is operated by Lucara Diamond Corp and has been in production since 2012 and is one of worlds' foremost producers of large, Type IIA diamonds in excess of 10.8 carats.
Its gems have included the 813 carat Constellation stone, which was sold for a record US$63.1 million.
What is Tsodilo Resources?
The company holds diamond and metal licenses in Botswana and South Africa, but the focus is the BK16 project.
The company has a prospecting licence over the BK16 kimberlite, a prospect located within the famous Orapa kimberlite cluster, one of the most prolific diamond-producing areas in the world.
BK16 is 37 kilometres south of Orapa itself, 25 kilometres south of the Damshtaa mine, and 13 kilometres north-northeast of the Letlhakane mine, all operated by the jointly-owned
Botswana—De Beers local champion Debswana.
Lucara’s Karowe mine is 28 kilometres east-northeast.
Tsodilo's confidence in the kimberlite was bolstered when last month, it unveiled the latest grade and valuation analysis from its recovered parcel of diamonds.
It said analysis showed that the project merits further work.
To be precise, Tsodilo has recovered 502 commercial-size (greater than one millimetre) diamonds from three parcels, which were recovered from large diameter drilling (LDD) from four kimberlite units in the Orapa field, while the total number of carats has been weighed at 77.94.
The modelled average price ranged from a high of US$710 to US$386 per carat, the company said.
The five highest diamonds by value ranged from 0.965 carats to 1.935 carats with a total weight of 7.22 carats and have an average price valuation of US$612.85 per carat, the firm added.
Parcel 1 (94 stones, 17.045 carats) gave a value of US$ 195.45. Parcel 2 (130 stones, 17.700 carats) gave a value of US$ 196.37, while parcel 3 (278 stones, 43.195 carats) gave a value of US$ 161.03. The average current market value of all the diamonds was US$ 176.44 per carat.
The company revealed that 3.8% of the diamonds tested were identified as Type IIa diamonds (the purest and most valued) consisting mainly of D colour stones.
The size frequency distribution (SFD) study demonstrated the presence of large stones, indicating that 8.0% may be greater than 10.8 carats, and 0.5% could be greater than 100 carats.
Significantly, a phase 2 bulk sampling is now being planned, Tsodilo told investors.
Michiel de Wit, Tsodilo's president and chief operating officer (COO), said: "The promising modelled SFD grade and value indicates that BK16 deserves further work because BK16 could also be a high-value diamond producer like AK6 (Karowe mine)."
Dense Media Separation Plant
The company's 10 tonnes per hour mobile Dense Medium Separation (DMS) plant is used for the bulk sampling programme. The DMS plant has a scrubber with a trommel screen of 16 mm, a primary jaw crusher that has a closed size setting of ~25 mm and a secondary cone crusher that has a closed size setting of 10 mm.
This adds considerably to the company’s in-country capabilities, and has already delivered significant samples.
Around US$4.5mln was allocated to the initial sampling programme, now complete. Further work is likely to continue for the next couple of years, to the point where a NI43-101 can be prepared.
Metals exploration portfolio adds further value
Tsodilo also has a 100% stake in its Gcwihaba project area consisting of seven metal prospecting licenses all located in the North-West district of Botswana. These consist of base metals, precious metals, and rare earths.
Additionally, Tsodilo has a 70% stake in Idada Trading 361 (Pty) Limited which holds the gold and silver exploration license in the Barberton area of South Africa.
Strong backing from experienced mining investors
Key names on the Tsodilo register include JP Morgan, First Quantum Minerals, Lucara Diamond Corp, and the IFC.
This is a pretty blue-chip list and should provide investors with comfort that several rounds of due diligence by high profile organisations has been completed.