South Africa: Vutomi Venture

Opportunity

The Vutomi deal was entered into because of the confluence of:

  • Perceptions of high risk and barriers for entry for South Africa;
  • An historic legacy of South Africa having been the domain of De Beers, which has shifted its exploration focus elsewhere in the world over the last 10 years;
  • Limited competition for exploration ground in consequence to these points; and
  • The latest (3rd generation) diamond exploration technologies not having been applied in South Africa

And the oversight of:

  • Sophisticated fixed and banking infrastructures which exist in South Africa; and
  • A long history of diamond production in the country, which produces in excess of US$1 billion of gems per year (+/-10% of global supply)

An entrepreneurial team, with strong commercial, financial and technical competencies along with sound local ownership, has identified the above gaps and delivered a significant package of highly prospective ground.

Deal

The structure of the deal was as follows

  • BOD will offer a total of 100 million shares and £942,000 in cash to acquire 72% of Vutomi structured     as  follows
  • Option Fee on signature: £61,000 in shares (3.2 million) and £61,000 cash (at a share price of 1.9 pence)
  • Phase 1 (12 months): spend £215,000 to earn 15% of Vutomi
  • Phase 2 (12 months): spend £366,000 to earn a further 25% of Vutomi
  • Phase 3 within 90 days of the completion of Phase 2: the balance in BOD shares (96.8 million), and settle Vutomi’s shareholders loan accounts of c.£300,000 in cash to earn a further 32% of Vutomi

 

Flagship Project – Frischgewaagt

The Marsfontein blow was 0.4Ha in size, produced 1.9M carats with an average grade of 172cpht and diamond value of $128/ct (BCOS +1.2mm).  The return on the $25M investment was achieved in 4 days. The mine was operated by a De Beers / SouthernEra JV.

Current Marsfontein Pit

The Klipspringer Mine owned by ASA Mining plc is currently on care and maintenance and has an Inferred Resource of 3.4M tonnes and an Indicated Resource of 0.7M tonnes, both with a grade of 49cpht and diamond value of $130/ct (BCOS +1mm).

 

Exploration results

  • Ground magnetic surveys have identified a number of dipole anomalies on Frischgewaagt
  • A strike length of 1.2km of the >4km kimberlite dyke/blow system is currently being assessed.  The drill results indicate a high degree of continuity of the system with inclined percussion drill intersections of between 1-17m
  • 467 Stones were collected in bulk sampling, yielding 247 carats at an average of US$180 per carat in 2015 (BCOS of +2mm).  This gave a modelled revenue of US$259 per carat (BCOS of +2mm) in 2016

Diamonds from Frischgewaagt

  • Percussion and core drilling in progress to firm-up on geological model and provide sufficient sample for microdiamond analysis

Percussion drilling in progress

 

Core drilling in progress

Kimberlite core in granite basement

 

Blue Sky Potential and Balanced Project Pipeline

The Vutomi deal also offers blue sky potential and a balanced project pipeline:

  • 20 high-interest kimberlites already identified on the various prospecting rights
  • 10 prospecting rights encompassing nearly 50,000 hectares of highly prospective ground
  • A portfolio of highly prospective multi-stage exploration projects in the locality of current flagship or historic diamond mines
  • Good potential for further discoveries due to technology advancements

Summary

  • Marsfontein & Klipspringer diamond mine area:

    • Frischgewaagt & Hartebeesfontein – a pipe and fissure system

  • The Oaks diamond mine area:

    • Springbokvallei – a dipole anomaly

  • Premier / Cullinan diamond mine area:

    • Palmietgat – a pipe and fissure system

  • Helam diamond mine area:

    • Ontevreden – a known pipe

  • Kimberley, Jagersfontein & Koffiefontein diamond mine area:

    • Free State: 6 contiguous prospecting areas with a number of known pipes and known historic operations

THIS PAGE WAS LAST UPDATED ON 11 JULY 2017
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