MARINE: Shining Start For Afri-Can
Recent Western Cape Business News
AFRI-CAN Marine Minerals Corporation, which could re-ignite Cape investors long-standing romance with marine diamond mining when it lists on the JSE later this year, has completed some very encouraging survey work.
Last month Afri-Can completed its geophysical survey on its Exclusive Prospecting Licence (EPL) 3403 marine diamond concession in Namibia – the concession area that lies tantalisingly close to De Beers Marine’s famously rich Atlantic One mining area.
The company reported that the geophysical survey covered 1 251 line-kilometres over an area of 90 square kilometres in the south end of EPL 3403 (see map).
The survey included Depositional Areas 1, 2 and 3 already delineated by previous sampling programs, and data was consistently of “very high resolution and quality”.
While Afri-Can is still some way off mining the potentially lucrative EPL 3403, the survey work is a very encouraging first step in working towards production.
Afri-Can CEO Pierre Levielle says the encouraging sampling data should enable Afri-Can to develop cross-section maps and three-dimensional models of the Depositional Areas.
Basically the geology, morphology and stratigraphy of the south end of EPL 3403 will be analysed in preparation for the Afri-Can’s second sampling phase. The goal of the geophysical survey and second sampling phase will be to start delineating resources on Depositional Areas 1 and 2 in anticipation of trial mining.
Levielle says interpretation and analysis of the geophysical survey data are expected to take about one month.
EPL 3403 covers around 800 square kilometres and is adjacent to and contiguous with the famous De Beers Marine mining area, which currently produces more than 1.1m carats per year.
Early sampling efforts have already shown evidence that EPL 3403 holds the same diamond size and quality as its adjacent neighbour (where the diamond resource exceeds 100 million carats!).
Previous sampling by Afri-Can and IMDH in 2011 already recovered 117 diamonds. The four largest diamonds were of 2.69 carats, 1.76 carats, 1.60 carats and 1.30 carats with several stones weighing over 0.50 carats.
With such promising exploratory hauls, observers will be wondering how quickly Afri-Can can turn to commercial mining. But old salts in the marine mining industry will confirm that moving into a production phase can sometimes take longer than expected (for a variety of reasons). Readers may remember Benguela Concessions, a market darling which (consistently) failed to deliver on its early promise and was eventually bought out by Trans Hex Group, which has since seemingly abandoned its marine mining ambitions.
The general expectation, however, is that Afri-Can should start commercial mining by mid-2013. Estimates are that Afri-Can could deliver annual production of between 100 000 carats to 200 000 carats in the short-term, with some reports suggesting longer term production patterns could yield as much as 300 000 carats a year. These are solid production numbers that would make Afri-Can a very profitable junior mining venture.
Annual production of anything above 100 000 carats would put Afri-Can into the same league as Ocean Diamond Mining Holdings (ODM) and Namibian Minerals Corporation (Namco) in their early production phases during the late nineties and early noughties. (Readers, of course, may recall that the latter acquired the former from under Trans Hex Group’s nose, and then proceeded to go spectacularly belly up before being acquired by diamond magnate Lev Leviev).
Afri-Can’s production prospects are hitched to specialist marine mining group International Mining and Dredging Company (IMDH).
IMDH, which holds a strategic stake in Afri-Can, has mined successfully in Namibia for 15 years – including, significantly, six years work on the Atlantic One deposit.
The real potential of Afri-Can’s production from EPL 3403 will probably be best gauged if its application for a JSE listing is accompanied by a fund raising exercise. The identity of local backers could be highly revealing.
Rumour is that Afri-Can could be looking to raise some $3 million (around R25 million) by listing on the JSE.
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