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Send  Share  RSS  Twitter  12 Nov 2012

SEA DIAMONDS: Afri-Can Floats Its Boat

 



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SEA GEM hunter Afri-Can Marine Minerals Corporation (Afri-Can) recently took a major step towards scouring a promising deposit off the Namibian coast after closing the last of its fund raising exercises.

In late August Afri-Can closed the third and final tranche of $1m (R7.5m) of the brokered private share placement arrangement launched in April this year.

The placement was done through Cape Town asset management house Trinity Assets Management International – which specialises in resource company investments.

There also seems to be some early enthusiasm for the endeavours of Afri-Can, which intends listing on the JSE shortly, with another R2.2m worth of shares placed through a non-brokered private placement.

This means Afri-Can has managed to raise a not insubstantial R28.5m in pre-listing share placement exercises.

The initial froth around Afri-Can has been generated by its EPL 3403 concession which is located adjacent to De Beers Marine’s famous Atlantic One deposit.

EPL 3403 covers approximately 800 square kilometres and is adjacent to and north of the Atlantic One.

Atlantic One is regarded as the largest marine diamond deposit in the world and currently produces in excess of 1.1 million carats a year.

In a recent update to shareholders Afri-Can CEO Pierre Léveillé said geophysical survey analysis and interpretation at EPL 3403 were well advanced.

He said the high quality and resolution of the data would enable modelling of the geology and morphology of the south end of EPL 3403 in greater detail than previously planned.

This is expected to lead to improved preparation and planning for the second sampling programme and for eventual trial mining to follow.”

Léveillé said that with the closing of the financing, Afri-Can was now in a position to negotiate a charter agreement for the vessel, MV DP The Explorer, in order to carry out the second sampling program.

He said the second sampling would focus on previously identified diamondiferous depositional areas.

Planning of the programme is currently underway and will be disclosed in due course.”

Previous sampling programmes by Afri-Can and operational partner, IMDH, in EPL 3403 recovered 117 diamonds. The largest stones weighed 2.69, 1.70 and 1.60 carats.

But more importantly three diamondiferous depositional areas were delineated, two of which showed an average diamond size of over 0.50 carats per stone. This matches the average size recovered in Atlantic One.

Of course, the proof of the pudding is in production. To date, there has been no official utterances from Afri-Can around annual production targets – although figures of between 100 000 carats to 150 000 carats have been bandied around in the specialist media.

CBN was most fascinated by research from RB Milestone Group, which pencilled in a ‘low’ production scenario of 164 000 carats and a ‘high’ scenario of 203 000 carats.

Taking a price of $350/carat and a production of 194 000 carats a year, RB Milestone pencilled in operating profits of $32m – which would equate to around R240m at current exchange rates.


 
 
 
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