BlueRock Diamonds has signed an agreement with Koedonza Olives CC to mine the 1.5ha Jubilee kimberlite pipe in Windsorton, 40km north of Kimberley in the Northern Cape region of South Africa.
To analyse the commercial viability of the Jubilee site, the first step will be to ensure a bulk sample of up to 2,500t. This work is expected to commence within six months of the granting of a mining permit.
Koedonza is planning to apply for mining permit within the next few weeks.
Kimberlite ore will be transported to BlueRock’s processing plant at the company’s existing Kareevlei Mine for processing.
The intention of this work will be to determine the likely grade and quality of any diamonds extracted from Jubilee. If the results of the sample turn out to be positive, BlueRock will have the option to extend the agreement terms for the mining permit's duration, which could be up to five years plus extensions.
BlueRock will be responsible for all costs for bulk sampling and any future mining.
Revenue from diamond sales will be shared between BlueRock and Koedonza 90/10 split respectively.
BlueRock can also retain 100% of diamond sales revenue during bulk sampling phase until costs for both this operation and processing have been recovered. Any future sales during this phase will be equally shared by both firms.
Two years ago, some limited mining of Jubilee was conducted by alluvial miners. This mining activity was carried out on a very small surface area of the pipe and to a depth of less than 5m, recovering a 24 carat stone. However, no drilling or detailed evaluation was done on Jubilee later.
BlueRock CEO Adam Waugh said: “Following recent good progress at the Kareevlei mine and the strategic decision to consider potential value enhancing opportunities it is very pleasing to be able to announce the bulk sampling agreement with Koedonza.
“Jubilee has had very limited work carried out in the past but the fact that a 24 carat diamond of gem quality has previously been recovered from the site has encouraged us to go forward with a bulk sampling exercise.
“Under the bulk sampling agreement, we would expect to extract 2,500t of ore at an expected cost of approximately R750,000 with the upside of diamond sales.
“This is a relatively low-cost, low-risk way of extending our operations.”