We are exploring for new economic diamond deposits in Botswana, which we consider to be the world’s best address for diamond exploration, due to its geological prospectivity, its low risk profile, its quality infrastructure and highly skilled workforce.
Botswana is the world’s second largest diamond producer by value and host to two of the world’s biggest diamond mines, Orapa and Jwaneng.
Given the low success rate of diamond exploration (estimated to be less than 1%), we do not allocate material resources to our programme. However, by maintaining a focused approach, we are able to make good progress with prospective targets.
Apart from a highly focused, ongoing exploration programme for new kimberlite discoveries, there also exists the opportunity to re-evaluate existing kimberlites with respect to size, grade and diamond bearing potential.
We are evaluating prospective targets, including kimberlite KX36, from our 100% held exploration holdings through Petra Diamonds Botswana.
FY 2016 saw a shift to a more focused, strategic exploration approach. This was reflected in the Company’s exploration spend (excluding depreciation) decreasing from US$5.6 million in FY 2015 to US$2.7 million in FY 2016 and a budgeted spend of ca. US$1 million for FY 2017. Petra incurred US$0.3 million of exploration expenditure in H1 FY 2017.
Our current project landholding is largely within the Central Kalahari Region. These areas are predominantly covered by tertiary sediments of Kalahari sand cover, ranging in thickness from almost 30 metres in the South, to a maximum of 120 metres in the Eastern part of the Central Kalahari Game Reserve (“CKGR”). The pre-Kalahari geology is relatively consistent, wholly covered by the Stormberg flood basalts of the Karoo Supergroup. Beneath the basalt lies the sedimentary sequence of the Karoo Supergroup (Lebung, Beaufort, Ecca and Dwyka Groups). In the Kokong area, the Kalahari sediments unconformably overlie the Karoo Supergroup sediments and pre-Karoo basement rocks towards the east.
The precise thickness of the basalt in the CKGR is unknown, but it is evident from the Government of Botswana’s aeromagnetic survey data that the basalt is heavily faulted and its thickness varies considerably from area to area, thus making the area structurally complex. Major geological faults seem to have a North-West – South-East and North-East – South-West orientation. These major structures are the main targets in kimberlite exploration as they are zones of structural weakness where kimberlites may be emplaced.
In Botswana, Petra has focused on evaluating all exploration information relating to the KX36 project and to the other licences currently held by the Company.
38 diamond drill holes and 15 large diameter fluid reverse circulation holes have been drilled under the KX36 licence into the kimberlite pipe to establish the internal geology and estimate diamond grade. Microdiamond analysis (MiDA) on drill core has recovered 837 stones from 1,088 kg. Processing of the LDD samples at Kimberley (Phase 1) and at KX36 (Phase 2), including 24 tonnes of representative diamond drill core sample in Phase 2, has recovered 1,130 carats from 3,093 tonnes.
A resource estimate of 24.6Mt at 35.8cpht and $65/carat at a +3 DTC diamond sieve bottom cut, to a depth of 445m below surface has been generated for KX36.
The processing of 24 tonnes of diamond drill core gave a recovered grade of 48 cpht at a 1mm bottom cut, and indicated a significantly coarser diamond size frequency distribution than that obtained from the 2 phases of LDD sampling.
Recent modelling of all diamond sampling data, in conjunction with an analysis of the drilling and processing methods and procedures, suggest that the current KX36 grade and value derived from LDD samples may be underestimated due to diamond breakage.
A prefeasibility study into the development of KX36 is currently underway, comparing conventional and innovative underwater flooded open pit mining methods. First pass conceptual economic assessments indicate favourable key economic NPV/IRR indicators, based on the recent grade and diamond price modelling.
The excavation and processing of a minimum 10,000 tonne representative bulk sample is being investigated, with the aim of providing a confident estimate of grade and value, which will be used in a definitive feasibility study into the development of KX36.
Petra holds nine additional prospecting licences in the Orapa south west area and surrounding KX36 in the CKGR, where a number of high interest geophysical targets have been identified. Ground follow-up work programmes have been compiled and a budget generated to assess the targets identified. Work is planned to be done on a low key basis so as to fit in with the revised budget constraints.
In South Africa, Petra’s focus is the investigation of the Reivilo kimberlite, which is situated approximately 110 kilometres north-east of the Finsch mine. Drilling of the kimberlite bodies delineated by surface geophysics in 2016 commenced during November 2016, and finished in January 2017. Drilling confirmed the downward continuation of the kimberlites, as well as verifying the thickness of calcrete cover. Core from the kimberlite intersections will now be assessed and sampled for kimberlite indicator minerals (“KIM”) to confirm the highly encouraging KIM signature obtained from surface soil sampling over the kimberlite bodies. This will be followed by microdiamond sampling for a preliminary grade estimate, should the KIM sampling of the drillcore prove to be positive.