Wouterspan Project Location
The Wouterspan Property is located near Douglas, South Africa. It comprises portions, totalling 7,409.4 hectares, of the Lanyon Vale 376 farm. Historically, mining operations were carried out on three portions of the property called the Farhom, Okapi, and Stofdraai farms, exploiting the Rooikoppie and Primary gravel.
A Preliminary Economic Assessment (“PEA”) showing viable project economics was completed on the Wouterspan property in 2013. The PEA was carried out by a team led by Dr Kurt Petersen, an expert diamond metallurgist, and Walter Bold PrEng, Rockwell’s Group Engineer, with significant input from Paradigm Project Management (“PPM”), a company with a strong track record in the innovative development of new diamond mines.
The study indicated positive economics, sufficient to take the project to the detailed design stage. The economic model yielded an internal rate of return of between 45% and 70% for a range of scenarios based on the key inputs. The net present value (“NPV”) for the base case is $91.71 million at a 15% discount rate, yielding a project payback period of 2.3 years from the start of construction or approximately 1.3 years from commencement of production.
The project is most sensitive to revenue. A 5% variance in the total revenue over the 10 year life of mine impacts the NPV by 15%. The operation is expected to employ 300 people.
Key assumptions of the study were as follows:
• A plant with a capacity of 1,200 tonnes per hour (“tph”) (or 354,000m3 per month), a rate that lowers the diamond production risk associated with the inherent variability of the resource being mined;
• A plant design comprising three processing streams: two Bourevestnik Bulk X-ray systems to handle the coarse and mid-sized gravels; and the third stream being a dense media separation (“DMS”) stream to process fine material;
• A reduced water consumption rate that is suited to the environmental conditions in the Middle Orange River region; and
• The use of contract mining at a fixed unit cost that reduces the capital requirements.
The Company continues to review various options to bring the Wouterspan property to account. The preference is a phased approach, commencing at 150,000m3 with the timing dependent on the availability of funding.
Geological setting and mineralization
The geological setting of Wouterspan is an alluvial diamond deposit preserved in fluvial-alluvial palaeochannel and deflation gravels (Rooikoppie) in Vaal River terraces. The property has extensive diamond deposits and has historically produced diamonds that are similar to Saxendrift in terms of size, quality and value.
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