31st Mar 2008 07:01
Mwana Africa PLC31 March 2008 46% Increase in Diamond Value and 68% Improvement in Grade from Klipspringer Settlement of SouthernEra outstanding Tax Liability London, 31 March 2008 - Mwana Africa ("Mwana"), the pan-African resourcecompany, is pleased to announce that its sale of the February production fromKlipspringer realised a value of $121/carat which represents a 46% increase overthe average price in 2003 when the mine was last in production. To date in 2008a total of 6057 carats have been sold including an 8 carat stone valued at $4000 / carat. In addition, Mwana is pleased to announce the settlement of the outstanding taxliability arising from the South African diamond operations of SouthernEra. Following the announcement in December 2007 that Klipspringer Mine was going tobe brought back into production the early results in 2008 have been veryencouraging. Along with the increase in diamond value there has been asignificant improvement in the recovered grade in 2008. Since the recommencementof operations in January 2008 Klipspringer has treated 6302 tonnes of ore andrecovered 4002.35 carats of diamonds, giving an average grade of 63.5 cpht. Thiscompares with the grade prior to closure of 38cpht. The improvement in grade isa direct result of the re-engineering that has taken place at the operation. Inlate 2006 and throughout 2007 Klipspringer has been trial mining with the moreconventional fissure mining method of underhand stoping which has replaced thelong hole open stoping method employed previously. Although not as productivefrom a tonnage perspective the underhand method allows for good geologicalcontrol which has minimised the dilution and resulted in the 68% improvement inthe run of mine grade. The revised mine plan was designed to ensure a sustainable operation in a strongrand environment (1$(US) = 6.80ZAR) and the mine is expected to produce90,000cts per annum at full production which Mwana believes can be achieved by the end of Q1 2009 and capex is expected to be less than US$1m. Mwana holds a 61% interest in the project and is responsible for management andoperation of the mine. Kalaa Mpinga, CEO of Mwana Africa, commented, "This is a small but importantstep in the strategy of Mwana to add diamond production to our multi commodityportfolio. Rough diamond prices are currently very strong and this augurs wellfor Klipspringer and our potential alluvial diamond operations in the DemocraticRepublic of Congo." Mr. Uwe Naeher, Professional Geologist and SouthernEra's Western ExplorationManager, is the qualified person, under NI 43-101, responsible for the technicalinformation in this release. Mr. Naeher has reviewed the contents of thisrelease. Enquiries:Kalaa Mpinga, Chief Executive Officer Tel: 020 7654 5588Mwana Africa plc Tom Randell / Anca Spiridon Tel: 020 7653 6620Merlin Mike Jones / Ryan Gaffney Tel: 020 7050 6500 Canaccord Adams Some statements contained in this news release are forward-looking and,therefore, involve uncertainties or risks that could cause actual results todiffer materially. Such forward-looking statements include comments regardingexploration work. Actual results could differ materially from those anticipated.The Company disclaims any obligation to update forward-looking statements. Notes to Editors The Klipspringer Diamond Mine is located in South Africa and is a joint venturebetween Mwana (61%) and Naka Diamond Mining (Pty) Ltd ("Naka") a Black EconomicEmpowerment company (39%),. The development of the Klipspringer Diamond Mine commenced in 2001 with theconstruction of a decline down to 7 level (160m) and it was in full productionby February 2003. In December 2003 the joint venture partners, made a decisionto temporarily suspend the mining operations at the Klipspringer Joint Venture.This was due to the strength of the South African Rand. The joint venture'soperating costs were in Rands, while the diamond revenue was denominated in USDollars and this resulted in the operation being unprofitable. During the third quarter of 2006 and throughout 2007 a trial mining and bulksampling exercise was undertaken to try a new mining method and test marketconditions. The mining method was changed to a more conventional underhandstoping method as opposed to the long hole open stoping method used in theinitial mine design. The mine was re-engineered with the new mining methodresulting in reduced tonnage along with a significant reduction in manpower andcosts but designed to operate in a strong Rand environment. The trial miningprogramme was operated successfully and a decision was made to commencecommercial production in December 2007. The results of underground mining and development on the Leopard Fissure haveshown that the kimberlite is continuous and consistent mineralogically to atleast No.7 level. Due to improved grade control measures introduced during thetrial mining phase, dilution from external sources was reduced and resulted inan improvement in the mining grade. These improvements are reflected in theupdated resource statement dated 31 December 2007 tabled below. Resource Category Mining Tonnes Mining Grade (cpht) Block Carats-------------------- ----------- ---------- -----------Indicated Resources-------------------- ----------- ---------- ----------- Ingwe Section 450,000 58.3 262,000-------------------- ----------- ---------- ----------- Ndau Section 308,000 58.3 180,000-------------------- ----------- ---------- ----------- Total 758,000 58.3 442,000 -------------------- ----------- ---------- ----------- Inferred Resources-------------------- ----------- ---------- ----------- Ingwe Section 1,306,000 58.3 762,000-------------------- ----------- ---------- ----------- Ndau Section 2,058,000 58.3 1,200,000-------------------- ----------- ---------- ----------- Total 3,364,000 58.3 1,962,000 -------------------- ----------- ---------- ----------- At full production the mine plans to produce approximately 90 000 carats perannum. There will be a gradual increase in production during 2008 through toMarch 2009 when steady state production levels are envisaged. At theseproduction rates the mine will have a life of approximately 5 years to a depthof 160m below surface (7 Level). The inferred resource below 7 Level to a depthof 500m below surface (15 Level) will provide for an additional 20 years oflife. A number of alternatives to access the orebody between 7 and 15 level arecurrently being reviewed. The resource is open to depth below 15 level and astrategy to define additional resources will be investigated in due course. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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