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Gothoma Diggings plant set up at Blue Gum
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Start of mining at Blue Gum |
Etruscan Diamonds holds a mining permit over three adjacent properties in the Ventersdorp alluvial diamond district (Nooitgedacht, Hartbeestlaagte and Zwartrand properties) known as the Blue Gum Project.
Development
The Tirisano Diamond Mine, located on the Nooitgedacht property, represented the first phase of development for the Blue Gum Project. The Tirisano Diamond Mine was initially operated by Etruscan Diamonds. In May 2004, Etruscan Diamonds entered into an agreement with Mvelaphanda Exploration to facilitate the expansion of the Tirisano Diamond Mine and Mvelaphanda Exploration became the operator of the Mine. In June 2005, Mvelaphanda Exploration earned a 50% interest in the Tirisano Diamond Mine by commissioning a plant with a design capacity of 300 cubic metric tons per hour throughput and a 50/50 joint venture between Etruscan Diamonds and Mvelaphanda Exploration was formed with Mvelaphanda Exploration continuing as operator. Total diamond production from the Tirisano Diamond Mine up to the end of November 2005 when production ceased was in excess of 23,000 carats.
In October, 2007, Mvelaphanda Exploration transferred its 50% interest in the Tirisano Diamond Mine Joint Venture to Etruscan Diamonds. In 2007, Etruscan Diamonds also concluded an agreement with Mogopa Minerals (Pty) Ltd. ("Mogopa") transferring a 26% interest in the Tirisano Diamond Mine to Mogopa. Mogopa replaces Mvelaphanda Exploration as the entity providing the Black Economic Empowerment ("BEE") for the project as required by South African mineral legislation. Mogopa is also Etruscan Diamonds' BEE partner on the Hartbeestlaagte and Zwartrand properties.
Having control of the Tirisano Diamond Mine operation and surrounding Nooitgedacht property has allowed Etruscan Diamonds to consolidate the development of the diamond resources on the Nooitgedacht property with those on the adjacent Hartbeestlaagte and Zwartrand properties.
Resource
In July 2008, Etruscan Diamonds received a National Instrument 43-101 compliant independent resource update on the Blue Gum Project. The independent resource update titled "Technical Report on the Blue Gum Alluvial Diamond Project (Nooitgedacht 131, Hartbeestlaagte 146 and Zwartrand 145 properties), Ventersdorp District, the Republic of South Africa" prepared by Dr. Tania Marshall of Explorations Unlimited as of June 30, 2008 estimates that the Blue Gum Project contains 25.5 million cubic meters of indicated diamond resource and 15.3 million cubic meters of inferred diamond resources as follows:
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Indicated Resources
(Million m3) |
Inferred Resource
(Million m3) |
Grade
(ct/100m3) |
Value
(USD/ct) |
| Upper Gravel Package |
16.109 |
8.613 |
1.77 |
606 |
| Lower Gravel Package |
11.801 |
6.744 |
2.85 |
606 |
| Depleted by mining |
(2.365) |
(.023) |
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| TOTAL |
25.545 |
15.334 |
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606 |
Production
During the first quarter of 2008, Etruscan Diamonds recommenced mining and processing operations at the Tirisano Diamond Mine. The gravel from the mine was being processed at the Tirisano DMS (dense media separation) plant and through four 16 foot pans installed near the DMS plant. The objective was to achieve a monthly throughput of 100,000 cubic meters of gravel per month from the two facilities with 40,000 cubic meters coming from the DMS plant and 60,000 cubic meters from the pan plant.
Etruscan Diamonds continued to make progress ramping up processing operations at the Blue Gum Diamond Project during the second and third quarters of 2008. However, the ramp up was negatively impacted by the global economic crisis which resulted in a reduction in both the demand for rough diamonds and the rough diamond price. In an effort to reduce costs, during the month of November, Etruscan Diamonds scaled back staff and operations at Blue Gum to process 60,000 cubic meters per month through the pan plants only and suspended processing at the DMS plant. Due to uncertainty in the timing of the recovery of the price and demand for rough diamonds, subsequent to November 30, 2008, Etruscan Diamonds reduced the work force at the Blue Gum Project to a skeleton staff to allow the Project to be placed on care and maintenance. The Blue Gum Project remains on care and maintenance.
Production for the year ended November 30, 2008 was approximately 483,000 cubic meters yielding 12,600 carats for an overall grade of 2.61 carats per hundred cubic meters and a rough tender average value of US$512 per carat.
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