Botswana Diamond Mine operational by 2008

De Beers AK6 kimberlite deposit could become Botswanas first new mine in 26 years by 2008. At the Capital Resources Botswana Resource Sector Conference, John Teeling, executive chairman of African Diamonds, said the capital cost would be between $60 million and $100 million. At full production, the mine would produce up to 1.5 million carats a year. The mine would be the first since the Jwaneng mine became fully operational in 1982.

Teeling said there are still a number of issues to be addressed, including the governments equity participation in the project. Once the project reaches a bankable feasibility study stage, African Diamonds will hold a 30 percent share while De Beers share will rise to 70 percent. The ownership of De Beers other Botswana mines, is jointly held with the government through its 50/50 Debswana entity. De Beers marketing arm, the Diamond Trading Company (DTC), has valued 10,486 diamonds, weighing 689 carats, recovered from AK6 at an average of $150 per carat. The valuation is considerably above the original $138 per carat estimate.

Teeling said, "The AK6 kimberlite is an interesting volcano. Born over 90 million years ago in a massive eruption, drilling is slowly revealing its secrets. The deposit continues to provide encouraging news and offers significant upside and is clearly bigger than previously estimated. The joint venture is moving as rapidly as possible toward a feasibility study and an early mining lease application now seems likely."