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DIAMONDS
March 2015
MODERN MINING
29
Loading ore into the
Tongo plant as part of bulk
sampling operations.
coming year if the necessary funding can be
raised. “This is a smaller deposit than Baoulé
but it is a high-grade, high-value resource – by
which I mean 165 cpht and US$145 to 270 per
carat – which can be mined from surface for
three years, with the operation transitioning
gradually into an underground mine starting
from year two,” he states. “The life of mine is
16 years and over this period we would expect
to produce nearly a million carats with the peak
production – starting in year 8 – being about
90 000 carats a year generating approximately
US$40 million a year. The capex is very low at
around US$16 million for the first three years of
operation, and we hope to secure the majority
of this through debt funding.”
Smithson describes Tongo Dyke-1 as being
somewhat similar – geologically – to Petra’s
Helam fissure mine near Swartruggens in South
Africa. “Helam is now mining at about 700 m
below surface whereas we’ll be starting with a
surface operation, which will be relatively low-
cost in nature and should deliver 120 000 carats
over three years,” he adds.
Stellar has completed an economic scop-
ing study for the project and is currently well
advanced with a feasibility study which it is
undertaking in conjunction with Paradigm
Project Management (PPM) of Johannesburg.
PPM has also been responsible for a surface
mining study. Explaining the reason for this,
Smithson says it was originally envisaged that
Tongo Dyke-1 would be developed entirely as
an underground operation, with the 300 m shaft
and associated infrastructure required taking
up to two years to develop before first produc-
tion and first cash flow. “We decided to look at
options to accelerate production and bring cash
flow forward, hence the appointment of PPM,
which has huge experience in the diamond
mining field.”
Based on the results of the study, bench stope
mining from surface to 40 m depth has been
selected as the most appropriate and attrac-
tive mining method. The plan is to have three
pits of 500 m length spread across the 2 000 m
strike length. Each pit has two stope faces being
mined in different directions, with the stope
width being 1,5 m, the face height 2,5 m and
the face length 5 m. Ore will be extracted by
a winch and rail-mounted mechanical 1-ton
kibble. Comments Smithson: “This is an inno-
vative approach which will allow multiple
working faces with all that this implies in terms
of providing us with maximum flexibility in
maintaining production levels.”
Smithson points out that the Tongo Dyke-1
project has plenty of upside given that Dyke 1 is
just one of four diamondiferous orebodies (the
others, not surprisingly, are labelled Dykes 2 to
4). “Our current JORC-compliant resource of
1,45 million carats is entirely based on Dyke 1
so clearly there is potential for it to grow as our
exploration of the other orebodies continues,”
he says. “In addition, at Dyke 1 the orebody
has only been defined to a depth of 300 m and
resources beyond this point could extend the
life of mine.”
On the subject of Ebola, Smithson says that
it has impacted the Tongo project more than
Baoulé. “Guinea has been less affected by the
Ebola outbreak than its neighbours and we
have had no hold ups at Baoulé,” he observes.
“Tongo, by contrast, is located in an area of
Sierra Leone which was badly affected by the
epidemic and our site has been on lockdown
at times. But the worst of the crisis has now
passed and we don’t see Ebola as an obstacle to
our operations as we move forward.”
Finally, and discussing Sierra Leone and
Guinea (which share a common border) as a
mining destination, Smithson says his own
experience of the region goes back 15 years and
that it has never been more politically stable
than at present. “When we started working in
this region, it was highly volatile. But Sierra
Leone has now enjoyed around 12 or 13 years
of peace and has become a surprisingly robust
democracy – it’s had three successive elections
which were generally regarded as free and fair.
The story in Guinea is perhaps more mixed
with the political scene being quite turbulent
at times but certainly the country is in better
shape than it was during the days of mili-
tary dictatorship. Overall, we believe that the
future looks pretty good for Sierra Leone and
Guinea and that conditions are now ripe for the
region’s mineral wealth to be effectively and
sustainably developed.”
“... the worst of
the crisis has now
passed and we
don’t see Ebola as
an obstacle to our
operations as we
move forward.”
Karl Smithson, CEO,
Stellar Diamonds