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RAPAPORT... Botswana Diamonds reported a loss of $221,000 (GBP 149,000) for the six months that ended on December 31, which was down from a loss of $350,000 (GBP 235,000) one year earlier. The company's chairman, John Teeling, told shareholders that he was pleased to report good progress on the company's licenses despite "a resources world filled with gloom." Botswana Diamonds' staff, along with eight geological engineers from ALROSA are completing the second phase of exploration on three joint venture blocks in the Orapa area. Work is focusing on areas that were identified in a 2014 exploration campaign and Teeling anticipates that results of this effort will be available in the middle of the year. "The diamond industry glistens in a resource sector depressed by weak demand. There is a clear supply-demand gap opening. Demand for gem-quality stones in Asia, the Middle East and parts of Africa is growing due to an emerging middle class," Teeling stated. "The forecast (Northland Capital Partners’ report) demand-supply gap begins in 2017, and by 2023 it could be as much as 100 million carats a year or as low as 34 million carats a year. The strong demand for diamond jewelry is not being met by discoveries. There have been no major discoveries since 2005. The high-value Karowe mine in Botswana, where three of the directors of Botswana Diamonds played an active part in the discovery, came on stream in 2012 -– but is only producing approximately 400,000 carats a year of premium product. Established diamond mines are getting deeper and more costly to operate. The result of these factors is likely to be stronger prices in the future," he said. The current drill program, which began in September, tested five prospecting licenses, 206 to 210, all of which ALROSA selected; and following initial results, the center of attention turned to 206, 207 and 210. The partners are deploying highly focused soil sampling and geophysics techniques on the three parcels, Teeling explained. On license 206, five areas of high kimberlite concentrations are being explored to determine if the minerals are from known Orapa clusters or from new kimberlites. On 207, where two diamonds were discovered, the focus is on the northwest region where high concentrations of kimberlite are aligned with magnetic anomalies. Finally, on 210, where mainly pyrope garnet kimberlites were discovered, the engineers believe the minerals have not traveled far and, therefore, heavy concentrate sampling is ongoing to better understand the area's dynamics. After Botswana Diamonds and ALROSA collect samples from target areas, these are sent to St. Petersburg, Russia for testing. Project funding is secure through the third quarter, Teeling said. Independent of ALROSA, Botswana Diamonds held an option to acquire up to a 95 percent of the 13 license Brightstone block in the Gope region of the Central Kalahari Game Reserve. Teeling stated that a large base metal producer has decided to enter the diamond sector. "They have become operator of the block and they have an exploration team on the ground. We have contributed much of our Gope area data bank to the new company. In return for conceding our rights and contributing our data we will end up with a 15 percent free carry-through all phases of exploration up to the completion of a bankable feasibility study. Our interest will be held through a shareholding in a private Botswana company. "If you want to be in diamonds you must be in Botswana, which is the world’s leading producer of high quality stones. In Botswana, it makes sense to be where diamonds are likely to be found, the Orapa cluster. In the Orapa area it makes sense to bring in fresh eyes, ideas and technology to seek out hard to find diamond deposits. That, in a paragraph, is the Botswana Diamonds strategy -- the best industry, the best area and the best technology. But remember it is still exploration, a high risk high reward venture," Teeling stated.
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