African Diamonds’ losses increase

JOHN TEELING’S African Diamonds has reported losses of £261,000 (€385,000) for the six months to June 2005, up from £222,000 in the same period last year.

The company generated no revenues during the period, but Dr Teeling, who chairs the board, said the future was bright and a number of potential investors had expressed interest in becoming involved.

The company’s main focus was on its joint venture with South African diamond giant De Beers, which centres on 11 licences in the southern African state of Botswana. “Our main outlay in the coming year is in Botswana, where De Beers will spend in excess of $22 million (€18 million) on our joint licences. We will spend nothing on these,” said Dr Teeling. “We are in the right place at the right time with the right partner.”

The company also plans to expand its wholly-owned operation in the same country but said any extra work would be performed at low cost. Similar projects in Sierra Leone, in the west of Africa, are under consideration but Dr Teeling said it was likely that the company would pick a joint venture partner for such work, in order to minimise the level of investment required from African Diamonds.

However, he warned shareholders that investing in diamond exploration was risky. “Exploration is high risk, difficult, often dangerous, with the chance that investors will lose their money,” he said. But he added that the company’s strategy so far had been vindicated and there was “every indication” that the De Beers joint venture would propel the company to the big league. “I must caution you that it is still a prospect, but it looks good,” he said.