African Diamonds ups stake in Botswana mine

AFRICAN Diamonds – the Irish-headquartered precious stone mining company – is set to generate annual revenues of around $80 million (€60m) from upping its stake in the high potential AK6 diamond mine in Botswana.

The Dublin-based company, which is chaired by businessman John Teeling and has its shares listed on London’s Alternative Investment Market (AIM), announced yesterday it has exercised its option to increase its stake in the AK6 mine from 27% to 40%.

African Diamonds co-owns the mine with Canadian diamond company, Lucara, a development which followed on from industry giant De Beers recently selling out of the asset entirely.

African Diamonds said last month it was likely to take the option of increasing its interest in the mine. At the same time, the company reported a significant decline in its first half pre-tax losses (for the six months to the end of December) from £775,000 to £205,000. The AK6 mine is expected to come on stream next year. African Diamonds is expecting its share of output to be around the 400,000 carat mark.

Once the mine is fully operational, the company will look at enhancing other assets. It is likely to seek, next year, joint-venture agreements on other assets. “During the struggle to commercialise the AK6 discovery, our top quality exploration ground was ignored. Targets such as AK8 and AK9 are known to shareholders, but we have other prospective kimberlites – in particular, BK5. We now have time and money to focus on these targets. There are more diamond mines to be discovered in Botswana,” said Mr Teeling.

Meanwhile, no firm timeframe has been set as to the next step for another John Teeling venture,Hydrocarbon Exploration. That oil and gas exploration company was recently formed following the sale of Pan Andean’s Colombian and Peruvian assets to Canadian company, Petrominerales. Hydrocarbon retained Pan Andean’s US (Gulf of Mexico) and Bolivian-based assets. It is expected the company will seek a re-listing on the AIM exchange and it has been mooted it could take over some of the assets of Persian Gold (another company Mr Teeling chairs) – although nothing has been decided yet by the board.