Botswana diamond project to be in top 10

African Diamonds, the Aim-listed gemstone exploration company chaired is soon expected to announce that it has significantly upgraded the size of its find in Botswana and it believes the resource could become one of the worlds 10 largest diamond mines according to reports in the Telegraph. The company has a joint venture with De Beers, the diamond giant, which owns 51% of the project and can acquire up to 70% by funding the exploration work near to its existing mine at Orapa in Botswana.

The resource was discovered by a young De Beers geologist, Mark Scowcroft, who left the company after failing to convince it that its geological models were incorrect. He applied for licenses over the area and together with African Diamonds set up an exploration project on the site. De Beers was forced to buy back in when Scowcroft was proved correct. Now, it seems that the resource, known as AK6, is even richer than had been thought.

The discovery of the stones is expected to raise the overall value of the proposed mine to around $150 per carat and production to an expected 1.5m carats per year. Under previous predictions, analysts had expected the mine to produce revenues of around $3.6bn (�1.95bn) and attributed a value of $6 per share to African Diamonds shares. That figure is now expected to be revised substantially upwards.

The companys other diamond exploration assets in Sierra Leone and Guinea will be spun off into a company called West African Diamonds. African Diamonds shareholders will receive shares in WAD on a four-for-one basis and the company is expected to be listed on Aim later this year when it will also raise money to bring two projects in Sierra Leone into production.