Canada’s Diamcor Mining (TSX-V:DMI) announced this week not so positive results from the tender and sale of rough diamonds recovered from its 5,888-hectares Krone-Endora project in South Africa, located next to De Beers’ Venetia mine, the world’s third largest.
“The Company sold 4,353.91 carats of rough diamonds for gross proceeds of USD $864,546.09, resulting in an average price of USD $198.57 per carat. The lower number of carats tendered and sold is attributable to a reduction in the volume of material being processed due to the previously announced water recovery issues associated with excessively suspensive properties of the very fine kimberlitic clay materials,” Diamcor said in a media statement.
The Kelowna-based junior has not been able to operate the Krone-Endora plants at full capacity due to insufficient recoveries of water from the project’s settling dams. The company said that corrective measures, such as the installation of a paste thickening plant, are being implemented and should eventually fix the issue. “Processing of material at limited volumes will continue in the short-term, however considerable focus is being placed on finalizing the procurement, installation, and commissioning of this item, and once installed, the Company remains confident that processing volumes can be significantly increased,” the communiqué reads.
Besides the technical water problems, Diamcor stated that a shorter time frame between tender dates also affected its proceeds for this quarter.
Nevertheless, the company highlighted that during this period it recovered higher-value gems, which allowed it to receive a better average price per carat. In detail, Diamcor tendered and sold three individual rough diamonds that were over 10.8 carats, with the largest being 25.02 carats, and 19 individual rough diamonds being over 5 carats in size. “The average dollar per carat of $198.57 for the rough diamonds tendered and sold in the current period increased compared to the previous quarter ended September 30, 2017, in which the average dollar per carat of rough diamonds sold and tendered was reported as $171.70,” the firm revealed.
Tiffany & Co Canada has the first right of refusal for Diamcor’s stones, based on a deal that the British Columbia miner signed with the retailer in 2011 following its acquisition of Krone-Endora.