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For the past 6,000 years diamonds have been
highly prized for their sparkle and strength.
They are formed in the Earths mantle, which
lies 110 miles below the surface, by intense pressureand temperatures in excess of 2,400C. Diamonds
are brought to the surface by volcanic eruptions
which send large pieces of mantle rock, called
xenoliths, upwards. The presence of nitrogen and
sulphur create the highly prized yellow, pink
and blue diamonds.
The key uses are either as gem
diamonds or industrial diamonds.
They sparkle because of their
optical quality which is due
to the manner in which lightpasses through these stones.
By quantity, 30% of diamonds
mined annually are cut, polished
and turned into jewellery. The
value of the stones is based on
four Cs: carat, cut, colour and clarity,
with the highest prices received for the
pretty coloured stones. Industrial diamonds
account for the remaining 70% of world diamonds by
quantity. As the hardest naturally occurring material
on the planet, diamonds are used for cutting,grindin g, drill ing and polishing ; either as tiny stones
or crushed to create abrasive powders.
Historically, Africa has been the major source of
diamonds since the 1870s, but the last fty years
or so have seen the emergence of diamond mining
in Russia and Canada. The estimated global rough
diamond production in 2010 was 133 million carats
worth $12 billion. Of thi s total, Russia produces 34.85
million carats (26%) followed by Botswana (16%),
Democratic Republic of Congo (15%), South Africa
(10%) and Canada (9%). The better quality stonesare found in Botswana which, based on value, came
out on top with $2.59bn compared with Russia at
$2.38bn and Canada at $2.3bn. Between them the
top ve producing countries account for more than
three quarters of world diamond production. The
remainder comes from Angola, Zimbabwe,Australia, Namibia, Gui nea, Brazil and
Ghana.
Diamonds are produced by mining
either hard rock that contains
xenoliths or alluvial sediments that
have resulted from the weathering
of diamond bearing rocks. Today
most diamonds are mined from
kimberlite, a rare type of volcanic
rock, which occurs as pipes, dykes
and blows. Kimberlite pipes are vertical
carrot-shaped structures and a rule ofthumb used in the industry is that just one in
1,000 kimberlites actually contain diamonds. There
is even less chance of nding an economic deposit.
However, in some countries, such as Botswana,
diamondiferous kimberlites are a lot more prevalent
than that ratio would suggest.
Alluvial dia mond mining involves the processing
of river and beach gravels to extract diamonds.
Although thi s mining method accounts for just
10% of world diamond production, it does produce
some very high quality diamonds. Exploration work
involves geologists sampling stream sediments to
nd diamonds or diamond indicator minerals which
may be traced back to the weathered remains of a
kimberlite pipe that can have a surface expression inthe order of many hectares.
Industry giant De Beers estimate global jewellerydemand rose by 8% in 2010. The US, the largest single
market with 38% of global demand, saw a 7% increase
in demand. However, the real excitement surrounds
the far-higher growth rates witnessed in emerging
markets with countries like China and India seeing
growth rates in local cur rency terms of more than
25% and 31% respectively. De Beers is predicting the
Far East (China, Hong Kong, Taiwan, India and the
Gulf region) will account for 40% of global demand in
2015. This is a story of the urbanisation in China and
India and the burgeoning middle classes along with
escalating wealth in the Middle East, which are seenas powerful business drivers.
There is a scarcity of new diamond projects
coming on stream due to the oversupply of
diamonds in the 1990s, which discouraged
exploration eort. Matters have not been helped
by the worldwide nancial crisis which h as slashed
exploration budgets. In the rst half of 2011, rough
diamond prices climbed by 40% on the back of
demand from China and India. Uncertainty in
nancial markets may have trimmed these gains for
smaller stones, but demand has remained rm for
better-quality diamonds. Over the last seven yearsthe price of rough diamonds has basically doubled
and growth in the market is expected to resume in
2012, driven by the clear shortage of supply.
FEATURE SPONSOR
Sparkling future
OORTUNITIES IN AFRICAN DIAMOND MINING
Dr Michael Green exaMines the funDaMentals of the DiaMonD Market
...
Dr. MichaelGreen is an
independent
mining
analyst
specialising
in small cap
stocks and
has acted as
a consultant
to a number of stockbrokers.
He has been active in the
smaller company sector since
1990.
Dr Michael Green
Thebetter quality
stones are foundin Botswana which,
based on value,came out top
with $2.59bn
Mining Mvn @thminingmvn www.miningmvn.com
Botswanas Orapa region
rench
excavationat BK5
February 2012
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Tom
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John TeelingExecutive ChairmanJohn Teeling is executive chairman
of Botswana Diamonds and has 40
years resources experience. Teeling is
also involved in a number of other AIM
exploration companies and has been a serial
entrepreneur in the resource sector having founded African
Diamonds and created Pan Andean Resources, Minco, African
Gold, Persian Gold and West African Diamonds, all listedon AIM. The deal which saw Lucara (part of Lundin Group)
takeover African Diamonds in 2010 was worth in the region
of $90 million. He is also the founder and a former director
of Kenmare Resources, former director of Arcon and holds
interests in a number of industrial ventures. As chairman of
Cooley Distillery he recently oversaw its sale to J im Beam for
$95 million. Teeling holds degrees in Economics and Business
from University College Dublin, an MBA from Wharton and a
DBA in Business Administration from Harvard. He lec tured for
20 years in business and nance at University College Dublin.
Andre FourieTechnical Director
Andre Fourie, technical director at
Botswana Diamonds, has 21 years of
diamond and gold experience, 19 of which
was with Anglo American and De Beers. Hehas done exploration and mining geology
on WITS paleoplacer gold deposits including surface and
underground drilling as well as 3D seismic surveys. Fourie
also has experience in marine, alluvial and kimberlite
diamond exploration and mining across Southern Africa. He
is responsible for strategy formulation and implementation
on a company as well as business unit level and for managing
a department of multifunctional specialists and professional
engineers/earth scientists. Andre has a degree in Geology
and postgraduate qualications in Mining Engineering from
University of Stellenbosch and WITS University.
James FinnFinance Director
James Finn is nance director of Botswana
Diamonds and has over 20 years
experience in working with explorationcompanies. Finn has extensive experience
in the administration of oil and gas and
minerals companies. He has been responsible for listing
several resource sector companies on AIM in London,
including two of the rst companies ever listed on AIM, Pan
Andean Resources and African Gold. Finn was previously
nance director of African Diamonds and West African
Diamonds. He holds a degree in Management and the
Association of Chartered Certied Accountants (ACCA)
qualication.
David HorganDirector
David Horgan is a director at Botswana
Diamonds and has extensive African
experience. Horgan has over 20 years
experience in oil and gas and resources
projects in Latin America, Africa and the
Middle East through a number of AIM listed companies
including Clontarf Energy, Petrel Resources and Pan Andean
Resources. He previously worked at Kenmare where he
raised nance, captured the premium graphite worldwide
market and evaluated investment opportunities. Prior to
that he worked with Boston Consulting Group internationally
for seven years. He holds a rst class law degree from
Cambridge and an MBA with distinction from the Harvard
Business School. Horgan speaks several languages including
Portuguese, Spanish and German.
Robert BouquetDirector
Robert Bouquet is director at Botswana
Diamonds and has 17 years experience in
the diamond industry, 14 of which he spent
with De Beers and Rio Tinto Diamonds in a
variety of strategic and commercial roles. On
the commercial side Bouquet has worked in strategic roles as
well as a sales manager for Rio Tinto and as a rough diamond
buyer for De Beers in the Democratic Republic of Congo
and Guinea. He has wide experience in diamond producing
countries, particularly in Africa, as well as in all diamond
cutting centers. He has a degree in Management and French
from the University of Leeds.
Meet the team
In this interview, MiningMaven puts investor-focussed
questions to John Teeling, executive chairman of
Botswana Diamonds, an exploration company focussing
on the best addresses in the diamond world.
MM: What are the companys key strategic objectives?
Teeling:To multiply the capital value o Botswana Diamonds by
fnding new diamond mines. We are looking to recreate the recent
success o Botswana Diamonds predecessor, Arican Diamonds,
which discovered and successully sold a multi-million carat a year
mine in Botswana. Botswana Diamonds is managed by many othe team responsible or that discovery. Our goal is to secure high-
potential ground and projects, and become a hard rock diamond
producer.
MM: Why is the diamond sector a good place to invest today?
Teeling:The undamentals o the diamond business are the besto any mineral: demand is strong, supply is tight, new discoveries
are rare and diamonds are a store o value. The supply gap will
increase signifcantly rom 2015, which strongly supports uture
diamond prices and businesses that beneft accordingly.
MM: Why is Botswana considered the best address in
diamonds?
Teeling: Botswana is the Switzerland o Arica: prosperous, law-
abiding and sae. It is the largest supplier o diamonds globally by
carats and value, has the highest percentage o diamond-bearing
kimberlite pipes and the lowest operating costs worldwide.
MM: What news fow can investors expect rom the company
in the coming year and what does this mean or value
generation?
Teeling:We are very excited about 2012. We are confdent there
are more mines to be ound in Botswana where we will apply newtechnoloy to prospective ground and hope to repeat our earlier
success. We are also at the oreront o the emerging palaeoplacer
diamond sector, which holds considerable potential where we
have prospective ground in Cameroon, and an active programme
in Zimbabwe. This year will see activity in all three countries. The
board is confdent o a bright uture or Botswana Diamonds with
lots o news on all ronts. Investors should also fnd comort in the
act our costs are low, cash is reinvested in the ground and the
whole team benefts rom discoveries, which closely aligns the
interests o all our stakeholders.
To read the full Q&A, please
visit the Mini ngMaven.com
website, click on this link or
type it into your browser:
http://bit.ly/AdzR3b,
or scan this QR code with your
smart phone:
Ve fr he p:
Botswana Diamonds
Excavatedtrench at AK8
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Clly d cDigging Deeper into Botswana DiamonDsBy Emma Cusworth
BotswanaDiamonds at
a glance:
Strong African focus
Experienced team with proven
track record of delivery
Good ground position
New approach in Botswana
Established presence in two of
the newest diamond provinces
Cameroon and Zimbabwe
Ticker: BOD
Shares issued: 100.53 million
Listed: AIM, 1 Feb 2011
Year end: 31 December
Tel: +353 1 833 2833Fax: +353 1 833 3505. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MiningMaven
MiningMaven is the go to
resource for the private
investor with a keen eye on the
mining exploration and natural
resources Sector. As well as
writing about the sector and
specic companies, MiningMaven
conduct regular interviews with
management, allowing investors
to stay abreast of companies
progress. MiningMaven also host
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oering investors the opportunity
to meet the companies, learn
more about the sector and hear
from industry experts. For more
information please visit us at
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Newsletter.
@theminingmaven
Mining Maven. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EmmaCusworthFreelancefnancialJournalist
Emma Cusworth
is a freelance
nancial journalist and has been
following investment markets
and issues for over a decade. She
regularly contributes features and
comment to leading investment
trade publications including
Financial News, Investment
& Pensions Europe, Portfolio
Institutional and Hedge Funds
Review. She was also responsible
for editing this special feature.
Attractive Price Fundamentals
20
15
10
5
US$Billions
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018I I I I I I I I I I I
SUPPLY
(IN 2008 PRICES)
DEMAND
Source: Alrosa, RBC Capital Markets
Ingeological
terms, BotswanaDiamonds is
operating in thebest address in
the worldFOURIE
Treatmentplant usedby BotswanaDiamonds
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The Company eatured here has sponsored the cost o producing this MiningMaven Special Feature. All fgures quoted have been obtained rom the Companys websites and/or publically available sources. Errors &
omissions excepted. All written content represents the views and opinions o MiningMaven, has been prepared or inormation and educational purposes only and should not be considered as investment advice or
a recommendation to buy shares in the company eatured. All opinions expressed are those o the author/s and unless otherwise stated should not be construed as being made on behal o the eatured company. From
time to time MiningMaven principals may take equity positions in a eatured company. Readers are advised to do their own extensive research beore buying shares which, as with all small cap exploration stocks, should be
viewed as high risk. Investors should also seek the advice o their investment adviser or stockbroker, as they deem appropriate. MiningMaven is a division o Catalyst Inormation Services Ltd registered in England: 06537074.