Tanzania: Mwadui Diamonds Production Rises

THE Run of Mine for Williamson Diamond, subsidiary of Petra Diamonds increased 3 per cent in the first half of 2019 financial year, demonstrating the continued steady operational delivery of the mine.

The Mwadui, Shinyanga based mining company recorded 214,888 carats in the first half of 2019 financial year compared to 208,064 carats of the corresponding period 2018.

However in the short term, the mining firms financial results for the six months to December last year, the slump of the mine will have a negative impact on grade and carats, particularly in February and March.

On 21 January 2020, a pit slump of approximately 1.3 million tonnes occurred at Williamson in an area on the south western sector of the pit.

Most importantly, nobody was harmed in the incident. There was also no damage to any mining equipment.

After a preliminary risk assessment, all activities in the vicinity of the slumped area have been stopped and the local mine team is developing a mitigation plan, however the situation is made more challenging by the high seasonal rainfall currently being experienced.

Production was moved to areas in the north west of the pit that can be accessed and mined safely.

However, the area affected includes a pit access haulage road as well as a mining area and therefore needs to be cleared and stabilised, with new appropriate infrastructure for pit access re-established, in order to ensure that this does not materially impact future production.

"However, as Williamson was running ahead of its mine plan for the full year, we are maintaining our targeted tonnes treated and carats recovered," the statement said.

Williamson's revenue decreased 17 per cent to 43.5 million US dollars in the first half 2019 compared to 18.5 million in the same period 2018 mainly due to the average value per carat being down 17 per cent to 184 US dollars compared to 223 US dollars in the corresponding period 2018.

The poorer product mix at Williamson is due to the area of the ore body where mining is taking place.

The Company remains in discussions with the government of Tanzania and local advisers in relation to various issues, including the overdue VAT receivables and the blocked parcel.

The on-mine unit cash cost per total tonne treated was down 12 per cent to 10.2 US dollars in 2019 compared to 11.6 US dollars in the other period, which remains in line with guidance.

The capex of 5.7 million US dollars in the H1 2019 financial year compared to 3.2 million US dollars in the same period 2018, related to sustaining capex only and primarily related to in pit waste stripping, tailings line expansion and improvements to the slimes dam walls.

All capex is funded from the mine's own cash flow and may be adjusted when issues relating to the blocked parcel and VAT are resolved.

The recent pit slump may accelerate the removal of overburden waste material from the pit, which may increase the short to medium term Capex requirements for the mine.

Once the Company has completed its technical assessment and mitigation plan, further information will be made available.

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