Botswana Diamonds, ALROSA Start Fieldwork in January

Botswana Diamonds reported that its loss narrowed 10.8 percent year on year to $837,000 (GPB 518,245) for the fiscal year that ended on June 30. The company stated that it will enter a ''high powered phase of exploration'' next year, beginning in early January, with the first ground phase of its joint venture with ALROSA when four Russian geologists launch fieldwork on the PL117 license in the Orapa area of Botswana. The objective of that exercise is to refine drill targets, which will be followed by a drilling program in March and April.

''It has taken two years to negotiate the joint venture. Most of the time was well spent with Botswana supplying mountains of data and ALROSA analyzing it and identifying targets,'' said John Teeling, the chairman of Botswana Diamonds. ''PL117 contains the top-ranking targets. A series of other targets are lined up to follow, including areas where deep sand cover has meant that no kimberlites have ever been discovered.''

ALROSA believes that its exploration techniques can predict the location of diamondifereous kimberlites up to 100 meters below a cover of Kalahari sand and basalt, according to Teeling. The first test of this technology will occur in the first half of 2014 as the partners explore PL117, a 2.9-square-kilometer license in Orapa, close to Lucara Diamonds' Karowe mine. ALROSA developed techniques and adapted existing methods to handle the tundra in Siberia, where it was common to experience overburden up to 200 meters thick before hitting rock.

''The directors of ALROSA believe that their techniques can work in Botswana, the home of diamonds and the world's biggest producer by value. Most of Botswana is covered by the Kalahari desert. For 18 months ALROSA and Botswana Diamonds have gathered and analyzed as much data as possible on Botswana geology in the Orapa region -- the logical place to start where four of the world's great diamond mines exist,'' he said.

Additionally, Botswana Diamonds noted that ALROSA ran an analysis of the Gope area, which is in the Central Kalahari Game Reserve where environmental considerations are paramount to exploration activity. ''The area is highly prospective. The Ghagoo mine is expected to come on stream in late 2014, while a significant discovery has been made on KX36 in the East of the area,'' Teeling said.

South African and local interests had obtained a substantial block of 13 licenses, covering much of the area and Botswana Diamonds has a joint venture with the license holders whereby it may earn a 51 percent interest in the block by spending $940,000 on exploratory activity. ''Farming in makes sense. If you discover something exploration spending very quickly brings you to 95 percent. If you find nothing it matters little what percentage you hold,'' Teeling said. ''Our geologists, with the assistance of ALROSA, have identified a series of targets which, finance permitting, we will explore in 2014.''

Botswana Diamonds also evaluated an alluvial opportunity this year on the banks of the Save River on the Zimbabwe/Mozambique border, which it concluded offers potential but the terms of the joint venture and the costs outweighed the benefits of moving ahead.

''Our exploration ambitions are limited by our finances. The retail market for fresh equity in AIM listed explorers is virtually non-existent. Falling share prices not only dilute existing shareholders when funds are raised but also make funding more difficult as investors believe that by waiting prices will be lower. Often they are right. We are hoping to place shares with long term investors. The directors take shares instead of financial compensation,'' Teeling concluded. ''We will have the funds to operate the ALROSA joint venture, which has a 2014 budget of GBP 600,000 on a 50/50 basis. Our second priority is to fund the Gope area exploration.''

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