“We have the diamond,” said Leora Halfon of tender house Koin International on the sidelines of the African Diamond Conference, showing us a photo of the 476-carat, Type IIa, D-colored diamond just unearthed by Meya Mining in Sierra Leone. “It’s already in Antwerp.”
Koin CEO Adam Schulman then introduced us to the man behind the headlines: Jan Joubert, CEO of Meya Mining, the company that seemingly came out of nowhere to stun the diamond world with the discovery of a high-quality 476-ct stone, the fifth-largest rough diamond in Sierra Leone’s history, in the very first ore sample put through the processing plant. An anomaly to be sure, but as we would come to learn, nothing about this new mine is conventional - from the “astronomical” potential of the resource to the almost impossible timeline they set for establishing their brand-new mine.
The Diamond Loupe sat down with Jan Joubert and Ibrahim Sorie Kamara, of Germinate SL Limited, in the offices of Koin International in Antwerp, the company that will market and tender the big stone, named the "Meya Prosperity". What follows is Part 1 of the latest positive diamond story to emerge from Sierra Leone.
The Diamond Loupe: Tell us first of all about the location and geology of the Meya Mine
Jan Joubert: The Meya license borders the Koidu license, and the geology within Koidu extends into the Meya licence area. At Koidu, the strike of the ore body is approximately 2km. In Meya it is 12km, and the total area of the License is 130 sq.km. Based on our experience and what we observed at Koidu, we believed the Meya area might have significant potential, and the initial sample results affirmed that belief. Our plan is to take three samples over the full strike of the dyke, which we delineated down to 450m - from one border of the license to the other, and the drilling results show continuation over the 12km strike. We have identified 16 dykes in the license; the geo-economic potential is therefore very encouraging.
DL: Germinate SL Limited secured the license in 2015. The partnership between Trustco and Germinate was only finalized in August 2016, after which Meya Mining was established. Fifteen months later we are sitting here. Tell us about the process.
Jan Joubert: This license has been around a very long time, and many other companies explored it, but could never really prove the geo-economic potential. Our success in this short period of time is due to key decision makers believing in each other. It came down to trust. The Government of Sierra Leone believed in Ibrahim, who in turn believed that we at Trustco would do exactly what we committed to do, even though it is a very ambitious work program.
In turn, Trustco’s CEO and Board of Directors bought into my vision and conviction that this license holds significant intrinsic value. Also, having a management team familiar with the operating environment, and my 15 years of experience developing Koidu from a greenfield to a producing mine, provided us with a unique understanding of the geology and the best way to unlock the potential. Remember, the geology has not changed for billions of years. The only difference between us and the ones before us is our understanding of the area, because it is as much in the signs as it is in the science. And our strong conviction and unconventional approach to unlocking the value were all contributing factors.
Traditionally, when you are in the exploration, sampling and delineation phase, defining a resource in order to eventually formulate a reserve estimate, you limit your financial exposure. You set up a small sampling plant, put together a small management team, contract a miner to do earthmoving, and so forth. Based on experience at Koidu, our philosophy was to do it unconventionally from the outset. I had so much conviction about the potential, and both Trustco and Germinate trusted that conviction to the extent that we decided to put in a sampling plant that could immediately transition into a production plant.
I have to say the shareholders were skeptical at first because my vision sounded like a fairy tale. Everybody said, “It’s too good to be true. And if it’s too good to be true, let’s stay away from this.” I’m very convinced that had this been presented to the very big names in the mining sector, especially in the diamond sector, none of them would have put the money on the table. Because it sounded too good to be true. If you look at history, out of the 20 largest stones ever recovered in the world, at that point four were found in Sierra Leone. Of those four, three came from within this license area.
DL: Why didn’t anyone else see what you saw?
Jan Joubert: When you physically stand on the ground, all you see is a vast piece of land covered with elephant grass, trees, swamps and water. Given that puzzle, combined with the obvious physical and operational challenges, the easy thing to do is say 'no'. If you say 'yes', you have to come and prove it. I believe for many geologists it was just easier to say no. If you are not passionate about the diamond industry and completely committed to the country, you will never do this, because it is not easy. There are many difficulties in Sierra Leone, not to mention all the negative publicity.
So, what is the attitude of the average investor in Sierra Leone? They will put in $10m and want to earn their investment back in one, two, maximum three years. Can you do a first-tier operation with $10m? No. Hence, they buy second-hand equipment, cut corners and so forth, but when it doesn’t work out, it adds to the bad reputation of Sierra Leone. Another investor will secure the mining rights, market and hype the license and sell it off for a huge profit. When it turns out to be nothing, the market is left with the loss, and the country loses out economically as well suffering further reputational damage.
Bottom line: if they don’t see an easy buck, they’re not interested. That’s why it takes someone that knows the terrain and believes deeply in the country to see the potential, and then commit to unlocking the intrinsic value. It will be difficult, of that I am certain. But if we can get four or five good successes like this in Sierra Leone, it will become easier. Everything becomes easier.
DL: You mentioned your approach was unconventional. Could you explain what you mean?
Jan Joubert: In my experience, for any investor - and not just Trustco, a company that entered the resource sector only recently - the willingness to commit to investing in a greenfield mining venture in Sierra Leone in the manner that we did is unconventional and speaks to true entrepreneurship and trust. To agree from the outset that Consulmet should design the plant using the best technology based on the possibility and probability of recovering big stones was also unconventional. A conventional mining house would say, “No way. We’re not going to go with the best technology from the outset, especially not during sampling, because that’s not how things are done in a world where every decision is based on financial factors.” So, it was a very unconventional approach.
Not only did we go for the best tech available, albeit on a smaller scale, we went for a plant that is bespoke designed for this specific ore body, based on our understanding of the geotechnical parameters gained at Koidu. This diamond would not have been discovered if we didn’t have this specific plant tech in place. Type IIa stones are typically not discovered through a traditional processing plant.
In addition, instead of using a contract miner, we decided to do the mining internally. It’s a huge capital risk, because now you’re buying an earthmoving fleet in a perceived high-risk environment, and maybe it’s not going to work out. We made a commitment to our partner, Germinate, that we would complete the Phase 1 work program within an 18-month period – an ambitious timeframe when you consider it entails mobilization, construction, exploration and building the plant - hugely ambitious. But with that seemingly impossible timeline, you cannot set yourself up with second-hand equipment and deal with breakdowns that will slow your progress.
In this regard, we got huge support from Volvo, who in my opinion is the best earthmoving supplier in Sierra Leone. They supported us with a credit line and brought us the new earthmoving fleet. All these unconventional decisions enabled us to achieve our timeline and recover this stone.
Jan Joubert: As I mentioned, the finalization of terms between Germinate and Trustco took place in August, and we commenced the drilling program at the end of October 2016. Foundations for the processing plant started on March 8, 2017, and we recovered the first diamond from some overburden sampling on August 19. The plant was commissioned at the end of August 2017, but we only put the first kimberlite ore through the plant in October 2017. The final signing off of the plant was on November 4 and we recovered the 476-ct diamond on November 9. (See the timeline in annex).
The beauty of what we recovered is not the fact that it’s 476 carats. The beauty is that this was the first blast, and the first kimberlite sample of only 4,500 tons, after we commissioned the plant. Furthermore, apart from the 476, the other bulk sampling results are astonishing. I’m talking high quality stones, very high grades, even from this relatively small sample. Based on this result, the Life of Mine economic potential is astronomical, and that’s exciting. It gives recognition for taking all the right decisions.
The other exciting part is that these two stones (709 & 476-ct) give recognition to a country that really needs a good story, that needs investment from the kind of investors that can make a significant impact. We need the right quality investor to come into the country. If we can achieve this success three or four times over, the impact will be immense. This is the beginning of something really good, and it is going to be completely transparent, from management to the market, and in our communication with the government and the community.
DL: It sounds like everything had to go just right to achieve this on time.
Jan Joubert: Let’s just say that all the different components and dynamics came together perfectly, realizing the vision. The partnership between Trustco and Germinate is a perfect fit and we have a great management team. Then there is the support from Consulmet, which also built the plant at Koidu; they brought all their logistical experience and engineering understanding to bear on this project and made an extraordinary commitment to delivering what we asked. And they did it in nine months. That’s quicker than building a house in Europe. The commitment and support from Volvo were amazing.
And then, of course, Germinate’s relationship with the government and local community stakeholders, which ensured that nothing went wrong, that bureaucracy did not get in the way. Mr. Kamara had the support of government, which gave him an incredible opportunity as a young Sierra Leonean. They made sure he got the support to make it happen. Ibrahim’s ability to obtain the license on his own is an amazing story itself (See Part 2 next week).
DL: What motivated your decision to market the 476-carat diamond, and your future production, with Koin International in Antwerp?
Jan Joubert: There are many sales avenues. The tendering process is probably the one approach that is fair to the buyer, the producer, to everyone. It clarifies the market. It tells you what the market is prepared to do on that specific day for that specific parcel. It’s an extremely good system - the best system for being transparent from all perspectives.
About six months into the plan, when we were close to commissioning the plant, we came to Antwerp to meet Koin to get a feel for the people. In this industry, it is important to see what drives the individuals you do business with. How are they doing it? Do they see the big picture? Or are they only after profits? Do they believe in doing the right thing in the right way? All of these matter to me. Koin is a niche tender house, very professional. They understand the market and have the network.
Our first sale was in October. We will try to do a sale every month, but right now we are still in a bulk-sampling process, still defining the resource. We do not have steady run-of-mine production yet. When this diamond emerged, it was an easy decision to go with Koin. I believe they will facilitate the best process in the end. I know it will be based on a true understanding of the market and the best process for all the stakeholders involved. At the end of the day, this is a unique opportunity to promote the country. The promotion of the country is as important to us as any economic benefit we get from this.
Part 2 of “Partnership for Prosperity” will focus on Germinate’s acquisition of the License, community relations and the impact Meya Mining hopes to have on the country.