Australia's Frontier Diamonds Goes Public on ASX, Aims to Improve S.African Mines

Mining and Exploration
09/01/2018 14:38

Australia's Frontier Diamonds was admitted to the ASX – the Australian Securities Exchange –  on January 3 and commenced trading shares on January 5, 2018. Frontier’s current focus is largely on two operating diamond mines in South Africa – the Star and Sedibeng Diamond Mines. Since acquiring the Sedibeng and Star Diamond Mines from Petra in 2014, Frontier’s strategy has been to restart operations and to make capital development and operational changes to cut costs and deliver strong improvements in operational efficiencies. The company was listed on the exchange after it had successfully raised approximately $4 million from an initial public offer. The mines have historically delivered high grades with a large percentage of gem-quality diamonds.

The Star Mine has been in operation for more than 60 years and all the necessary mine infrastructure exists. It is currently operating at depths of between 580 and 620 metres below the surface. Since operations began in 1959, more than 625,000 carats have been recovered at an average grade of 44.28 cpht. In the last 14 months spanning 2016-17, 9,704 carats were recovered at an average grade of 42.73 cpht. Frontier's strategy is to significantly increase operational efficiencies and reduce operating costs at the Star Mine. Currently, ore at the Star Mine is hand mucked, which is labour and time intensive. It is planned to change this to a water jetting method, which will reduce the cost and time to recover material and increase product assurance on the diamond handling of large stones. Through the water jetting process the Company believes that it is possible to increase the recovered grade from 40 cpht to 55 cpht. 

The Sedibeng Mine is also more than 60 years old with infrastructure in place; 328,000 carats have been recovered of the course of its production history, with an average recovery of 23 cpht. Frontier says it, "is utilising their extensive expertise in engineering services and underground mining operations to make productivity improvements at their two existing mines and to further develop the operations from a low-cost investment base. These mines have good grades, produce relatively high-value diamonds, have been profitable the past two years in generating cash flow and have resources to last at least 15 years. Management’s strategy is to build on this solid foundation and are actively looking at other opportunities in its strategy to grow into a significant producer of high-quality diamonds."