Tongo Diamond Project

Newfield’s flagship asset is the highly endowed Tongo Diamond Project in Sierra Leone.  Intensive site activities are currently laying the foundations for targeted development and operation of Tongo from 2019.
Stellar Diamonds plc has previously reported that the Tongo Project contains a JORC-compliant inferred historical resource of 4.5 million carats.  This resource is based on over 65,000m of drilling, which has delineated the kimberlite dykes to approximately 200m below surface.  Deeper drilling shows that the dykes continue to much greater depths.  Similar dykes in South Africa but with lower average grades and rock values, have been mined to over 700m depth – with some remaining in operation today.

The Tongo Diamond Project comprises two adjacent mining licences covering a combined area of 134 km² in eastern Sierra Leone. These licences are subject to a tribute mining and revenue share agreement with Octea Mining. The key elements of these agreements are:

  • Consolidates two licences covering 11 diamondiferous kimberlites only three of which have been established into resource
  • Certain plant and mining equipment acquired as part of the tribute mining agreement
  • Newfield to fund development of the project into production
  • In return Newfield investments are repaid from first revenues and US$5 million to Octea
  • 10% revenue share to Octea (net of government royalty) after full project construction costs have been recovered
  • US$5.5 million bullet payment to Octea after Year-5

The Tongo Project consolidates 11 identified diamondiferous kimberlites, only three of which have been the subject of historic resource estimates by previous owners. It also benefits from considerable existing infrastructure including the current relocation of a 50 tph processing plant, an existing 5 tph bulk sample processing facility, certain mining vehicles and equipment, and significant associated building and camp facilities. Newfield is rapidly progressing a Front End Engineering Design (FEED) and mine development drilling program targeted at accelerated development of the Tongo Project to commence mining in 2019.

Commencement of front end engineering and design (FEED) program for Tongo

The FEED program for the Company’s flagship Tongo Project commenced in the March 2018 quarter and is being coordinated by independent consulting groups, Paradigm Project Management and SRK Consulting. The FEED will more precisely define the technical requirements of the Tongo Project and deliver an optimised underground mine design and treatment plant layout. This work will also refine the final capital expenditure estimate and operating cost budgets for the Tongo Project. The FEED program is on track for scheduled completion in the December 2018 quarter.

Activities completed to date include:

  • Drone surveys for detailed mapping of the planned mine layout were flown, and preliminary mine site, plant, office and accommodation layouts were prepared, based on the significant existing infrastructure which includes roads, offices, workshops, stores, accommodation and old plant site.
  • Design of the 50 tonnes per hour (tph) dense media separation (DMS) plant based on a second-hand plant acquired from Octea was completed. The plant will incorporate new scrubbing and crushing units, and a completely new recovery section, incorporating primary and secondary Debtech (De Beers) CDX118CD (dry feed) X-ray machines.
  • Geotechnical and geohydrological fieldwork was undertaken by SRK engineers and confirmed that mine declines for both the Lando and Kundu kimberlites will be accessed by a single 6m x 4m portal entry site at Kundu.
  • Commencement of Environmental monitoring and reporting.
  • Stakeholder engagement and commencement of Community investment initiatives.

In addition, specific site activities included:

  • Upgrading of the gravel road between Mano Junction and the Tongo Project. This road is important to the logistical support for the mine, and travel time between the tarred road and the Tongo Project has been shortened from approximately 90 minutes to 35 minutes.
  • Refurbishment of a 5 tph DMS plant for bulk sampling work, and addition of a dual X-ray recovery system. This plant will be used for processing of existing bulk sample, as well as several thousand tonnes of uncontrolled kimberlite sample which is stockpiled at the Tongo Project. This material will be processed during the September 2018 quarter to deliver initial carats for updated Mineral Resource estimation, and to improve confidence in the diamond revenue model.
  • Dismantling and relocation of the 50 tph production plant from Koidu to the Tongo Project has been completed and refurbishment and re-assembley is due to commence in the September 2018 quarter.
  • Detailed underground mine design will commence in the September 2018 quarter once the resource model has been updated.

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