Approval for African Diamonds deal

Irish-listed exploration group African Diamonds said today the Government of Botswana has approved the sale of De Beer's 71 per cent stake in the AK6 diamond discovery in Orapa.

The company last month confirmed it had brokered a deal to transfer De Beers’ stake in AK6 to Lucara, a Toronto listed firm controlled by the Lundin group.

The John Teeling led African Diamonds currently holds a 29 per cent stake in AK6 and the Irish company intends to take up an option to increase its interest to 40 per cent next year.

Construction of the mine is now expected to begin in mid-2010, with start up in late 2011 at 400,000 carats a year, rising to an expected 1 million carats by the following year.

African Diamonds said a valuation of the AK6 diamonds recovered during exploration will be undertaken during the third week of January 2010.

Earlier this week the group said the valuation of the discovery could be greater than previously reported.

African Diamonds said the valuation methods of AK6 diamonds used by De Beers valued broken stones as broken diamonds and downplayed the impact of the rare type II diamonds contained in the South Lobe of AK6. A full evaluation of all diamonds recovered would be completed in early 2010.

Type II diamonds contain little or no nitrogen so they tend to be pure, colourless, class D, E or F colour diamonds.

A 2008 Letseng type II stone of 478 carats sold for $38,500 a carat, while a recent Sotheby's auction saw a 29.53 carat D colour type II cut diamond sold for $118,000 a carat.