Newfield Resources has locked in just shy of $25m from 71m shares issued as part of a rights issue at 35c to advance its Tongo diamond project in Sierra Leone. The company’s share price traded as high as 47c during intraday trading today and Newfield will now look to place the shortfall at the original price of 35c with a view to banking another $25m.
The Tongo diamond project was subjected to a front-end engineering and design study in 2019 that modelled a 1.1 million carat initial ore reserve. An initial eight-year initial life of mine was contemplated and peak annual diamond production of over 250,000 carats is anticipated by Newfield in the fifth year.
Average operating costs are estimated at US$115 per carat.
The Tongo project has a combined JORC compliant diamond resource estimate of 8.3 million carats. Within the Tongo project, the Kundu prospect houses 2.8m carats grading a healthy 3.2 carats per tonne, or “CPT” valued at US$194 per carat. The Lando prospect, also within the Tongo project, accommodates 3m carats going 2.9cpt and has a diamond value of US$194 per carat as well.
Underground development of the return airway at the Tongo diamond project continued during the September 2021 quarter in addition to earthworks and civil construction for the company’s 25 tonne per hour diamond processing plant.
A security building directly adjacent to the panned final recovery building has also commenced construction with the plant, final recovery and security building all expecting to be completed during the first quarter of 2022. The upgrades are set to line up perfectly with a proposed increase in production from the underground mine also scheduled to commence in the first quarter of 2022.
The Tongo mine development combines kimberlite dyke hosted diamond resources on two adjacent mining licences that cover over 134 square kilometres and host 11 known kimberlites.
Diamond followers have long known that Sierra Leone plays host to multiple significant diamond deposits. With the capital raised from the recent offer, the Tongo mine development will have the funding required to kick into production and Newfield can join the long list of diamond producers in the country early next year.
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By Matt Birney
