Type Private company Products Diamonds Website www.koiduholdings.com Founded 2003 Parent organization BSG Resources Limited | Industry Diamond mining Subsidiaries None Headquarters Freetown Number of employees 1,300 | |
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Key people Patrick Saada, Chairman
Jan Joubert, Chief Executive
Ibrahim Kamara, Chief Communications Officer | ||
Koidu Holdings S.A. (Societe Anonyme) is a diamond mining company operating in the West African country of Sierra Leone. It is wholly owned by BSG Resources Limited through its subsidiary BSGR Diamonds Limited. BSG Resources is a diversified natural resource arm of the Beny Steinmetz Group of Companies, which also has interests in real estate, capital markets and diamonds.
Contents
Formation
The company was formed in September 2003 as a joint venture between the previous mineral right holders Energem Resources Inc and BSG Resources subsidiary Magma Diamond Resources Ltd. After a number of changes in the shareholding structure, BSG Diamonds progressively increased its stake in Koidu Holdings to 100% by February 2007.
Initial Operations
After the end of the civil war in Sierra Leone in 2002 – and once the country had joined as a participant of the Kimberley Process Certification Scheme in 2003 – Koidu Holdings was the first commercial diamond mining company to invest in the development of the resource sector in Sierra Leone, focusing initially on the kimberlite deposits at Koidu.
Corporate Identity
Koidu Holdings' first logo, designed in 2003, was derived from the silhouette of a young cotton tree growing near the site selected for the construction of the dense media separation plant at the Koidu Kimberlite Project. The symbolism associated locally with cotton trees is strength and prosperity. In line with this, management's vision is to become the company of choice – to host, invest in and work for – in Sierra Leone.
Koidu Holdings completed the feasibility study for its Expansion Project and began a major growth phase towards the end of 2010, launching a new corporate identity, modelling the new identity on the iconic cotton tree.
Mining Leases
Koidu Holdings holds two mining leases in Sierra Leone: the Koidu Kimberlite Project and the Tonguma Project.
Koidu Kimberlite Project
The Koidu Kimberlite Project mining lease, located within the Tankoro Chiefdom of the Kono District, measures approximately 4.9 km2 and hosts two small kimberlite pipes, No. 1 Pipe (K1) and No. 2 Pipe (K2), and four kimberlite dyke zones, along which four small blows or enlargements have been discovered.
The company inherited the initial 25-year mining lease agreement, signed in 1995, from the previous mineral right holders. After the second successful post-war democratic election in 2007, when the All People's Congress unseated the Sierra Leone People's Party, the new government undertook to review all mining agreements in the country. The Mining Review Process began in July 2008 and Koidu Holdings' mining lease for the Koidu Kimberlite Project was tackled first. A new mining lease agreement was entered into between the Republic of Sierra Leone and Koidu Holdings on 6 September 2010. The term of the mining lease was extended to 22 July 2030 and may be renewed for a further period of 15 years.
Tonguma Project
The Tonguma Project mining lease is located about 68 km south of Koidu, in the Lower Bambara Chiefdom, Kenema District, of the Eastern Province. The mining lease area is approximately 142.07 km2 and contains several narrow kimberlite dyke zones. The project consists of the original Tongo Diamond Field Project mining lease, to which the area covered by the Panguma Exploration licence was added.
In May 2004, after successfully competing in a tender process for the rights to the Tongo Diamond Field exploration licence, Koidu Holdings initiated the refurbishment of the road between Koidu and Tongo, and undertook a bulk sampling programme on the dyke zones to verify historical grades.
By September 2007, the company had completed a large-scale bulk sampling programme and a mining feasibility study which demonstrated that an economically viable dyke mining operation could be developed at Tongo. This prompted the company to apply for a mining lease for the Tongo Diamond Field Project, for which it received approval on 11 July 2008.
The Panguma exploration licence is adjacent to the Tongo Diamond Field mining lease; it measures approximately 53.57 km2 and covers the strike extensions of northern-most Tongo dyke zones. Koidu Holdings submitted an application to Government to have the Panguma exploration licence incorporated into the Tongo Diamond Field Project mining lease agreement and developed plans to access the Panguma dykes from the underground infrastructure to be developed on the Tongo property. The application was approved and the combined Tongo-Panguma Project became known as the Tonguma Project.
Koidu Kimberlite Project
Development of the mine commenced in 2003, with the construction of a 50 tonne per hour dense media separation (DMS) plant and mining infrastructure required for bulk sampling and trial mining of K1 and K2. Processing of the first kimberlite from K1 began in January 2004 and continued until mid-2004, when sampling switched to K2 to allow for waste stripping and establishment of the headgear, hoist, winder and associated infrastructure at the collar of the planned vertical pit at K1.
From August 2005 to December 2007, the mine focused exclusively on extracting ore from the K1 pit, establishing the largest and deepest excavation of its kind world-wide while attempting to minimise the impact on the nearby Koidu community.
Given the limited lifespan of the vertical pit (maximum 80 m from collar), the company embarked on an exploration core drilling programme to delineate sufficient resources for at least the remaining life of the mining lease period. From 2003 to 2008, four phases of core drilling were completed; once the magnitude of potentially mineable resources began to emerge, desktop studies considering the possible scenarios for the future expansion of the mining operation were undertaken.
When the full extent of the diamond resources at Koidu was understood towards the end of 2008, the company entered the prefeasibility study stage, contracting industry leaders in resource estimation, geohydrology, mine design and various other disciplines to ultimately bring the project to a bankable feasibility study level.
After significant additional bulk sampling exercises in 2009 and 2010 (both from large-scale surface excavations and large-diameter drilling programmes on K2, Dyke Zones A and B, as well as the four blows intended to form part of the life-of-mine plan), the resource statement was signed off by diamond specialists Mineral Services Canada in their capacity as independent competent persons. Indicated resources from K1, K2 and Blow B3 amount to 4.2 million tonnes at an average grade of 0.45 ct/t. Inferred resources from K1, K2, Blow A, Blow B1, dyke Zone A and B amount to 10.12 million tonnes at an average grade of 0.54 ct/t.
The feasibility study demonstrated that the optimal project plan for the expansion of operations at Koidu was technically and economically viable. The plan includes mining both kimberlite pipes by open pit methods, to a depth of approximately 310 m below surface for K1 (March 2011 to September 2016) and approximately 244 m below surface for K2 (from September 2010 to October 2015), at which time the transition to underground mining methods would be made. Taking into account the additional production that could be derived by mining the kimberlite dykes and blows from underground, an optimal plant size of 180 tph has been selected, mining at a rate of 100,000 tonnes of ore per month and 1.4 million tonnes of waste per month.
The mine will continue producing with the existing 50 tonne per hour plant until the new plant is erected, commissioned and has ramped up to full production (by the end of June 2012), after which the existing plant will be dismantled and relocated to the Tongo Diamond Field Project south of Koidu.
The five-year open pit mining phase of the operation (to the end of 2015) will be followed by underground mining of both kimberlite pipes, as well as the dyke zones and blows, for the remainder of the life of the mine. Construction of the underground access will begin early in 2012 with first ore being extracted from underground in 2016.
The project is expected to increase production from the two open pits from about 10,000 carats per month currently to an average of 45,000 carats per month from 2012 to 2015, tapering off as production from underground comes on line and the operation is maintained at 100,000 tonnes processed per month.
Tonguma Project
While the approval of the Tongo mining lease was announced in July 2008, Koidu Holdings had to delay development of the Tongo underground mine until the Government of Sierra Leone had finalised its Mining Review Process. The company continued to evaluate the geological potential on the Tongo property, as well as on the adjacent Panguma property, with ground geophysical surveys and core drilling of selected targets. Additional drilling programmes began in August 2011, to support of the feasibility study currently in progress.
From May 2004 to May 2007, activities had been focused on the refurbishment of the road between Koidu and Tongo and bulk sampling of the Lando and Kundu kimberlite dykes zones. These activities were carried out in parallel, so that the road would be completed by the time the bulk samples were ready to be transported to Koidu for processing. Additional work, including helicopter-borne aerial photography, an environmental base-line audit, QuickBird satellite imagery and interpretation, geophysical surveys and petrography were also undertaken.