Obtala Resources gets Konoma diamond production underway
08 February 2010
Obtala Resources has kicked off alluvial diamond mining at the Konoma project in Sierra Leone, which it acquired from fellow AIM listed group African Minerals in January.
Obtala said it would shortly begin recovering stones from the mine and was sticking to its plan of becoming a revenue-generating business by the second quarter of 2010.
Under the terms of last month’s deal, Obtala swapped a 9.9% stake in itself for the mining arm of African Minerals – the group run by ex-Regal Petroleum boss Frank Timis. The transaction was valued at £4.3 million.
Since then, Obtala has completed a review and maintenance programme of both the DMS (dense medium separation) plant and the earth moving equipment. Site infrastructure and access is being repaired and upgraded, and key senior on-site staff have been appointed. Internal security procedures have also been upgraded and put in place.
Mining is being conducted at two separate locations, Bolima and Bakidu, both upstream along the Bafi River from the main mine camp. Obtala has brought in two local prospecting teams to evaluate additional diamondiferous gravel deposits ahead of the mechanised mining fleet.
Frank Scolaro, the chairman of Obtala, said: “The board of Obtala remains confident that focused and precise low-cost mining of the alluvial diamond deposits in Sierra Leone will achieve the corporate objective of creating profitability and enhancing value of the overall portfolio of our projects.”
Shortly after completing the deal with African Minerals, Obtala signed a distribution deal with Hong Kong based VL Holdings that will see VL act as the sole distributor for the diamonds produced from Konoma.
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