Koidu Holdings
Encyclopedia
Koidu Holdings S.A. 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.
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.
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.
, 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.
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.
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.
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.
Sierra Leone
Sierra Leone , officially the Republic of Sierra Leone, is a country in West Africa. It is bordered by Guinea to the north and east, Liberia to the southeast, and the Atlantic Ocean to the west and southwest. Sierra Leone covers a total area of and has an estimated population between 5.4 and 6.4...
. 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
Beny Steinmetz
Beny Steinmetz is an Israeli businessman. His portfolio is in diamond-mining and real estate.-Biography:He inherited the Geneva-based Steinmetz Diamond Group from his father. He is the CEO of the Beny Steinmetz Resource Group, also based in Geneva....
Group of Companies, which also has interests in real estate, capital markets and diamonds.
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 LeoneSierra Leone Civil War
The Sierra Leone Civil War began on 23 March 1991 when the Revolutionary United Front , with support from the special forces of Charles Taylor’s National Patriotic Front of Liberia , intervened in Sierra Leone in an attempt to overthrow the Joseph Momoh government...
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 treeCotton Tree (Sierra Leone)
The Cotton Tree is an historic symbol of Freetown, the capital city of Sierra Leone. According to legend, the "Cotton Tree" gained importance in 1792 when a group of former African American slaves, who had gained their freedom by fighting for the British during the American War of Independence,...
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 DistrictKono District
Kono District is a district in the Eastern Province of Sierra Leone. Its capital and largest city is Koidu Town. The other major towns in the district include Yengema, Tombodu, Motema, Jaiama-Nimokoro and Sewafe. Kono District is the largest diamond producer in Sierra Leone.The population of Kono...
, measures approximately 4.9 km2 and hosts two small kimberlite pipes, No. 1 Pipe (K1) and No. 2 Pipe (K2), and four kimberlite dyke
Dike (geology)
A dike or dyke in geology is a type of sheet intrusion referring to any geologic body that cuts discordantly across* planar wall rock structures, such as bedding or foliation...
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
All People's Congress
The All People's Congress is one of the two major political parties in Sierra Leone, the other is the Sierra Leone People's Party . The party was founded in 1960 by Pa Mucktarru Kallay, Allieu Badarr Koroma,Alhaji Sheik Gibril Sesay C A Kamara-Taylor, S A T Koroma and Abu Bakarr S Bangura...
unseated the Sierra Leone People's Party
Sierra Leone People's Party
Sierra Leone People's Party is one of the two major political parties in Sierra Leone, along with the All People's Congress .-Formation:...
, 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 BambaraBambara
The Bambara are a Mandé people living in west Africa, primarily in Mali but also in Guinea, Burkina Faso and Senegal. They are considered to be amongst the largest Mandé ethnic groups, and are the dominant Mandé group in Mali, with 80% of the population speaking the Bambara language, regardless of...
Chiefdom, Kenema District
Kenema District
Kenema District is a district in the Eastern Province of Sierra Leone. Its capital and largest city is Kenema, which is also the third largest city in Sierra Leone. The other major towns in the district include Tongo and Blama. The district is the most populous district in the Eastern province with...
, 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
Tongo, Sierra Leone
Tongoma, also known as Tongo, is a diamond mining town and the second largest city in Kenema District, located in the Eastern Province of Sierra Leone. The population of the 60-sq.-mile city is 44,376...
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
Tongo, Sierra Leone
Tongoma, also known as Tongo, is a diamond mining town and the second largest city in Kenema District, located in the Eastern Province of Sierra Leone. The population of the 60-sq.-mile city is 44,376...
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
Feasibility study
Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of the existing business or proposed venture, opportunities and threats as presented by the environment, the resources required to carry through, and ultimately the prospects for success. In its simplest...
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.