Tango Mining Limited: Strategic Progress and Diversified Diamond Operations Across Africa
Tango Mining Limited (Tango) has consistently demonstrated a robust commitment to expanding its footprint within the lucrative global diamond market. The company’s strategic initiatives and operational advancements across key African jurisdictions underscore its vision for sustainable growth and value creation. A comprehensive update for the 2018 financial year-end revealed significant progress in its diamond mining and exploration projects spanning the Republic of South Africa, Botswana, Angola, and the recently integrated Republic of Liberia. This diversified portfolio not only mitigates regional risks but also positions Tango to capitalize on varied opportunities within the African diamond sector, from established mining regions to emerging frontiers.
The company’s approach is characterized by a blend of direct operational engagement, strategic partnerships, and a keen eye for high-value assets. These efforts are geared towards enhancing production capabilities, optimizing resource recovery, and unlocking the full potential of its mineral concessions. Investors and stakeholders are keen to follow Tango’s trajectory as it navigates the complexities and immense potential of African diamond mining, striving for operational excellence and a strong return on investment.
Oena Diamond Mine: A High-Value Alluvial Diamond Producer in South Africa
The Oena Diamond Mine, situated in the renowned alluvial diamond fields of the Republic of South Africa, represents a cornerstone of Tango Mining’s operational portfolio. Known historically for its consistent production of large, high-quality diamonds, the Oena project continues to be a strategic asset for the company. The year 2018 marked a significant period of recommissioning and production ramp-up at Oena, showcasing Tango’s ability to execute complex mining operations effectively.
Operational Milestones and Production Excellence
In November 2017, Bluedust 7 Proprietary Limited (Bluedust), the appointed mining contractor, successfully mobilized and commissioned state-of-the-art mining and processing equipment at the Oena site. This critical phase laid the groundwork for a productive year, with Bluedust swiftly recommencing production. Since January 2018, the operations at Oena have yielded a remarkable total of 941 carats, demonstrating the immediate impact of the upgraded infrastructure and operational efficiency.
The primary focus of mining activities has been on the well-established Oena Site, which has consistently delivered promising results. Tango further announced plans to commence operations shortly at the Blokwerf Site, where Bluedust is currently deploying additional equipment. This expansion into new areas within the concession highlights Tango’s proactive strategy to explore and exploit the broader geological potential of the Oena mine, aiming to unlock new reserves and extend the mine’s productive life.
A key differentiator for the Oena project is its proven capacity to produce exceptionally high-value diamonds. This was recently underscored by the recovery of a magnificent 42.26 carat diamond, which subsequently fetched an impressive US$11,267 per carat at sale. Such recoveries significantly enhance the overall revenue profile of the mine and affirm Oena’s status as a premium alluvial diamond producer. The presence of these high-value stones is a testament to the unique geological characteristics of the Oena region, where diamonds often exhibit superior clarity, color, and size.
Resource Optimization and Enhanced Processing Capabilities
Beyond current production, Tango Mining is committed to maximizing resource recovery and enhancing the long-term sustainability of the Oena operations. During the year, the company, through its local subsidiary, African Star Minerals (ASM), strategically acquired an additional pan plant. This advanced processing unit boasts a substantial capacity of 120 tonnes per hour (tph) and is specifically designed to process tailings material left on site from previous mining operations. The ability to reprocess tailings represents a significant opportunity to recover diamonds that were previously missed, transforming what was once waste into a valuable resource.
The commissioning of this new plant commenced in June 2018, and it is now fully prepared to begin processing material. While the commencement of full-scale production from the tailings plant experienced a brief delay, Tango Mining is actively installing the necessary auxiliary equipment to ensure a swift start-up. This initiative not only promises to add a new stream of diamond recovery but also aligns with modern mining practices focused on environmental stewardship and efficient resource utilization.
Investor Relations and Transparency
In a move to streamline communication and provide a more comprehensive overview of its financial performance, Tango Mining announced a shift in its diamond sales reporting for Oena. Moving forward, the company will transition from publishing monthly sales information to quarterly sales reports. This change is intended to offer investors a more holistic view of sales trends and operational performance over longer periods, fostering greater transparency and aligning with industry best practices for reporting within the diamond sector.
Middlepits Project: Unlocking Botswana’s Diamond Potential
Botswana stands as a global leader in diamond production, renowned for its stable mining environment and significant kimberlite and alluvial deposits. Tango Mining’s Middlepits Project, located approximately 470 kilometers southwest of Gaborone, positions the company within this premier diamond-producing nation. The project comprises two highly prospective Prospecting Licenses (PLs), namely PL101 (429 km2) and PL58 (2.3 km2), which have a rich history of exploration by major industry players.
The historical exploration at Middlepits is particularly noteworthy. Between 1974 and 1976, De Beers, a global titan in the diamond industry, conducted extensive exploration activities. Subsequently, Falconbridge explored the area from 1978 to 1980, followed by Southern Africa Minerals Corporation between 1993 and 1997. The involvement of such prominent companies underscores the perceived geological prospectivity of the Middlepits region and suggests the potential for significant diamond discoveries.
Strategic Patience Amidst Licensing Processes
Currently, the renewal of PL101 and PL58 is being managed by Metswedi Mining (Pty) Limited. Tango Mining has been advised that the renewal process is still underway. The finalization of Tango’s transaction and its ability to commence any on-site work are contingent upon the successful renewal of these prospecting licenses. As of the stated date, the PLs had not yet been renewed, which has naturally put a temporary hold on Tango’s operational activities at Middlepits.
Despite the administrative delays, Tango Mining remains strategically patient. The company recognizes that licensing procedures in resource-rich nations can often involve complex and time-consuming bureaucratic processes. However, the inherent geological potential, validated by historical exploration, makes Middlepits an attractive long-term prospect. Once the licenses are successfully renewed, Tango will be positioned to leverage this historical data and initiate its own targeted exploration programs to advance the project and delineate diamond resources.
Moquita Project: A Strategic Alliance in Angola’s Lunda Norte Province
Angola, particularly its Lunda Norte province, is globally recognized for its prolific diamond deposits, making it a critical hub for the diamond industry. Tango Mining has established a significant presence in this region through its Moquita Project, secured via a Services Agreement for Mining and Marketing of Diamonds with Cooperativa Mineira Do Moquita, SCRL (Moquita). This agreement covers a valuable 147 km2 portion of a concession situated approximately 50 kilometers north of Lucapa, nestled within the diamond-rich Lauchimo River basin.
Collaborative Model and Revenue Sharing
The nature of the Services Agreement with Moquita is a testament to Tango’s flexible and adaptable business model. Under this agreement, Tango Mining assumes responsibility for crucial aspects of the operation, including capital expenditures associated with alluvial diamond mine design and equipment acquisition, as well as actively enhancing production efficiencies. This hands-on approach allows Tango to directly influence the project’s operational success and resource recovery rates.
In return for its substantial investment and operational expertise, Tango is entitled to receive a significant 60% share of the proceeds generated from the sale of produced diamonds. This attractive revenue-sharing model provides a strong incentive for Tango to maximize output and achieve optimal economic returns from the Moquita Project, aligning the interests of both partners towards shared success in a highly competitive market.
Leveraging Strategic Funding Partnerships with CC Mining Limited
To further bolster its capabilities and accelerate the development of projects like Moquita, Tango Mining has forged a pivotal strategic funding partnership with CC Mining Limited (CCML). CCML is an integral part of the Consolidated Contractors Company Group, a global powerhouse recognized as one of the world’s largest diversified international engineering and construction companies. With operations spanning over 50 countries across five continents and reporting total revenues of US$6 billion in 2017, the Consolidated Contractors Company Group brings unparalleled financial strength and technical expertise to the table.
This strategic alliance with CCML is far more than just a financial arrangement; it represents a robust technical partnership that significantly de-risks Tango’s projects and provides access to extensive engineering and construction capabilities. Initially, the funding and technical support from CCML have been strategically focused on facilitating the Services Agreement with Moquita, ensuring that the project benefits from substantial capital and world-class operational know-how. This partnership is a clear indicator of Tango’s foresight in securing resources that enable efficient project execution and sustainable growth in the challenging yet rewarding Angolan diamond sector.
Mano River Project: Exploring New Frontiers in Liberia
The Republic of Liberia, an emerging player in the African diamond landscape, holds considerable untapped potential, particularly in its western regions. Tango Mining has strategically positioned itself to explore this potential through the Mano River Project. The company has successfully signed an agreement to acquire an 80% “unencumbered interest” in this promising project, a move that grants Tango significant control and direct benefits from any future discoveries.
The Mano River Project encompasses one recently granted 104.3 km2 diamond mineral exploration license, covering an area within the western part of Liberia. This specific region of Liberia is particularly renowned for two key geological characteristics that are highly attractive to diamond explorers: the widespread occurrence of alluvial diamonds and the known presence of kimberlites. The existence of alluvial deposits indicates the historical weathering and transportation of diamonds, while the presence of kimberlites is crucial as they are the primary source rocks for diamonds. Discovering a primary kimberlite source can lead to significantly larger and more sustained mining operations.
Unlocking Primary and Secondary Diamond Deposits
The acquisition of an 80% unencumbered interest is a strategic advantage for Tango, providing a strong incentive for intensive exploration and development. An “unencumbered” interest means the share is free from liens, claims, or other financial obligations, offering Tango clear ownership and operational control. The initial exploration efforts at Mano River will likely involve systematic sampling, geological mapping, and geophysical surveys to identify potential diamond-bearing gravels and target kimberlite pipes. The ultimate goal is to define economically viable diamond resources that can transition from exploration to future mining operations.
Tango Mining’s entry into Liberia signifies its commitment to expanding its diversified portfolio across Africa, targeting regions with substantial, yet potentially underexplored, diamond endowments. The Mano River Project, with its dual potential for both alluvial and primary kimberlite diamonds, represents a high-growth opportunity that could significantly enhance Tango’s long-term production profile and shareholder value.
Tango Mining’s Holistic Vision for African Diamond Growth
In summary, Tango Mining Limited’s 2018 operational and production updates paint a picture of a dynamic and strategically focused company. From the consistent, high-value output at Oena in South Africa and the disciplined patience at Middlepits in Botswana, to the collaborative powerhouse model at Moquita in Angola, and the frontier exploration in Liberia, Tango is executing a comprehensive strategy to establish itself as a leading mid-tier diamond producer. The emphasis on operational efficiency, resource optimization, and crucial strategic partnerships, particularly with industry giants like CCML, underpins Tango’s resilience and forward-looking approach.
By effectively managing diverse projects across a politically and geologically varied continent, Tango Mining is not only mitigating risks but also capitalizing on unique regional strengths. The company’s commitment to both current production and future exploration, coupled with its robust financial and technical alliances, positions it for sustained growth in the competitive global diamond market. Tango Mining is poised to continue unlocking significant value from its African assets, delivering impressive returns to its stakeholders and contributing positively to the economies of the host nations.