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PRESS RELEASE
 5 JANUARY 2010
Kao Kimberlite Pipe, Lesotho - Mining Agreement and Lease

Batla Minerals SA (EURONEXT: MLBAT)


Batla Minerals SA ("Batla" or the "Company") announces that the Government of the Kingdom of Lesotho ("Government") has transferred the mining lease to the Kao Kimberlite Pipe ("Kao") to Namakwa Batla Diamonds Pty Ltd ("NBDL"), the Company's joint venture with Namakwa Diamonds Limited ("Namakwa Diamonds"), the Government and Lesotho investors. The Government has also entered into a mining agreement with NBDL (together, the "transaction"). African Alliance Lesotho (Pty) Limited provided corporate finance advice to NBDL.


Highlights:

  • Batla's first kimberlite
  • Total resources of 173 million tons containing an estimated 12.4 million carats
  • Phase I expected to produce 700,000 carats
  • Life of mine in excess of 40 years
  • Further expansion of Batla's footprint across Southern Africa


Pursuant to the transaction, NBDL has agreed to settle the claims of certain Lesotho creditors of the previous incumbent of the Kao mining lease up to a maximum aggregate amount of ZAR 50.6m (US$6.6m). These claims remain subject to verification by the appointed liquidators and potential reduction.

Kao's main kimberlite pipe is the largest in Lesotho and the fourth largest in Southern Africa at 19.8 hectares. It is situated at an altitude of 2,500m approximately 200km north of Maseru. It lies within a 20km radius of the diamond producing Letseng and Liqhobong mines. Resources for the Kao Pipe total 173 million tons (27Mt measured, 63Mt indicated and 83Mt inferred) containing an estimated 12.4 million carats.


The transaction provides four distinct advantages for Batla:

  1. A recognized kimberlite asset in Lesotho - an established centre for kimberlite mining with proven infrastructure and logistical capabilities;
  2. Batla has secured a strategic partnership with Namakwa Diamonds;
  3. The Kao project will compliment Batla's existing Lesotho-based operation of wholly owned subsidiary, Alluvial Venture, which is the contracted operator for the weathered kimberlite deposits at the nearby producing Letseng mine; and
  4. Batla's expertise in weathered kimberlites will ensure that the lead time to production will be kept to a minimum.


The Company intends to develop Kao from its current internal resources and management anticipate 10M tons of kimberlite being processed for the recovery of 700,000 carats, over a five-year period. Thereafter, it is planned to ramp up production to 5M tons per annum with an expected life of mine in excess of 40 years.

The transaction underlines Batla's strategy of acquiring low-risk, high-quality assets with a short lead-time to production.

Namakwa Diamonds has retained the services of Keith Whitelock as Chief Technical Officer (Operations). Keith, whose initial responsibilities will include heading up the Kao project, has over 40 years' experience in diamond projects covering all aspects of locating, bulk sampling and mining of both alluvial and kimberlite deposits. Keith was employed by the original discoverer of Kao and the three other kimberlite pipes in the same area: Letseng, Liqhobong and Mothae. He worked with DeBeers for 21 years and joins Namakwa Diamonds after 14 years as CEO of Letseng Diamonds during which time he led the constructing, commissioning and operating of the Letseng Mine.


For further information, please contact Batla Minerals SA: 

Johannes van der Walt - Tel: +27 21 887 9184

Jean Retief - Tel: +27 21 887 9184

Arnaud Vercruysee - Tel: +33 67 738 6672
About the involved parties:

About Batla Minerals SA: 

Batla Minerals is an established diamond mining company listed on the NYSE Euronext (Marche Libre) in France. Alluvial Ventures, Batla Minerals' wholly owned subsidiary, conducts contract diamond mining in Lesotho. The business has current operations in Lesotho and South Africa. New ventures are being sought across Southern Africa and more specifically in Namibia, Botswana and Mozambique. These new ventures are not limited to diamond extraction and include mineral deposits in the energy, precious and base metals categories.


About Namakwa Diamonds:

Namakwa Diamonds is a vertically integrated diamond resource group focused on diamond mining and beneficiation across Southern Africa. The company has a diversified portfolio of diamond projects, which include distinct diamond resource target areas now located in five African countries, namely: South Africa; Lesotho; the Democratic Republic of Congo; Namibia and Angola. The company's projects are located within historically prospective geological environments.

Alluvial diamond deposits, including marine, have to date constituted the primary focus of the company, whilst kimberlite opportunities are considered if they are at an advanced stage of development, consistent with Namakwa Diamonds' philosophy of a short resource delivery time.

The company adds value to its mining operations with a well-established beneficiation division, developed over a 30-year period, with operations in South Africa, the Democratic Republic of Congo and Israel, allowing Namakwa Diamonds to capitalise on margins across the diamond value chain.


About Namakwa Batla Diamonds (Pty) Ltd:

Namakwa Batla Diamonds is a Lesotho-based company and a joint venture between Namakwa Diamonds and Batla Minerals (62.5%), certain Lesotho investors (12.5%) and the Government of the Kingdom of Lesotho (25%). Namakwa Diamonds maintains board and shareholder control.


About Lesotho and the Lesotho investors:

Lesotho is a constitutional monarchy, which is entirely surrounded by the Republic of South Africa. Lesotho's natural resources include sand, clay and building stone but - apart from water - by far its chief resource is diamonds. There are 33 kimberlite pipes and 140 kimberlite dykes within Lesotho and the area has a well-developed infrastructure designed to aid diamond mining. Lesotho meets most of its power requirements from its hydroelectric developments, but supplements this by importing power from South Africa when required. The company has contracted with certain Lesotho investors to help provide a sustained future for the community around the Kao project.


About African Alliance Group:

Our advisor, AA Group, is a 16 year old pan African investment bank with 30 offices and an operating presence in 19 African countries, with a focus on advisory, asset management, stock broking and private equity. Clients of AA include international investors, national governments, municipalities, parastatals, pension funds and large-to-medium private companies.