Kagem Emerald Mine, Zambia

Overview

The Kagem emerald mine is the world’s single largest producer of emeralds and accounts for approximately 20% of global emerald production. It covers an area of approximately 41 square kilometres and is located in the central part of the Ndola Rural Emerald Restricted Area (“NRERA”), in the Copperbelt Province of Zambia.

Key facts

Location Copperbelt Province, Zambia
Acquisition by Gemfields 2008
Ownership structure 75% Gemfields, 25% Government of Zambia
Gemstones Emeralds and beryl
Mining method Open-pit (Fwaya-Fwaya–Chama)
Potential Mine Life Underground – Including 20 years

Geology

The Kafubu emerald deposits are situated in the NRERA which is located in the Copperbelt Province in northern Zambia, and covers an area of approximately 700 square kilometres. The NRERA encompasses over 520 licences, of which the Kagem licence, 14105-HQ-LGM (GL713), is the largest at 41 square kilometres. The geology of the Copperbelt Province around the NRERA consists of the Neo-Proterozoic Katanga Supergroup, which can be several kilometres thick in places. The Katanga Supergroup is underlain by the Muva Supergroup, which lies un-conformably on top of granites, amphibolite gneisses and quartz-biotite schists of the Kufubu Basement Complex (Palaeoproterozoic). The whole suite of rocks is deformed into a series of complexly folded synformal structures.

The rocks containing the Kafubu deposits consist predominantly of quartzites and quartz-mica schists of the Proterozoic Muva Supergroup which are sandwiched between granite gneisses of the Basement Complex and meta-sediments of the Katanga Super group which hosts the copper - cobalt deposits of the Zambian Copperbelt. Sub-concordant bodies of amphibolite and ultramafic rock (flows, sills or tuffs) also occur within the Muva schists. The ultramafics, which vary in thickness from 20 metres to 140 metres, have been altered by metamorphism and hydrothermal activity into talc-chlorite-tremolite magnetite schist (locally referred to as TMS) or talc-biotite schist (TBS). The amphibolites have also suffered varying degrees of alteration to biotite–actinolite schists.

The emerald and beryl mineralisation is associated with pegmatites, which crosscut the schists, forming metasomatic reaction zones, which host the emerald and beryl. Three main pegmatite trends observed within the Kagem licence, namely north to south, northwest to southeast and east to west. These pegmatite dykes and associated quartz tourmaline veins are frequently rimmed by metasomatic reaction zones up to 5 metres thick that are characterized by an abundance of coarse foliated black to bronzy biotite with porphyroblasts of tourmaline or actinolite and crystals or clusters of beryl and/or emerald.

Open-pit mining

The Kagem emerald mine is currently an open-pit operation, approximately 105 metres deep and 900 metres long. Overburden and waste material is mined in phases to expose the ore bodies for processing. 

Kagem is in the process of a high wall pushback programme, which is extending the pit, in its fourth phase, with a further 75 metres on the western side of the main Chama pit. This work is being carried out using both in-house capability and through a third party contractor. A 17 month programme has been agreed with the contractor, ending in September 2015. In-house waste removal will be carried out over 34 months, ending in February 2017. The pushback programme provides access to new areas of ore for future production and seeks to increase the overall rate of ore mining.

Safety

Gemfields has maintained an excellent safety record at Kagem, having achieved three million contiguous shifts free of reportable injuries since taking over responsibility for the mine.  The Mines Safety Department of Zambia awarded Kagem with a Certificate of Commendation in 2012 and it is a true testament to the level of professionalism adopted by Kagem that this standard has been maintained.

Mine Plan

The FS was driven in part by the increasing amounts of waste being stripped in the open pit, a trend which is likely to continue and as a result of which underground operations potentially become more cost effective in the medium term. Studies have confirmed that the most appropriate access option is via a decline shaft (at approximately 15 degrees) from the north end of the current open pit. The decline is expected to be 3.5 metres high x 3.5 metres wide and would be driven by hydraulic jumbos supported by diesel loaders and 20 tonne trucks. The underground mine would be developed using a series of strike drives through the ore body. These drives will provide access to the stopes resulting in early stage production. Ventilation will be provided initially by forcing air into the decline via a fan at the entrance. Thereafter, breakthroughs will be made into the existing workings to form a "flow-through circuit" allowing larger volumes of air. The next stage would be the construction of a ventilation shaft that would also provide additional egress to surface.

The FS envisages that the underground mine would produce 120,000 tonnes per annum of ore to target an annual production rate of 34 million carats of emerald and beryl. Underground mining would follow a similar approach to the open pit operation whereby teams of trained pickers will remove any gemstones that are clearly visible post blasting. Thereafter, the remaining ore would be trucked to the washing plant for sorting and sizing.

Gemfields has established and is operating a trial underground mining operation at Kagem in order to get a higher degree of confidence that a commercial scale underground mining project could be safely and effectively implemented on the Zambian emerald belts.

Exploration

Exploration activities at Kagem are currently concentrated on the Fibolele and Libwente emerald belts, carried out in 2012, which consisted of 3,000 metres of core drilling, confirmed the down-dip extension of the TMS and pegmatites to a vertical depth of at least 200 metres from surface. Exploration in 2013 continued with a total of 10,534 metres of drill core recovered from 112 boreholes.

The drilling results allowed a bulk sample pit in the Fibolele area to be defined. Bulk sampling commenced in September 2012 and as at 30 June 2013 the pit had been opened up along 170 metres of strike length. The delineated TMS body has been exposed together with associated quartz tourmaline veins, which are responsible for the emerald mineralisation. Three distinct mineralisation zones have been identified and developed to study the dynamics and yield of the ore. A trial mining operation commenced in 2014 with the Fibolele pit expected to benefit from a stripping ratio of approximately 40:1 as a result of the TMS being near the surface, allowing for a relatively low cost and reflecting the small scale of the initial operations.

Mineral Resources

Kagem JORC Resource and Reserves update

Measured, Indicated and Inferred Mineral Resource of 1.8 billion carats (“bct”) of emerald and beryl at an in-situ grade of 281ct/t
Open pit mine plan until 2040
Chama LoM of 25 years
Fibolele LoM of seven years
Average annual production of emerald and beryl of 44.7mct over the LoM
Robust economics show a post-tax NPV of US$520m (based on a 10% discount rate)
Proved and Probable Ore Reserves of 1.1bct of emerald and beryl at a diluted ore grade of 291ct/t
Expansion of owner operated mining fleet to support increased rate of ore mining, and the ongoing bulk sampling of additional exploration pits

       
Classification             Tonnage (kt)        Grade (ct/t)       Contained Carats
Proved and Probable            
Chama 3,659           300          1,097,826
Fibolele 177           103            18,312
Total 3,836            291          1,116,138
       
Classification             Tonnage (kt)        Grade (ct/t)       Contained Carats
Measured 800           345            290,000
Indicated 3,970           335          1,330,300
Measured & Indicated 4,770           340          1,620,300
Inferred 1,650           110             181,200
Total 6,420           281          1,801,500
​Source : SRK, Kagem 100% basis

FY16 results

KAGEM Annual Production Summary Units Year to 30 June 2010 Year to 30 June 2011 Year to 30 June 2012 Year to 30 June 2013 Year to 30 June 2014 Year to 30 June 2015 Year to 30 June 2016
Gemstone Production (Emerald + Beryl) million carats 17.4 33.0 21.1 30.0 20.2 30.1 30.0
Ore Production (Reaction Zone) thousand tonnes 60.8 69.1 102.9 105.9 80.0 124.3 164
Grade (Emerald + Beryl/Reaction Zone) carats/ tonne 286 478 205 283 253 242 241
Waste Mined (including TMS) million tonnes 2.5 3.9 8.7 9.5 7.3 14.9 11
Total Rock Handling   2.6 4.0 8.8 9.6 7.4 15.0 12.6
Stripping ratio   42 56 85 90 91 120 100