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More spectacularly large diamonds at Karowe

With an approval from the Department of Environmental Affairs for the extraction of samples from the BK02 kimberlite, Vancouver-based Lucara Diamond, is upbeat the permit acquired will help maintain its industry enviable  reputation of covering exceptionally large diamonds from its Karowe mine.

Spectacular diamond finds just keep coming from the Lucara’s Karowe Mine in Botswana. The latest discoveries include a 336-carat, type IIa stone as well as diamonds weighing 184 carats, 94 carats and 86 carats..Over the past three years, since the recovery of the first large diamond from the mine, Lucara has recovered 216 diamonds that have sold for more than $250,000 each.

Twelve of these diamonds sold for more than $5 million each. Lucara Diamond Corp.’s first 2015 tender of exceptional stones from the Karowe mine realized $68.71 million or $41,028 per carat (p/c). The special tender of Karowe diamonds consisted of 14 single stone lots, totaling 1,674 carats.

The highlight of the sale was a 341.9-carat Type IIa diamond that sold for $20.55 million, or $60,114 p/c. Another high value stone was a 269.7-carat diamond that sold for $16.54 million or $61,304 p/c. Twelve of the diamonds sold for more than $1 million, including five stones that were sold for in excess of $4 million.

The amazing result was hailed by the company president William Lamb as demonstrating not just the sustainable quality of the diamonds being produced, but also the robustness of the exceptional stone market.
 
At the time, Lucara president William Lamb was happy that “the sales values achieved for the two large stones demonstrates the quality of diamonds which the south lobe is producing.”

 Lucara has also announced the recovery of a 12-carat pale pink diamond whose colour will be confirmed once it has been cleaned. The ongoing recovery of large exceptional diamonds from the Karowe mine is said to continue to support the resource estimates.
 
 Lamb says the resource has consistently produced significant value for the company and its shareholders and the ongoing recovery of high value stones sets Lucara apart from most other diamond producers."

The Karowe Mine is based on the AK6 kimberlite pipe, which is part of the Orapa Kimberlite Field ("OKF") in Botswana. The bedrock of the region is covered by a thin veneer of wind-blown Kalahari sand and exposure is very poor. Rocks close to surface are often extensively calcretised and silcretised due to prolonged exposure on a late Tertiary erosion surface (the African Surface) which approximates to the present day land surface.


IDEX online reports that a bulk sample has been constructed and commissioned and it is expected that exploration sample processing will commence in November, with initial results to follow before the end of the year.
 
The sample is anticipated to be around 5,000 tons, and the contract for extraction and transport is already in place, with earth moving equipment being mobilized at the BK02 kimberlite within the next two weeks.
 
The company was awarded two high-potential exploration licenses in 2014, which are known to host at least three diamondiferous kimberlites – BK02, AK11 and AK12. Applications for mineral extraction from AK11 and AK12 are in progress.
 

Lamb is excited that the receipt of the permits is a positive step forward in the company’s resource extension campaign. “|We are excited about the prospects of these licenses based on the historical work which had previously been conducted on the property,"  IDEX online quotes president and CEO William Lamb
 

The OKF lies on the northern edge of the Central Kalahari Karoo Basin along which the Karoo succession dips very gently to the SSW and off-laps against the Precambrian rocks which occur at shallow depth within the Makgadikgadi Depression.

The OKF includes at least 83 kimberlite bodies, varying in size from insignificant dykes to the 110 ha AK1 kimberlite which is Debswana's Orapa Mine. All kimberlite intrusions are of post-Karoo age.

Of the 83 known kimberlite bodies, five (AK1, BK9, DK1, DK2 and AK6 which is the Karowe Mine) have been or are currently being mined, and a further four (BK1, BK11, BK12 and BK15) are recognized as potentially economic deposits.



The country rock at the Karowe Mine is sub-outcropping flood basalt of the Stormberg Lava Group (approximately 130 m thick on the Karowe property) which is underlain by a condensed sequence of Upper Carboniferous to Triassic sedimentary rocks of the Karoo Supergroup(approximately 245 m thick on the Karowe property).

The Karoo sequence overlies granitic basement.

 AK6 is a roughly north-south elongate kimberlite body with a near surface expression of ~3.3 ha and a maximum area of approximately 7 ha at ~120 m below surface. The body comprises three geologically distinct, coalescing pipes that taper with depth.

These pipes are referred to as the North Lobe, Centre Lobe, and South Lobe.

 The AK6 kimberlite is an opaque-mineral-rich monticellite kimberlite, texturally classified primarily as fragmental volcaniclastic kimberlite with lesser macrocrystic hypabyssal facies kimberlite of the Group 1 variety.

The nature of the kimberlite differs between each lobe, with distinctions apparent in the textural characteristics, relative proportion of internal country-rock dilution, and degree or extent of weathering. The South Lobe is considered to be distinctly different from the North and Centre Lobes which are similar to each other in terms of their geological characteristics.

The North and Centre Lobes exhibit internal textural complexity (reflected in apparent variations in degree of fragmentation and proportions of country-rock xenoliths) whereas the bulk of the South Lobe is more massive and internally homogeneous.



The upper parts of all three lobes contain severely calcretised and silcretised rock. This zone is typically approximately 10 m in thickness, but can be up to 20 m in places. Beneath the calcrete and silcrete, the kimberlite is highly weathered.

The intensity of weathering decreases with depth with fresh kimberlite generally intersected at about 70 m to 90 m below present day surface.

A unit within the South Lobe (a variety of M/PK(S)) has been found to be hard, and to produce a very large DMS concentrate primarily as a consequence of an abundance of fresh olivine in the kimberlite update on its new exploration assets located on trend with the Company's Karowe Mine in Botswana.

The Company was awarded two high-potential exploration licences in 2014. These licences host at least three known diamondiferous kimberlites, BK02, AK11 and AK12.

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Business

New study reveals why youth entrepreneurs are failing

21st July 2022
Youth

The recent study on youth entrepreneurship in Botswana has identified difficult access to funding, land, machinery, lack of entrepreneurial mindset and proper training as serious challenges that continue to hamper youth entrepreneurship development in this country.

The study conducted by Alliance for African Partnership (AAP) in collaboration with University of Botswana has confirmed that despite the government and private sector multi-billion pula entrepreneurship development initiatives, many young people in Botswana continue to fail to grow their businesses into sustainable and successful companies that can help reduce unemployment.

University of Botswana researchers Gaofetege Ganamotse and Rudolph Boy who compiled findings in the 2022 study report for Botswana stated that as part of the study interviews were conducted with successful youth entrepreneurs to understand their critical success factors.

According to the researchers other participants were community leaders, business mentors, Ministry of Trade and Industry, Ministry of Youth, Gender, Sport and Culture, financial institutions, higher education institutions, non-governmental institutions, policymakers, private organizations, and support structures such as legal and technical experts and accountants who were interviewed to understand how they facilitate successful youth entrepreneurship.

The researchers said they found that although Botswana government is perceived as the most supportive to businesses when compared to other governments in sub-Saharan Africa, youth entrepreneurs still face challenges when accessing government funding. “Several finance-related challenges were identified by youth entrepreneurs. Some respondents lamented the lack of access to start-up finance, whereas others mentioned lack of access to infrastructure.”

The researchers stated that in Botswana entrepreneurship is not yet perceived as a field or career of choice by many youth “Participants in the study emphasized that the many youth are more of necessity entrepreneurs, seeing business venturing as a “fall back. Other facilitators mentioned that some youth do not display creativity, mind-blowing innovative solutions, and business management skills. Some youth entrepreneurs like to take shortcuts like selling sweets or muffins.”

According to the researchers, some of the youth do not display perseverance when they are faced with adversity in business. “Young people lack of an entrepreneurial mindset is a common challenge among youth in business. Some have a mindset focused on free services, handouts, and rapid gains. They want overnight success. As such, they give up easily when faced with challenges. On the other hand, some participants argue that they may opt for quick wins because they do not have access to any land, machinery, offices, and vehicles.”

The researchers stated that most youth involved in business ventures do not have the necessary training or skills to maintain a business. “Poor financial management has also been cited as one of the challenges for youth entrepreneurs, such as using profit for personal reasons rather than investing in the business. Also some are not being able to separate their livelihood from their businesses.

Lastly, youth entrepreneurs reported a lack of experience as one of the challenges. For example, the experience of running a business with projections, sticking to the projections, having an accounting system, maintaining a clean and clear billing system, and sound administration system.”

According to the researchers, the participants in the study emphasized that there is fragmentation within the entrepreneurial ecosystem, whereby there is replication of business activities without any differentiation. “There is no integration of the ecosystem players. As such, they end up with duplicate programs targeting the same objectives. The financial sector recommended that there is a need for an intermediary body that will bring all the ecosystem actors together and serve as a “one-stop shop” for entrepreneurs and build mentorship programs that accommodate the business lifecycle from inception to growth.”

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Business

BHC yearend financial results impressive

18th July 2022
BHC

Botswana Housing Corporation (BHC) is said to have recorded an operating surplus of P61 Million, an improvement compared to the previous year. The housing, office and other building needs giant met with stakeholders recently to share how the business has been.

The P61 million is a significant increase against the P6 million operating loss realized in the prior year. Profit before income tax also increased significantly from P2 million in the prior year to P72 million which resulted in an overall increase in surplus after tax from P1 million prior year to P64 million for the year under review.

Chief of Finance Officer, Diratsagae Kgamanyane disclosed; “This growth in surplus was driven mainly by rental revenue that increased by 15% from P209 million to P240 million and reduction in expenditure from P272 million to P214 million on the back of cost containment.”
He further stated that sales of high margin investment properties also contributed significantly to the growth in surplus as well as impairment reversals on receivables amounting to P25 million.

It is said that the Corporation recorded a total revenue of P702 million, an 8% decrease when compared to the P760 million recorded in the prior year. “Sales revenue which is one of the major revenue streams returned impressive margins, contributing to the overall growth in the gross margin,” added Kgamanyane.

He further stated professional fees revenue line declined significantly by 64% to P5 million from P14 million in the prior year which attributed to suspension of planned projects by their clients due to Covid-19 pandemic. “Facilities Management revenue decreased by P 24 million from P69 million recorded in prior year to P45 million due to reduction in projects,” Kgamanyane said.

The Corporation’s strength is on its investment properties portfolio that stood at P1.4 billion at the end of the reporting period. “The Corporation continues its strategy to diversify revenue streams despite both facilities management income and professional fees being challenged by the prevailing economic conditions that have seen its major clients curtailing spending,” added the CEO.

On the one hand, the Corporation’s Strategic Performance which intended to build 12 300 houses by 2023 has so far managed to build 4 830 houses under their SHHA funding scheme, 1 240 houses for commercial or external use which includes use by government and 1 970 houses to rent to individuals.

BHC Acting CEO Pascaline Sefawe noted that; BHC’s planned projects are said to include building 336 flat units in Gaborone Block 7 at approximately P224 million, 100 units in Maun at approximately P78 million, 13 units in Phakalane at approximately P26 million, 212 units in Kazungula at approximately P160 million, 96 units at approximately P42 million in Francistown and 84 units at approximately P61 million in Letlhakane. Emphasing; “People tend to accuse us of only building houses in Gaborone, so here we are, including other areas in our planned projects.”

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Business

Commercial banks to cash big on high interest rates on loans

18th July 2022
Commercial-banks

Researchers from some government owned regulatory institutions in the financial sector have projected that the banking sector’s profitability could increase, following Bank of Botswana Monetary Policy Committee recent decision to increase monetary policy rate.

In its bid to manage inflation, Bank of Botswana Monetary Policy Committee last month increased monetary policy rate by 0.50 percent from 1.65 percent to 2.15 percent, a development which resulted with commercial banking sector increasing interest rate in lending to household and companies. As a result of BoB adjustment of Monetary Policy Rate, from 1.65 percent to 2.15 percent commercial banks increased prime lending rate from 5.76 percent to 6.26 percent.

Researchers from Bank of Botswana, the Non-Bank Financial Institutions Regulatory Authority, the Financial Intelligence Agency and the Botswana Stock Exchange indicated that due to prospects of high inflation during the second half of 2022, there is a possibility that the Monetary Policy Committee could further increase monetary policy rate in the next meeting in August 25 2022.

Inflation rose from 9.6 percent in April 2022 to 11.9 percent in May 2022, remaining above the Bank of Botswana medium-term objective range of 3 – 6 percent. According to the researchers inflation could increase further and remain high due to factors that include: the potential increase in international commodity prices beyond current forecasts, logistical constraints due to lags in production, the economic and price effects of the ongoing Russia- Ukraine conflict, uncertain COVID-19 profile, domestic risk factors relating to possible regular annual administered price adjustments, short-term unintended consequences of import restrictions resulting with shortages in supplies leading to price increases, as well as second-round effects of the recent increases in administered prices “Furthermore, the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices could add upward pressure to inflation,” said the researchers.

The researchers indicated that Bank of Botswana could be forced to further increase monetary policy rate from the current 2.15 percent if inflation rises persistently. “Should inflation rise persistently this could necessitate an upward adjustment in the policy rate. It is against this background that the interest rate scenario assumes a 1.5 percentage points (moderate scenario) and 2.25 percentage points (severe scenario) upward adjustment in the policy rate,” said the researchers.

The researchers indicated that while any upward adjustment on BoB monetary policy rate and commercial banks prime lending rate result with increase in the cost of borrowing for household and compnies, it increase profitability for the banking sector. “Increases in the policy rate are associated with an overall increase in bank profitability, with resultant increases in the capital adequacy ratio of 0.1 percentage points and 0.2 percentage points for the moderate and severe scenarios, respectively,” said the researchers who added that upward adjustment in monetary policy rate would raise extra capital for the banking sector.

“The increase in profit generally reflects the banking industry’s positive interest rate gap, where interest earning assets exceed interest earning liabilities maturing in the next twelve months. Therefore, an increase of 1.5 percentage points in the policy rate would result in industry gains of P71.7 million (4.1 percent increase), while a 2.25 percentage points increase would lead to a gain of P173.9 million (6.1 percent increase), dominated by large banks,” said the researchers.

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