Independent Evaluation of First Diamond Parcel Yields a Valuation of $197.68 Per Carat
NEWS RELEASE
TSODILO RESOURCES LIMITED
BK16 UPDATE
Independent Evaluation of First Diamond Parcel Yields a Valuation of $197.68 Per Carat
July 12, 2018 Trading Symbol: TSXV: TSD #07122018
TORONTO, CANADA - Tsodilo Resources Limited (TSX Venture Exchange: TSD) ("Tsodilo" or the "Company") is
pleased to provide the initial results of an independent diamond valuation of $197.68 USD per carat from two parcels
consisting of 224 diamonds totaling 34.35 carats o f commercial size (above 1mm ), recovered from the BK16
kimberlite in Botswana.
The valuation and breakage study were conducted by Mr. R. D. Ferraris of QTS Kristal Dinamika (“QTS”).
Mr. Ferraris is an independent licensed diamond dealer with over 39 year s of experience in valuation,
marketing and tender preparation, and is an expert in rough diamond valuation and breakage characteristics
and a "qualified person" as such term is defined in National Instrument 43-101.
The two parcels (hereinafter “parcel” or “package’) represents an initial valuation “snap shot” of the ongoing
evaluation program for the BK16 kimberlite Large Diameter Drilling (LDD) samples. The processing of the
samples from the LDD holes reported herein are not complete at this stage and the results presented should
not be viewed as final . It is probable that more diamonds are likely to be recovered from the auditing process
of the LDD holes and from the re-crush of the plus 3mm material and that of the tailings.
The average diamond value of th is parcel (224 diamonds of plus 1mm with a cumulative weight of 34.35
carats) was shown to be $197.68 USD per carat (where this represents a standard mean, where no outliers
were excluded). Note, however, that this is a relatively small sample and should be viewed as indicative at
this stage. This valuation is dated applicable from the 3 rd July 2018 and utilizes the current QTS proprietary
Price-Book (Q2-2018).
The parcel is dominated by white, gem -quality diamo nds, many of which are G -color or higher. The
proportion of low quality diamonds is very low compared to other Botswana kimberlites. No boart quality
diamonds were seen. Probable Type IIa diamonds were observed but were not tested.
The average value of t he larger diamonds (Diamond Trading Company (DTC) sieve sizes 12 and above,
known as Grainer sizes) is $360.22 USD per carat, while the average value of the smaller diamond (DTC
sieve sizes 11 to 1, known as Smalls 11 to 9, Fines 7 to 3, and Ultra -Fines +1) is $87.86 USD per carat,
highlighting the significant value of the larger diamonds.
Although this parcel represents only a small sample it is encouraging to note the quality and high value of
these diamonds at $198.68 USD per carat, which is slightly higher than the 2010 valuation of the Karowe
average production revenue of USD 194 per carat (+1.0 mm cut -off). (NI 43 -101 Technical Report revision
and update on the AK6 Kimberlite Mine, Botswana, December 31, 2010, pg. 11 , filed February 23, 2011 on
www.sedar.com).
Dr. Michiel de Wit, Tsodilo’s President and COO commented that “although the first parcel was small we are
encouraged by the evaluation work which gave such a high value to the diamonds. We knew from the historic
diamonds that the diamonds in BK16 were high quality gem stones and it is exciting to see this continuing in our LDD
sample recoveries”.
Further Observations
◊ The QTS valuation documented the presence of high color, clean, high -yielding shapes, and Table 1 below
shows the individual high-quality stones that constitute more than 5% of the value of the overall parcel.
Table 1. Individual diamonds that constitute 5% and over of the overall parcel value.
LDD Hole Sub-
Sample
Diamond Size
(Carats) Notes on Quality Value per carat
(USD)
Total Value
(USD)
LDD_020V S053 1.53 G Color Z Spotted Light $755.00 $1,155.15
LDD_033V S024 1.38 F Color Mb Gem High $705.00 $972.90
LDD_033V S021 0.96 J Color Z Gem High $585.00 $561.60
The breakage studies confirmed that the LDD program and the DMS processing of the drill samples was very
well managed as the Breakage Index was 19.64% for the LDD samples . This is very low compared to
international average levels for similar LDD programs, which can be in excess of 30%. The impact of
diamond breakage by LDD extraction and processing on the above-mentioned diamond valuation is therefore
minimal.
Several diamonds were identified by Mr. Ferraris as rare white Type IIa diamonds and this will be confirmed
at a later date when a larger population of diamonds from BK16 has been secured for testing. The larger
population of diamonds will allow for a robust size frequency curve to be constructed.
Mr. Ferraris observed that the majority of the BK16 diamonds are mostly white with a mainly dodecahedral
shapes. A few minor octahedrons were noted in the smaller sizes and no cubic diamond s were seen. There
were a few triangular macles in smaller sizes, and no boart quality diamonds were noted in these parcels. The
population of low quality diamonds is therefore very low compared to other Botswana kimberlites. He further
noted that t he diamonds from these two parcels are similar in shape, color and quality to those found at the
Karreevlei kimberlite in South Africa.
Mr. Ferraris went on to state that “While this is a very small sample the presence of such white high color
clean high-yielding shapes bodes well for the future, and while the combined sample have an average price of
close to $200 USD per carat. Further to this the BK16 goods are very attractive and would be highly saleable
on the International Market”.
Background on BK16
The BK16 kimberlite project is located within the Orapa Kimberlite Field (“OKF”) in Botswana. The diamond mines
in Botswana have produced an average of 27 million carats annually in the last 10 years and Botswana is the world’s
largest producer of diamonds by value. In 2017, the OKF area produced 11.07 million carats. Of the 83 known
kimberlite bodies, eleven have been or are currently being mined. These are AK01, AK02 and AK07 (Orapa,
Debswana), AK06 (Karowe, Lucara Diamond Corporation), BK01, BK09, BK12 and BK15 ( Damtshaa, Debswana),
DK01 and DK02 (Letlhakane, Debswana) and BK11 (Firestone Diamonds). The Karowe mine has produced such
notable diamonds as the 1,109 carat `Lesedi La Rona` and the 813 carat `Constellation`.
The diamondiferous BK16 kimberlite pipe is approximately 6 hectares in size at surface and is known to contain rare
and valuable Type IIa diamonds (see press release dated May 31, 2016 located on the Company’s website).
BK16 Diamond Valuation
Mr. Ferraris, in the presence of Tsodilo’s President Dr. Michiel de Wit as a company representative, conducted a
detailed valuation and breakage study at the Diamond Technology Park (DTP) in Gaborone, Botswana of the first
parcel of diamonds recovered by the recently completed LDD program on the BK16 kimberlite. The parcel consists
of 224 diamonds, totaling 34.35 carats. The diamond s had been acid cleaned at a facility located at the D TP. The
diamond parcel evaluated is fully complete and, in all respects, representat ive of the recovered sample and industry
standards have been followed to ensure that a coherent “Chain of Custody” has been maintained.
The diamonds from each LDD sample was evaluated separately in the following manner:
◊ Sample packet was opened to confirm count and weight
◊ The diamond(s) were then sieved
◊ The individual weight was then recorded per sieve class
◊ Each diamond was then examined and valued separately
◊ They were then assessed for Breakage and Impact damage
◊ The details for each sample and LDD hole number and sub-sample number were recorded
Table 2 sets forth the per hole breakdown for the diamonds studied by Mr. Ferraris. Although the $USD per carat is
somewhat variable this is due mainly to the sample size. It is important to note that th ese results are still preliminary
since the processing of the LDD samples is ongoing and the auditing and re-crushing of the X-ray concentrates and
tailings of the +3 and +8 mm fraction of the LDD samples has only just commenced.
Table 2. Valuation breakdown of the partially completed LDD samples
Sample Number of
Diamonds
Carat
Weight
Value / Carat
$USD
Sample Total
$USD
Number of
Sub-Samples
LDD020V 76 12.05 $205.74 $2,479.12 14
LDD033V 56 10.80 $269.50 $2,910.55 20
LDD026V 18 2.12 $170.80 $362.10 10
LDD018V 22 3.86 $113.81 $439.30 12
LDD021V 38 4.42 $118.33 $523.02 8
LDD023V 7 0.74 $47.77 $35.35 2
LDD019V 2 0.03 $33.33 $1.00 1
LDD022V 2 0.08 $37.50 $3.00 1
LDD030V 3 0.25 $147.00 $36.75 1
TOTAL 224 34.35 $197.68 $6,790.19
There is not a major difference on the value of the diamonds between the two main kimberlite phases, VK2 and VK3.
The general price per carat of VK2 is greater than VK3, although the price of the larger diamonds is higher in VK3.
Since these are only small parcels it is unclear if these are real or an artifact of the size of the population.
About Tsodilo Resources Limited
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for
economic diamond and metal deposits at its Bosoto (Pty) Limited ("Bosoto") and Gcwihaba Resources (Pty ) Limited
("Gcwihaba") projects in Botswana and its Idada 361 (Pty) Limited ("Idada") project in Barberton, South Africa. The
Company has a 100% stake in Bosoto (Pty) Ltd. which h olds the BK16 kimberlite project in the Orapa Kimberlite
Field (OKF) in Botswana and the PL216/2017 diamond prospection license also in the OKF. The Company has a
100% stake in its Gcwihaba project area consisting of seven metal (base, precious, platinum g roup, and rare earth)
prospecting licenses all located in the North -West district of Botswana. Additionally, Tsodilo has a 70% stake in
Idada Trading 361 (Pty) Limited which holds the gold and silver exploration license in the Barberton area of South
Africa. Tsodilo manages the exploration of the Gcwihaba, Bosoto and Idada projects. Overall supervision of the
Company's exploration program is the responsibility of Dr. Mike de Wit, President and COO of the Company and a
"qualified person" as such term is defined in National Instrument 43-101.
This press release may contain forward -looking statements. All statements, other than statements of historical fact,
that address activities, events or developments that the Company believes, expects or anticipates will or may occur in
the future (including, without limitation, statements pertaining to the use of proceeds, the impact of strategic
partnerships and statements that describe the Company’s future plans, objectives or goals) are forward -looking
statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on
information currently available to the Company. Forward -looking statements are subject to a number of risks and
uncertainties that may cause the actual results of the Company to differ materially from those discussed in the
forward-looking statements, and even if such actual results are realized or substantially realized, there can be no
assurance that they will have the expected consequences to, or effects on t he Company. Factors that could cause
actual results or events to differ materially from current expectations include, among other things, changes in equity
markets, changes in general economic conditions, market volatility, political developments in Botswa na and
surrounding countries, changes to regulations affecting the Company's activities, uncertainties relating to the
availability and costs of financing needed in the future, exploration and development risks, the uncertainties involved
in interpreting e xploration results and the other risks involved in the mineral exploration business. Any forward -
looking statement speaks only as of the date on which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as
a result of new information, future events or results or otherwise. Although the Company believes that the
assumptions inherent in the forward -looking statements are reasonable, forward -looking statements are not
guarantees of future performance and accordingly undue reliance should not be put on such statements due to the
inherent uncertainty therein.
Neither the TSX Venture Exchange (“TSXV”) nor its Regulation Services Provider (as that te rm is defined in the
policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release. This news release may
contain assumptions, estimates, and other forward -looking statements regarding future events. Such forward -looking
statements involve inherent risks and uncertainties and are subject to factors, many of which are beyond the
Company's control, which may cause actual results or performance to differ materially from those currently
anticipated in such statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
James M. Bruchs Chairman and Chief Executive Officer [email protected]
Dr. Mike de Wit President and Chief Operating Officer [email protected]
Head Office Telephone +1 416 572 2033 Facsimile + 1 416 987 4369
Website http://www.TsodiloResources.com