KAO Mine
History

Kao Mine History

1956 - 2005 Early KAO Mining Operations

The Kao kimberlite was discovered by Colonel Scott and his exploration team in the mid to late 1950's. Since this discovery, the Kao kimberlite was mined by artisans and organized cooperatives. Various commercial mining enterprises dabbled with the prospects of developing this mine, however, their exploration results showed that while the kimberlite body was diamondiferous, the grade and the value of the diamonds were too low to make the development of the mine economically viable.

2006 - 2009 Kao Diamond Mines (Pty) Limited (“KDM”)

Despite this, and perhaps emboldened by the success at Letšeng from the beginning of the 21st century, Kao Diamond Mines (Pty) Limited (“KDM”), a subsidiary of Global Resources Inc. acquired the mining lease for Kao from the Government of Lesotho in 2006.

KDM commenced production in around 2006 and within no time KDM was evidently struggling with poor production. Over the 3 year period, the total production exported by KDM was merely around 7000 carats, which is only approximately one third of a month’s current production volume at Kao. KDM failed to pay royalties to the Government of Lesotho during the period that it held the Kao mining lease. But these were not its only woes. Eventually it was in debt to creditors to the tune of approximately M40 million, without the cash flow or funding to service these debts. Creditors filed for liquidation in 2009 and a provisional order was granted. KDM never got through these difficulties and was finally liquidated. The low grade, marginal diamond deposits of Lesotho had claimed another victim.

Storm Mountain Diamonds ("SMD") acquired the Mine in 2010

In 2010, Keith Whitelock and his team were instrumental in re-developing the Kao mine in such a way that, whilst creating an attractive financial environment for investors, while maximum benefits accrued to the Basotho and to the Lesotho Nation, by way of employment opportunities and local development.

This is the context in which Storm Mountain Diamonds ("SMD") took over the mining lease at Kao in 2010 and in which Namakwa Diamonds Limited invested, in the aftermath of an insolvent operation.

Keith was acknowledged by the Lesotho Government and was appointed Officer of the Most Loyal Order of Ramats’eatsana (OMLOR), “in recognition of his outstanding contribution in the diamond mining industry in Lesotho” at the King’s Birthday Celebrations on 17 July, 2010.

SMD’s success is one of the unique memoirs in the history of diamond mining in Lesotho. The committed and high-risk taking character of its investors, visionary management and dedicated team have all made it possible for the mine to continue operating.