Operating losses at Irish explorer Botswana Diamonds increased by almost 45 per cent last year as the company lamented a lack of investment and a sector that is "out of favour".
The company, which has been heavily involved in diamond exploration in southern Africa since the 1980s, said losses for the year ended June 30th, 2018, grew to €556,407 from €310,898 the year before.
The company’s annual results show the increased losses can largely be attributed to a charge of €179,524 for the “impairment of exploration and evaluation assets”.
Botswana Diamonds also lost €72,352 on exchange difference on translation of foreign operations, as compared with a profit of €148,930 the year before.
Total comprehensive income for the year amounted to a deficit of €630,009 as compared with a deficit of €161,868 the year before.
Botswana Diamonds, which is chaired by John Teeling, said there was progress "on a number of fronts" for the company over the period.
"The most significant advance was at Thorny River in South Africa where drilling extended the diamond bearing dyke," it said. "A number of development options were examined and a decision to contract out the development was recently finalised."
The company said the despite making progress during the year, it has “struggled to attract investors”.
“We are not alone,” it said. “The junior exploration sector is out of favour. We believe our share price and those of our peer companies languish at or near the bottom of their price range. This makes funding difficult, expensive and dilutive.
“We believe that we can reduce the very high risk in exploration by country selection, ground selection and the application of not only the latest exploration technology but also the knowledge, experience and savvy of our prospector’s, technicians and management.”
Botswana Diamonds operates in three sub-saharan countries – Botswana, South Africa and Zimbabwe.
“Each of the three has different political risk profiles but share one crucial factor – they are geologically favourable for diamonds,” the company said.
“We must explore in locations where we can find diamonds. While this seems obvious it is not. Very few places on earth are thought to contain diamond bearing rocks.
“The focus of our activities since we set up has been and remains Botswana. An excellent country in which to operate, good governance, educated people, the rule of law and, above all else, very good diamond ground.
“Some of the best diamonds mines in the world are in Botswana. But, exploration there is not easy. The country is covered in sand- the Kalahari Desert and it can be extremely hot. The sand depth ranges from 50-100 metres.
“The very best exploration techniques struggle with this. They cannot tell you with any certainty what is beneath the sand. Add to this, a lack of water, few roads and poor communication and you can see the challenges.”
