| Fri 31 Jul 2009, 12:00 | | DMC - DiamondCorp Plc - Lace Mine Update and Withdrawal of Cautionary |
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DMC
DMC
DMC - DiamondCorp Plc - Lace Mine Update and Withdrawal of Cautionary
Announcement
DiamondCorp Plc
JSE share code: DMC & AIM share code: DCP
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp" or "the Company")
LACE MINE UPDATE AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
DiamondCorp, the southern African diamond mining and exploration company,
provides the following update on activities at the Lace diamond mine in South
Africa.
LACE MINE UPDATE
BULK TEST AND DIAMOND SALES
DiamondCorp has completed bulk testing of the Lace Satellite Pipe at the -75m
level with approximately 11,380 tonnes of kimberlite treated for the recovery of
808.21 carats of diamonds. This represents a recovered grade of 7.1 carats per
hundred tonnes (cpht) compared with a zero grade assigned to the Satellite Pipe
in the Company`s resource statement.
The diamonds comprised 506.56 carats of gem diamonds and 301.65 carats of non-
gem diamonds. The gem diamonds were tendered in Johannesburg during July for
R446,979, representing a sales price of US$108 per carat, 36 per cent higher
than the US$79 per carat achieved for gems recovered from Main Pipe kimberlite
dump material during the commissioning of the primary crushing circuit in May.
The sample contained a total of 6,803 diamonds, with nine stones larger than 2
carats. The largest stone recovered was a 17.43 carat brown diamond and the most
valuable was a 5.07 carat SI1 sawable which sold for US$1,109 per carat.
In addition to the Satellite Pipe diamonds, the Company tendered a further
422.57 carats of diamonds recovered from kimberlite dump material during crusher
commissioning, of which 154.91 carats were gem diamonds which sold for R228,990,
representing US$181 per carat. The largest stone in this parcel was a 3.37 carat
SI1 sawable which sold for US$1,620 per carat.
The Company continued to see strong demand for the Lace mine diamonds,
underlining the better than average quality and colour of the gems produced from
the Lace kimberlites.
A second bulk test of material from the previously unmined kimberlite pillar
surrounding the Prospect Shaft at the edge of the Lace Main Pipe open pit has
been abandoned for geotechnical reasons.
CARE AND MAINTENANCE
While the diamond quality is high, the grade of the Satellite Pipe is sub-
economic at the -75m level. Main Pipe kimberlite below previous stoping
activities at the -240m level now needs to be accessed before mining can re-
commence. Until such time, the Lace processing plant will be placed on care and
maintenance.
WITHDRAWAL OF CAUTIONARY
Further to the announcement released on 24 June 2009 and the completion of the
sampling programme as mentioned above, shareholders are advised that the
cautionary announcement is now withdrawn.
NEW MINE PLAN AND UNDERGROUND DEVELOPMENT
Snowden Group has been engaged to design and cost a new mine plan for the
underground development at Lace, incorporating the recently discovered level
plans from mining and development which took place prior to October 1931.
The Snowden report is expected to be completed by the end of August alongside a
feasibility study and resource statement upgrade being completed by VP3
Geoservices (Pty) Limited. These reports will be delivered to DiamondCorp`s
Black Economic Empowerment (`BEE`) partners Shanduka Resources and Sphere
Investments at the time, thereby fulfilling the Company`s obligations with
respect to a cash call on the BEE partners for R26 million towards the Lace
underground development costs.
Commenting on the bulk test, DiamondCorp managing director and CEO Paul Loudon
said: ``Economic kimberlite above the -240m level and outside our formal
resource base would have been a great bonus in delivering early cashflow.
However, we will now focus our efforts on accessing the 6.57 million tonnes of
kimberlite between the -240m and -345m levels, and the Inferred Resource of 28
million tonnes of kimberlite estimated by our Competent Person to exist between
the -345m level and the -855m level, which contains an estimated 12 million
carats of high quality, high value diamonds at an estimated grade of 42 cpht.
`Bulk testing of the Satellite Pipe has confirmed the high quality of the Lace
diamonds and we are delighted with the prices we have received for the gems
recovered from primary kimberlites in these depressed times. These prices
suggest to us that in normal market conditions, the Lace gems will attract
prices at least equal to the US$125 per carat originally estimated in 2006.
31 July 2009
London
Sponsor:
Investec Bank Limited
For further information, please contact:
Paul Loudon
DiamondCorp plc
+44 20 7256 2651
Joe Nally/Liz Bowman
Cenkos Securities plc
+44 20 7397 8900
Robert Smith/Tanis Crosby
Investec Bank Limited
+27 11 286 7662
Charmane Russell
Russell & Associates
+27 11 880 3924
Date: 31/07/2009 12:00:01 Produced by the JSE SENS Department.
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