| Tue 10 May 2011, 8:30 | | DMC - DiamondCorp - Operational Update |
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DMC
DMC
DMC - DiamondCorp - Operational Update
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`)
OPERATIONAL UPDATE
DiamondCorp plc, the African diamond mine development and exploration company,
is pleased to provide an update of mine development at Lace in South Africa.
HIGHLIGHTS
- After a year`s development activity, the new decline at the Lace mine near
Kroonstad in the Free State province of South Africa yesterday successfully
accessed kimberlite at the -260m bulk testing level.
- The mine has been dewatered to -280m, some 20m below the sampling level.
- The 1.2 million tonne per annum dense media separation plant at Lace has
been recommissioned and audited in readiness for processing of fresh
kimberlite.
- The Lace mine planning team has been strengthened by the appointment of Mr
Bob Harverson as Group Consulting Mining Engineer.
- Life of mine planning and the definitive cost revision for mine development
is well advanced and scheduled for completion at the end of May.
LACE MINE - FREE STATE PROVINCE, SOUTH AFRICA
Since April 2010, development activities at the Lace diamond mine, near
Kroonstad 200km southwest of Johannesburg, have focused on completion of the
4.5m x 4.5m decline to access kimberlite resources below any areas stoped in the
past. The decline has now accessed the kimberlite at the -260m level, some 20m
below previously stoped workings.
Heavy rainfall over Southern Africa and the project area during the first four
months of the year has posed challenges for mine dewatering, waste hauling and
drilling of a new ventilation raise, and resulted in decline access to the
kimberlite being about six weeks behind schedule.
Despite these challenges, the mine has been successfully dewatered to -280m, 20m
below the sampling level and extraction of an initial 30,000 tonnes bulk sample
of kimberlite is underway. This is expected to be completed in June, at which
time an indicative mining grade will be known. The kimberlite sample is being
extracted from six 3m x 3m parallel development drives across the extent of the
pipe. Simultaneously, the diamonds recovered will be graded and valued to
determine the current selling price. The combination of grade and carat value
will determine the economics of mining the Lace kimberlite.
In preparation for processing the bulk sample of kimberlite, the dense media
separation plant at Lace, with a capacity of 1.2 million tonnes per annum, has
been recommissioned with feed from the kimberlite tailings remaining from mining
activities which took place between 1900 and 1931. Some 1,321 carats of diamonds
recovered during recommissioning were sold at tender in Johannesburg in February
2011 for US$94 per carat. This compares with US$55 per carat received in
September 2008, the last time the Company tendered diamonds prior to the price
collapse which began in the following month, and US$33 per carat received in May
2009 at the bottom of the market. This strong price for Lace tailings diamonds
leads the directors to believe that DiamondCorp`s base case of US$120 per carat
for diamonds from the Lace pipe is conservative in the current market.
The recovery plant was independently audited during March 2011 and the
consulting metallurgist concluded that following replacement of some routine
wear components the plant was operating at optimal efficiency.
Over the last four months, a detailed review of life of mine planning has been
undertaken by the Lace mine management team led by Mine Manager, Wayne Cloete.
The in-house team has been strengthened by the appointment of Mr Bob Harverson
as DiamondCorp`s Group Consulting Mining Engineer. Mr Harverson is a mining
engineer with more than 40 years experience in underground diamond mines in
South Africa. He was previously Mine Manager, Kimberley and Project Manager,
Finsch for De Beers, then independent advisor to De Beers on block caving and
underground mining across all De Beers operations. Also involved in the planning
has been Dr Patrick Bartlett, an independent consulting geologist with more than
40 years experience in underground diamond mines in South Africa. He was
previously Chief Geologist, Premier Mine and Block Cave School Project Leader
for De Beers.
The life of mine review has concluded that initial mining of the block between -
260m and -360m depth will be by sub-level stoping, followed by sub-level caving
for ore below -360m.
Simultaneously, a detailed revision has been underway on full-scale mine
development costs and life of mine operating costs. This review will be
concluded before the end of May. One of the interesting outcomes of the review
so far is that a forecast 25% increase in electricity costs in South Africa for
2012 has tipped the scales in favour of conveyor belts for ore transport all the
way to surface rather than refurbishment of the existing 6.5m x 2.5m vertical
shaft. The vertical shaft instead will be used for upcast ventilation,
eliminating the need for raise boring a new vent shaft. This change has no
impact on mine development time and is anticipated to have a positive impact on
life of mine operating costs.
Commenting on the activities, DiamondCorp CEO, Paul Loudon said: `It is very
exciting to start hauling and processing fresh kimberlite from the Lace mine for
the first time since mining ceased in 1931.
`By the middle of the year we will know the mining grade and carat value at the
top of the first mining block of the estimated 33 million tonnes (SAMREC) of
kimberlite remaining below any of the old working areas at Lace, which contains
an indicated and inferred resource with an estimated 14 million carats of
diamonds to the -855m level.
`With both current diamond prices and the long-term metrics for diamond market
looking so strong, our timing looks good in terms of adding value for
shareholders.`
London
10 May 2011
AIM Nomad: Fairfax I.S. plc
AIM Brokers: Fairfax I.S. plc, Ocean Equities Ltd
JSE Sponsor: PSG Capital (Pty) Limited
DiamondCorp plc, Paul Loudon +44 20 7256 2651
Ewan Leggat, Fairfax I.S. plc +44 207 598 5368
Guy Wilkes, Ocean Equities Limited +44 207 786 4370
John-Paul Dicks, PSG Capital (Pty) Limited +27 21 887 9602
Charmane Russell/Marion Brower, Russell & Associates +27 11 880 3924
Ana Ribero, Blythe Weigh Communications +44 020 7138 3206
Date: 10/05/2011 08:30:01 Produced by the JSE SENS Department.
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