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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 on operations at the Lace mine in
South Africa.
HIGHLIGHTS
- From 15 March 2012 until the end of May 2012 the Company treated 55,391
tonnes of tailings for a recovery of 4060.97 carats. This represents a
recovered grade of 7.33 carats per hundred tonnes (cpht), which is 47%
above budget and included an 8.3 carat good quality white gem diamond.
- Tailings retreatment costs in May averaged R28.70 per tonne, 14% below
the budgeted R33.40 per tonne.
- Planned production rates of 36,000 tonnes per month are expected to be
achieved during June and tender sales of the Lace tailings diamonds will
resume in Johannesburg in September.
- The major rebuilds on the underground mining fleet are continuing on
schedule and within budget to allow for a rapid restart to underground
development once project finance is available for drawdown.
Commenting on developments, DiamondCorp CEO, Paul Loudon said: `We are
pleased with the plant performance on tailings retreatment and delighted that
diamond recoveries are better than expected and costs are well within
budget.`
TAILINGS RETREATMENT
The Lace project contains a measured 3.3 million tonnes of tailings from pre-
1931 mining activities at an estimated average recoverable grade of 5.00
cpht. A decision was taken earlier in the year to recommence tailings
retreatment following completion of underground bulk testing activities.
Since March, the following tonnage has been processed:
Month Tonnage Carats Grade (cpht)
March 8,623 677.79 7.86
April 12,949 982.34 7.59
May 33,819 2400.84 7.10
TOTAL 55,391 4060.97 7.33
The recovered grade of 7.33 cpht is 47% above the budgeted grade of 5.00
cpht. Based on management`s previous tailings retreatment experience, the
dump grade is expected to be variable, and progressively decline over time.
This is because the old mine records show that the grade of the Lace
kimberlite pipe improved with depth and the tailings from the deepest, higher
grade mining are on the outside of the dumps. The recovered grade of the
dumps is therefore expected to decline as mining progresses into the older
dumps from the highest levels of the pipe where grades were historically
lower.
The diamonds recovered are mainly the smaller size fractions, as expected
from pre-1931 diamond tailings, with a higher than average proportion of gem
diamonds as is typical from the Lace pipe. The dumps occasionally yield a
significant gem and during May a fine 8.3 carat E/F sawable white gem diamond
was recovered.
The Company will recommence tenders on the Lace diamonds in Johannesburg
during September, and these will then be held approximately every eight
weeks.
The Lace recovery plant is performing to expectations and plant operating
costs for May were R28.70 per tonne, 14% below the budgeted R33.40 per tonne
as a result of careful operations management and cost control.
UNDERGROUND DEVELOPMENT
Underground activities are currently limited to pumping and general making
safe. The major rebuilds on the Company`s underground mining fleet is
progressing on schedule and within budget, which will allow for a rapid
recommencement of underground activities once project financing facilities
are available for drawdown.
BACKGROUND - LACE MINE, FREE STATE PROVINCE, SOUTH AFRICA
The Lace diamond mine is located 25km northwest of the town of Kroonstad
within the Free State Province of South Africa. The mine operated from 1896
to 1931, and according to mine records produced approximately 700,000 carats
of diamonds from 4.5 million tonnes of kimberlite at a recovered grade of 16
cpht. The production was reported to be high quality, white diamonds, with
the biggest stones recorded historically being 122 and 86 carats. The
kimberlite was mined by open pit to approximately 100m depth, then by
underground methods to 240m depth. In 1920s, higher grade kimberlite was
encountered as the workings went deeper, and a decision was taken to develop
a 6.5m x 2.5m vertical shaft to the 36 level (360m) and pre-develop the
kimberlite between the 24 level and the 33 level with 2m x 2m development
drives.
The vertical shaft and development drives were completed in 1930, a year
before the mine closed when diamond prices collapsed in the Great Depression.
The mine was then kept dewatered until 1939, when it was acquired by De Beers
Consolidated Mines Limited. De Beers never operated the mine, but instead let
it flood, thereby sterilising the resource as part of their control of the
supply side of the diamond industry. Following progressive changes to the
mining law in South Africa, DiamondCorp acquired the property in 2006 in
conjunction with Black Economic Empowerment partners Shanduka Resources and
Sphere Investments.
In 2007, DiamondCorp constructed a 1.2 million tonne per annum dense medium
separation plant at Lace and commenced retreatment kimberlite tailings from
the mining activities which took place between 1896 and 1931. Approximately
1.1 million tonnes of tailings were treated at a recovered grade of 8 cpht.
At the same time, a 4.5m x 4.5m decline was commenced to access and bulk test
the kimberlite below the previous mining levels. Decline development and
tailings re-treatment ceased at the end of 2008 when diamond prices fell by
50 per cent during the credit crisis. Decline development resumed in May 2009
and reached the kimberlite sampling level 25 in May 2011. Bulk sampling of
the pipe was completed in October 2011, and an independent engineering report
recommending a block cave development on the 47 level was completed by SRK
Consulting in March 2012.
London
12 June 2012
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 3151 0970/+27 56 212 2308
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
Date: 12/06/2012 10:00:01 Supplied by www.sharenet.co.za
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