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DMC - DiamondCorp plc - 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 and
kimberlite exploration activities in Botswana.
HIGHLIGHTS
* The decline development at the Lace mine near Kroonstad in the Free State
province of South Africa is on schedule and within budget to access the
main kimberlite pipe at the -260m level in March, despite flooding rainfall
over the project area in recent weeks posing challenges for waste haulage
and dewatering.
* The 1.2 million tonne per annum dense media separation plant at Lace has
been successfully recommissioned with feed from tailings in readiness for
processing of fresh kimberlite.
* 1,328 carats of diamonds recovered during plant recommissioning will be
tendered in Johannesburg during February to determine current market price
for Lace tailings diamonds.
* Planning for a mini-bulk sampling programme on the first of two
diamondiferous kimberlites discovered near Jwaneng in Botswana is being
finalised.
LACE MINE - FREE STATE PROVINCE, SOUTH AFRICA
Development activities at the Lace diamond mine, 200km southwest of
Johannesburg, near Kroonstad in the Free State Province of South Africa, have
focused on completion of the 4.5m x 4.5m decline to access kimberlite resources
below -260m. The decline is scheduled to access the kimberlite 20m below any of
the historical workings at the Lace mine.
The decline from the portal to the current working face is now over 1km and
about 200m vertical depth, with a further 220m of development remaining to be
completed before access to the main Lace kimberlite pipe is achieved. This
decline will be used for the haulage of kimberlite from below the -260m level
for bulk testing purposes and for waste and ore haulage during the ramp up to
full scale production.
Flooding rainfall over the project area in recent weeks has posed challenges for
waste haulage and mine dewatering. Despite these challenges, the development
currently remains both on schedule to be completed in March 2011 and within the
GBP5 million budget detailed in the materials dispatched to shareholders for the
extraordinary general meeting held in December 2010. Any further occurrences of
extraordinary rainfall may impact on this schedule.
Once the existing 6m x 2.5m vertical shaft is re-equipped for primary ore
hoisting, production at Lace will increase to 1.2 million tonnes of kimberlite
per annum and the decline will then be utilised for men, materials and
ventilation for the remainder of +25-year life of the mine.
The refurbishment of the vertical shaft and the ramp up to full scale production
is scheduled to take between nine and 12 months to complete and, as at November
2010, the cost for this development was estimated at GBP5.3 million. A detailed
review of the mine development cost and mine plan is currently underway.
In preparation for processing the initial 30,000 tonne bulk sample of kimberlite
from the -260m level, the 1.2 million tonne per annum dense media separation
plant at Lace has been recommissioned with feed from the kimberlite tailings
left from mining activities which took place between 1900 and 1930. The plant
has been successfully recommissioned to optimal operating condition and a number
of excellent gem diamonds were recovered during the process, including 7.04
carat and 5.99 carat stones.
A small parcel totaling 1,328 carats of diamonds recovered during the
recommissioning process will be tendered in Johannesburg during February to
determine the current market price for Lace tailings diamonds. This will provide
management with the price information required to determine if it will be
profitable to supplement fresh kimberlite processing with tailings material
during the balance of 2011 while the full-scale mine plan is being implemented.
Commenting on the activities, DiamondCorp CEO, Paul Loudon said: `It is exciting
for shareholders that our team continues to successfully overcome the technical
challenges of opening up an old kimberlite mine that has been under water for
more than 75 years.
`We are now weeks away from accessing the top level of the estimated 33 million
tonnes of kimberlite remaining below any of the old working areas at Lace. At
the same time, world diamond prices have recovered to levels higher than before
the crash of 2008, and the long term metrics for the industry remain very
strong.
`We look forward to processing the first 30,000 tonnes of fresh kimberlite from
the -260m level at Lace in the months ahead and reporting the recovered mining
grade and carat value before the end of the second quarter.`
In other developments, the Board welcomes the appointment of Mr Wayne Cloete as
general manager at the Lace mine. Wayne is a mining engineer with more than 25
years experience in underground mines in South Africa. He was previously Section
Manager, Moab Kotsong for AngloGold Ashanti and Mine Manager, Dominion for
Uranium One. He continues the mine development work initiated by the previous
mine manager Mr Keith McCulloch who tragically passed away after a short and
unexpected illness in the final quarter of 2010.
The Lace mine has also entered a joint venture with African Mobile Crushers
(Pty) Limited to investigate the potential for selling andesite waste rock from
the Lace mine decline development as sized crushed stone product. Income from
this activity has the potential to provide a useful credit to ongoing mine
development expenditure.
BOTSWANA
Preparations are being finalised for the commencement of a large diameter
drilling programme in Prospecting Licence PL/71 near Jwaneng in southeast
Botswana on the first of two diamondiferous kimberlite pipes which were
intersected during the Company`s drilling activities in 2010. The first pipe to
be tested will be J-05, a 1.5ha kimberlite under approximately 28 metres of
Kalahari sand.
Boreholes logging indicates the J-05 kimberlite comprises calcretised kimberlite
from approximately 28m to approximately 50m vertical depth, slumped Karoo
mudstones and volcaniclastic kimberlite from 50m to up to 105m vertical depth,
and various facies of volcaniclastic and coherent kimberlite from 85m to at
least 218m, the deepest drill intersections from the initial programme.
Of particular geological interest is the presence of mudstones in the core which
indicates that the kimberlite intruded unconsolidated sediment at the time of
emplacement. In addition, kimberlite is "mixed-in" with these mudstones in
places. The mudstones are most likely to be of Karoo age (approx. 250 million
years ago). These features suggest that the J-05 kimberlite is the same or
similar age to the kimberlite being mined by Debswana at Jwaneng, 10km to the
northwest where similar features are known to be present. Jwaneng is the richest
diamond mine in the world measured by value.
Microdiamond analysis of core samples from J-05 yielded 51 diamonds, comprising
two macrodiamonds and 49 microdiamonds. One macrodiamond was white/colourless
and one was off-white. (Macrodiamonds are diamonds that are greater than 0.5mm
in the longest axial dimension.) Encouragingly, the presence of two
macrodiamonds suggests the possibility of a coarse stone size distribution.
DiamondCorp is earning a 77.5 per cent interest in PL/71 from Botswana company
Geoperspectives (Pty) Limited by funding exploration activities.
The Competent Person responsible for the technical information contained in this
announcement is Mr Paul Zweistra (Pr. Sci. Nat., Registration number 400016/93)
a full-time employee of VP3 Geoservices (Pty) Limited. VP3 and Mr Zweistra have
given their permission for their work to be quoted in this announcement.
London
3 February 2011
AIM Nomad: Cenkos Securities plc
AIM Brokers: Cenkos Securities plc, Fairfax I.S. plc, Ocean Equities Ltd
JSE Sponsor: PSG Capital (Pty) Limited
DiamondCorp plc, Paul Loudon +44 20 7256 2651
Liz Bowman/Ivonne Cantu, Cenkos Securities plc +44 20 7397 8900
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: 03/02/2011 09:00:07 Supplied by www.sharenet.co.za
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