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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 kimberlite bulk testing at the Lace mine in
South Africa.
* To date, a total of 5,514 tonnes of volcaniclastic kimberlite has been
sampled from between the 25 and 26 levels on the southern margin of the
main Lace pipe. The kimberlite in this contact zone of the pipe is heavily
diluted with up to 75% country rock (waste) inclusions.
* An additional 1,500 tonnes of kimberlite from the south west side of the
pipe has been hauled to surface in readiness for processing and mining
continues in a northeast direction across the pipe.
* The tonnage processed to date represents less than 20% of the total tonnage
from the planned bulk test of 30,000 tonnes and less than 20% of the total
area of the pipe to be sampled.
* From the total kimberlite processed to date, 759 carats of diamonds have
been extracted, with the biggest stone being a 16.08 carat non-gem diamond.
* Of the 759 carats, the first 561 carats have been valued by the SA Diamond
Exchange at an average of $205 per carat, 71% higher than the Company`s
base case of $120 per carat, and 28% higher than the Company`s upper case
of $160 per carat.
* To date the largest diamond in the parcel is a sawable gem of 5.52 carats
valued at $1,500 per carat. The bulk of the value in the parcel lies in gem
stones of between 1 and 4 carats, and more than 80% of the diamonds
recovered to date are gem quality. This is an exceptionally high proportion
for run-of-mine kimberlite.
* The average recovered grade of `diluted contact kimberlite material`
processed to date is 13.76 carats per hundred tonne ("cpht"). This should
not be considered indicative of the whole pipe at this level, as less than
20% of the pipe area has been sampled to date.
* Sampling started in what historically was described as the "stony ground"
side of the pipe, where waste inclusions dilute the grade and is moving
progressively northeast across the pipe into the zone where historically
the best recoveries (higher grades) were reported.
* The pipe is being sampled in this manner so that development drives put in
place for sampling can be used for full-scale mining in a sequence which
allows the expected highest grade kimberlite in the northeast of the pipe
to be mined first, and then progressively mine in a retreat manner to the
lower grade southwest side.
* Forecast revenue per tonne on the kimberlite extracted to date is US$28.21
per tonne, which represents 98 per cent of the Company`s base case of
$28.80 per tonne, though the parcel valued to date is less than 10% of
diamonds expected to be recovered from the bulk test.
* The Lace processing plant is operating efficiently and no damage to any
diamonds recovered to date has been identified.
* The sampling rate is slower than planned due to poor ground conditions in
and around development drives put in place ahead of mining operations on
the 25 and 26 levels in the 1930s. To ensure mining takes place in as safe
a manner as possible, the 30,000 tonne bulk sample will now take until
September to complete as a consequence of the additional hanging wall
support required.
* These poor ground conditions in the upper level of the first 70m mining
block will not affect full-scale mine development or mining rates at the
planned production level on the 33 level where pre-existing development
drives are minimal. To the contrary, it is expected to assist with caving
of the kimberlite.
Commenting on the activities, DiamondCorp CEO, Paul Loudon said: `While we wish
it was possible to extract the bulk sample at a faster rate, for safety reasons
this is not possible.
`As a result, we are reporting on what we expect to be the lowest grade sections
of the pipe at this level as this area has been sampled first. Nonetheless, we
are absolutely delighted with the quality of the diamonds we are recovering.
`Further, the dramatic increase in carat value has the potential to lower our
forecast breakeven grade from 13 cpht to 8 cpht, meaning Lace could be a
significantly higher cash generator than initially thought.
`Opening up old workings which have been under water for more than 75 years has
particular challenges and our emphasis is always on ensuring the safety of our
workforce.
`Pleasingly, the old mine plans have proven to be very accurate both in terms of
elevation and the position of old tunnels. And now, as we are sampling, the
kimberlite descriptions from the old manager`s reports are also proving
accurate.`
The 1931 manager`s annual report says: "The total (development) footage in the
Mine amounted to 16,979ft., of which 7,733ft. represented the work done in the
block from 780ft. (24 level) to 1,100ft. (33 level) The development continued to
expose good ground in the North, North-East and East sections of the Mine, and
stony ground in the South-East and West."
A full copy of this report has been uploaded to the Company`s website at
www.diamondcorp.plc.uk, along with some photos of the diluted kimberlite which
has been sampled to date.
The Company plans to release another update on Lace bulk sampling in
approximately four weeks time.
London
2 August 2011
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) Ltd. VP3 and Mr Zweistra have
revieved the information contained herein and approved the contents of this
press release.
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: 02/08/2011 08:02:58 Supplied by www.sharenet.co.za
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