Wrap Text
LACE DIAMOND MINE PROJECT UPDATE
DiamondCorp plc
AIM share code: DCP & JSE share code: DMC
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp", “the Group” or "the Company")
LACE DIAMOND MINE PROJECT UPDATE
DiamondCorp, the Southern African diamond mining, development and exploration company,
is pleased to provide the following update on the underground development at the Lace
diamond mine in the Free State province of South Africa.
Highlights
- Production ramp up from the Upper K4 (UK4) Block continues on schedule to achieve full
production of 30,000 tonnes per month by July.
- The conveyor belt system is operating to design specification and mining of the UK4 is
proceeding without any issues with respect to ground conditions.
- The diamonds recovered from initial processing are meeting expectations in terms of colour
and quality, including three stones larger than 10 carats, the largest of which was a 22.11
carat H coloured stone.
- This diamond has been sold into the Company’s South African beneficiation joint venture for
$5000 per carat with a view to recovering an 8 carat emerald cut stone after cutting and
polishing.
- To date, a total of 7,449 carats of diamonds have been accumulated from bulk testing and
initial production (see photograph on our website at www.diamondcorp.plc.uk).
- Diamond market sentiment has started 2016 in a reasonably positive mood as supply
management by the major producers appears to have resulted in renewed demand for rough
diamonds in certain size categories.
- The Company’s resource statement update was impacted by the Christmas shutdown by
processing laboratories in Johannesburg. All microdiamond data required to complete the
statement has now been delivered to the Company’s consultant and the document is awaiting
his final input.
Production
During the three months ended 31 December 2015, the Company’s 74%-owned subsidiary
Lace Diamond Mines (Pty) Limited (LDM) continued with the implementation of the revised
development schedule and budget for the ramp up of commercial production from
underground kimberlite mining at the Lace mine.
The 400 tonne per hour conveyor belt system was commissioned in November and
production ramp up from the UK4 Block commenced in December. The conveyor belt system
is operating to design capacity and mining is progressing without any issues with respect to
ground conditions. Following a two-week Christmas shutdown, mining has resumed in
January and remains on target to achieve production of 30,000 tonnes per month by July.
During tailings re-treatment, management determined that considerable operational
efficiencies and water savings could be achieved in the Lace processing plant by increasing
the bottom screen size from 1.00 mm to 1.25 mm. The change in bottom screen size has
been applied to kimberlite processing, which will result in a reduced recovered grade but a
higher average carat value for the diamonds recovered, as the smallest diamonds are the
lowest value stones. A final decision on the bottom screen size will be made following receipt
of the microdiamond analysis being undertaken as part of the resource statement update and
the first few diamond sales are concluded, which will provide pricing data for the different
diamond size categories. Analysis of this data will allow the plant to be optimised for
management’s key financial metric which is operating margin per tonne.
To date, management is pleased with the quality and colour of the diamonds being recovered,
including three stones greater than 10 carats. One of the diamonds is an H coloured stone of
22.11 carats which management has decided to beneficiate locally. The stone has been sold
into the Company’s beneficiation joint venture for $5000 per carat with a view to recovering an
8 carat emerald cut diamond after cutting and polishing. When the polished diamond is sold,
the Company will receive a 50% share of the cutting and polishing profit in addition to the
price of the rough.
Diamond market and sales
In addition to the sale of the 22.11 carat stone, the Company last week prepared to export
3,577 carats of diamonds recovered from development and bulk testing activities in the
second half of 2015. (A photograph of the parcel before sorting has been uploaded to the
Company’s website.) The diamonds will be sorted in Antwerp ahead of the commencement of
diamond sales in the next few months. To date a total of 7,449 carats have been produced
towards the first sale. Accumulation will continue until management is satisfied that prices will
not be adversely impacted by the sale of sub-optimal parcel sizes.
At the same time, management is carefully monitoring sentiment in the rough diamond
market, which has commenced the year in a slightly more positive mood than the latter part of
2015. Supply management by the major producers has resulted in shortages in certain size
categories resulting in improved buying interest and prices since December, particularly for
smaller goods. These improved market conditions are not expected to be sustained so
management has adopted an attitude of flexibility with respect to timing and size of the
commencement of sales.
Resource statement update
During the period, all the drilling, bulk testing and microdiamond sampling requested by the
Company’s independent consultants MPH Consulting Limited for finalisation of an update to
the Company’s resource statement was completed. Unfortunately, the extended Christmas
holiday shutdown in South Africa meant that the laboratory analysis of the microdiamond
samples was not completed until January. This data has now been forwarded to the
Company’s microdiamond consultant Dr Johan Ferreira for analysis. Dr Ferreira is a former
geostatistician for De Beers and has 28 years experience in diamond resource evaluation.
The resource statement update is in its final draft and MPH is awaiting Dr Ferreira’s report for
inclusion before it can be signed and published, hopefully within the next few weeks.
Corporate finance
In December, the Company arranged an institutional placing of shares in two tranches which
together raised gross proceeds of £4 million. The placing was completed in January. These
funds topped up the Company’s working capital requirements following agreement with the
Company’s major lender, the Industrial Development Corporation of South Africa, to continue
to capitalise interest on loan repayments throughout 2016.
Contact details:
DiamondCorp plc
Paul Loudon, Chief Executive
Tel: +27 56 216 1300
Euan Worthington, Chairman
Tel: +44 7753 862 097
UK Broker & Nomad
Panmure Gordon (UK) Limited
Dominic Morley/Adam James
Tel: +44 20 7886 2500
Johannesburg
26 January 2016
JSE Designated Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068
Date: 26/01/2016 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
