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Lace Diamond Mine - March Quarter Diamond sales and 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
MARCH QUARTER DIAMOND SALES AND PROJECT UPDATE
DiamondCorp, the Southern African diamond mining, development and exploration company,
is pleased to provide the following update on diamond sales and March quarter production
from the Lace diamond mine in the Free State province of South Africa.
Highlights
A total of 8,648 carats of diamonds have been sold through a combination of direct sales and
competitive tender, marking the first sale of kimberlite diamonds from the Lace mine since
1931.
The Company experienced good demand for its production in all size categories, and all lots
offered for sale were sold.
6,247 carats were diamonds greater than 1.25 mm in diameter which were recovered from
kimberlite development and production ramp up. These diamonds, which are representative
of the plant in its current production configuration, were sold for a total of US$1.09 million,
representing an average of $175 per carat.
2,401 carats were from tailings production and fine diamonds less than 1.25 mm in diameter
recovered during bulk testing when the plant was configured with finer bottom screens. These
diamonds sold for a total of $0.046 million representing $19 per carat.
Two special stones were included in the sales. A 22.11 carat diamond reported previously
which was sold into the Company's beneficiation joint venture as an H coloured stone at
$5,000 per carat and a 1.08 carat Type II purple stone which sold at tender for $6,363 per
carat.
The purple diamond is an early indicator of the extra value that Type II and coloured stones
can add to the Lace resource.
The 22.11 carat stone has been cut and polished into two stones – a 7.19 carat F coloured
VVS2 emerald shape diamond and a E/F colour 0.85 carat pear shape diamond. The
Company will receive an additional 50% of the profit from these stones when the polished
diamonds are sold.
The significant increase in colour achieved when these stones were cut and polished is also
an early indicator of the potential value accretion beneficiation can add to the Lace resource.
Production from Lace in the first three months of 2016 comprised 6,324 tonnes of K4
kimberlite at an average recovered grade of 36 carats per hundred tonnes (cpht), 8,327
tonnes of K6 kimberlite from ventilation tunnel development at average recovered grade of 8
cpht and 18,307 tonnes of tailings at an average recovered grade of 5 cpht. Total diamonds
recovered for the period were 3,438 carats.
Blasting of the slot for the first production trough in the Upper K4 Block together with a 1,500
tonne underground ore pass and silo is on track for production to achieve 30,000 tonnes of
kimberlite mining per month from July onwards.
Diamond market and sales
Management commenced diamond sales in the last week of March through a combination of
direct sales and competitive tender, marking the first sale of kimberlite diamonds from the
Lace mine since 1931.The large number of diamantaires who booked viewing of the
diamonds on offer and the prices achieved has indicated that strong demand exists for the
Lace production.
A total of 8,648 carats of diamonds were sold, comprising 6,247 carats of kimberlite diamonds
greater than 1.25 mm in diameter and 2,401 carats of tailings diamonds and fine diamonds
less than 1.25 mm in diameter recovered during bulk testing when the plant was configured
with finer bottom screens. The kimberlite diamonds sold for $1.09 million, representing an
average of $175 per carat, and the tailings and fine diamonds sold for $0.046 million,
representing an average of $19 per carat.
Two special stones were included in the sales: a 22.11 carat diamond reported previously
which was sold into the Company's beneficiation joint venture as an H coloured stone at
$5,000 per carat and a 1.08 carat Type II purple stone which sold at tender for $6,363 per
carat. The purple diamond is an early indicator of the extra value that Type II and coloured
stones can add to the Lace resource.
The 22.11 carat stone has been cut and polished into two stones – a 7.19 carat F coloured
VVS2 emerald shape diamond and a E/F colour 0.85 carat pear shape diamond awaiting GIA
certification. The Company will receive an additional 50% of the profit from these stones when
the polished diamonds are sold. The significant increase in colour achieved when these
stones were cut and polished is also an early indicator of the potential value accretion
beneficiation can add to the Lace resource.
Commenting on the results of the initial diamond sales, DiamondCorp CEO Paul Loudon said:
„We are extremely pleased with the level of demand shown for the Lace production and the
prices we achieved in all size categories. Overall sentiment in the diamond market remains
relatively positive compared to the end of 2015, and the price increases seen in January are
being maintained.
March quarter production
During the three months ended 31 March 2016, 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.
Underground mining and development resumed in January and remains on target to achieve
production of 30,000 tonnes per month by July. Tailings retreatment has also resumed as an
adjunct to processing of kimberlite from underground.
Production from Lace in the first three months comprised 6,324 tonnes of K4 kimberlite at an
average recovered grade of 36 carats per hundred tonnes (cpht), 8,327 tonnes of K6
kimberlite from ventilation tunnel development at average recovered grade of 8 cpht and
18,307 tonnes of tailings at an average recovered grade of 5 cpht. Total diamonds recovered
for the period was 3,438 carats.
Blasting of the slot for the first production trough in the Upper K4 Block together with a 1,500
tonne underground ore pass and silo is on track for production to achieve 30,000 tonnes of
kimberlite mining per month from July onwards.
The 400 tonne per hour conveyor belt system is performing well and the 200 tonne per hour
dense media separation plant is now operational in production mode, with bottom screens set
at 1.25 mm bottom screen size.
The only operational difficulty being experienced is availability of trucks and loaders on the
production level. This matter is being addressed with the proposed purchase of near new
rolling stock lying idle at one of several third party mines which have shut as a result of
commodity price weaknesses. The purchase of these trucks and loaders from existing cash
resources is due to be completed in the coming month, ensuring that the truck availability
required to deliver 30,000 tonnes per month of kimberlite to the conveyor belt is on place
when it is required.
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
Adam James/Atholl Tweedie
Tel: +44 20 7886 2500
5 April 2016
Johannesburg
JSE Designated Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068
Date: 05/04/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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