2nd Mar 2016 10:37
LONDON (Alliance News) - South African diamond miner DiamondCorp PLC on Wednesday said it had a "much higher level of confidence" in the estimated grade and carat value of the Lace deposit in South Africa, on receiving a resource statement and technical report.
DiamondCorp said it had received the documents from MPH Consulting Ltd of Toronto which found "compelling evidence that considerable grade and value per carat upside is likely".
The miner added estimated recovered grade for all facies has now been aligned with the Lace production plant utilizing 1.25 millimetre slotted bottom screens, compared to 1.00 millimetre screens in its original design configuration in March 2012, meaning the garde will be lower, but the value higher as the smallest diamonds no longer being recovered are also the lowest value diamonds.
DiamondCorp said the total resource tonnage estimate in the main Lace pipe was estimated at 38.5 million tonnes to the 920 metre level, up 16% from the 33.1 million tonnes estimates in March 2012 to the 855 metre level. It said the recoverable diamonds from this resource is estimated at 9.4 million carats. DiamondCorp added the resource remains open at depth.
The miner added the average value of the Lace diamonds from the stone size frequency distribution achieved was forecast to be USD164.00 per carat in the current market, up from 160.00 per carat estimated in March 2012.
It said the average grade and carat value equate to revenue of USD38.21 per tonne compared with forecast mining and processing costs of USD15.15 per tonne for the UK4 Block and USD9.23 per tonne for block caving. This represents robust operating margins of 60% and 76% respectively.
"The new resource and reserve statements provide a much higher level of confidence in the estimated grade and carat value of the Lace deposit. This confirms the potential for high operating margins increasing with depth which was one of the factors which attracted us to the project from the outset," said DiamondCorp Chief Executive Paul Loudon.
"The forecast grade numbers are in line with what we are seeing from the UK4 mining ramp up and the actual carat value achieved will be known when we commence diamond sales in Antwerp in the last week of March," Loudon added.
Shares in DiamondCorp were flat on Wednesday, having last traded at 8.75 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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