Half Yearly Report

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' or 'the Company' or 'the Group')

Interim Results (unaudited) for the six month period ended 30 June 2013

DiamondCorp plc, a southern Africa focussed diamond mine development and exploration company, releases its unaudited interim results for the six month period ended 30 June 2013.

HIGHLIGHTS

· On 7 January 2013, DiamondCorp finalised a R320 million (£21.23 million at June 30 exchange rate) finance package for the 47 level block cave development at the Lace Mine when it entered into a term loan agreement with Laurelton Diamonds, Inc., a wholly owned subsidiary of Tiffany & Co.('Tiffany Loan') for $6 million (£3.94 million). On 10 January 2013 and 10 April 2013, the Tiffany Loan was drawn down in two equal tranches.

· From the proceeds of the Tiffany Loan and the R59.7 million convertible bond issue completed in December 2012, R100 million (£6.64 million) was advanced to the Company's 74%-owned operating subsidiary, Lace Diamond Mines (Pty) Limited ('LDM'). These funds allowed LDM to meet the initial drawdown conditions of a R220 million project loan agreement with the Industrial Development Corporation of South Africa ('IDC Loan') signed in September 2012.

· After the period, the first R30 million (£1.99 million) tranche of the IDC loan was drawn down.

· Underground mine development commenced at Lace in the first quarter and remains on schedule and within budget for commencement of production in the first half of 2015.

· The 1.2 million tonnes per annum Lace diamond recovery plant was refurbished during the period and was successfully commissioned post the period end. Re-treatment of more than 3 million tonnes of tailings that remain on site has recommenced. The preparation of the marketing and sale of the first 5,000 carats of tailings diamonds is underway.

· A number of corporate events were finalised after the period end, including the appointment of Hulme Scholes as an independent Non-Executive Director; the relocation of the finance function from London to the Lace Mine; additional corporate overhead cost efficiencies; and a reorganisation of the Company's share capital to a par value of 0.1 pence each.

· The net loss for the six months ended 30 June 2013 was £2,198,339 (R33,125,232) v. 30 June 2012 £1,556,701 (R23,456,838).

Commenting on the results, DiamondCorp CEO Paul Loudon said: 'The period under review saw us complete the finance package and commence development of the underground mine at Lace. The mine is expected to produce up to 500,000 carats of diamonds per annum for over 25 years commencing in the first half of 2015, and heralds the transition of DiamondCorp from explorer to diamond producer. The period also marks the commencement of a long-term association with Tiffany which allows the prestigious jewellery retailer access to a new supply of diamonds that meets its quality standards and allows for increased traceability from source to end-user.'

2 September 2013

London

CONSOLIDATED INCOME STATEMENT

Six months ended 30 June 2013

Six months Six months

ended ended

30 June 30 June

2013 2012

£ £

Administrative expenses (1,484,956) (1,192,493)

Depreciation and amortisation (202,552) (387,165)

expense

OPERATING LOSS (1,687,508) (1,579,658)

Investment revenues - interest 29,128 22,957

on bank deposits

Interest expense (487,459) -

Finance costs (52,500) -

LOSS BEFORE TAX (2,198,339) (1,556,701)

Tax - -

LOSS FOR THE FINANCIAL PERIOD (2,198,339) (1,556,701)

ATTRIBUTABLE TO:

EQUITY HOLDERS OF THE PARENT (1,884,889) (1,325,656)

NON CONTROLLING INTEREST (313,450) (231,045)

(2,198,339) (1,556,701)

BASIC & DILUTED LOSS PER SHARE £0.008 £0.006

R0.121 R0.090

HEADLINE LOSS PER SHARE £0.008 £0.006

R0.121 R0.090

All of the activities of the Group are classed as continuing.

STATEMENT OF CHANGES IN EQUITY

Six months Six months

ended ended

30 June 30 June

2013 2012

£ £

Opening balance 13,072,716 16,601,837

Loss for the financial period

Attributable to equity holders (1,884,889) (1,325,656)

of the parent

Attributable to non-controlling (371,898) (231,045)

interest

New equity share capital 180,000 -

subscribed

Premium on new equity share 90,000 -

capital subscribed

Translation reserve (962,564) (539,168)

Value attributed to options granted 72,400 -

Closing balance 10,195,765 14,505,968

CONSOLIDATED BALANCE SHEET

30 June 31 December

2013 2012

£ £

NON-CURRENT ASSETS

Goodwill 4,606,026 4,606,026

Property, plant and equipment 10,167,428 8,776,273

14,773,454 13,382,299

CURRENT ASSETS

Inventories 276,809 297,474

Other receivables 592,582 195,028

Cash and cash equivalents 3,004,318 4,319,776

3,873,709 4,812,278

TOTAL ASSETS 18,647,163 18,194,577

CURRENT LIABILITIES

Other payables (302,038) (765,501)

Other current borrowings - (68,485)

SA Bond Interest Accrual (16,358) -

Convertible bond notes payable (2,576,792) (2,642,739)

Provisions (109,454) (119,745)

Derivative financial instruments (1,438,791) (1,525,391)

(4,443,433) (5,121,861)

NON-CURRENT LIABILITIES

Long term loan (4,007,965) -

NET ASSETS 10,195,765 13,072,716

EQUITY

Share capital 8,305,184 8,125,184

Share premium 26,885,360 26,795,360

Warrant reserve 92,000 92,000

Share option reserve 511,636 439,236

Translation reserve (1,712,714) (750,150)

Retained losses (22,409,549) (20,524,660)

EQUITY ATTRIBUTABLE TO EQUITY 11,671,917 14,176,970

HOLDERS OF THE PARENT

NON CONTROLLING INTEREST (1,476,152) (1,104,254)

TOTAL EQUITY 10,195,765 13,072,716

CONSOLIDATED CASH FLOW STATEMENT

Six months Six months

ended ended

30 June 30 June

2013 2012

£ £

Operating loss for the period (1,687,508) (1,579,658)

Depreciation and amortisation 202,552 387,165

Other non-cash charges - 5,051

Effect of foreign exchange translation (224,791) -

Non-cash bonus payments (in shares and

options) 289,900 -

Capitalised interest 115,280 -

Increase in receivables (397,554) (38,888)

(Increase) / Decrease in inventories 20,665 (172,467)

(Decrease) / Increase in other payables (678,428) (146,332)

NET CASH USED IN OPERATING (2,359,884) (1,545,129)

ACTIVITIES

INVESTING ACTIVITIES

Purchase of intangible assets - (454,744)

Purchase of property, plant and (2,594,366) (81,443)

equipment

Interest received 29,128 22,957

NET CASH USED IN INVESTING (2,565,238) (513,230)

ACTIVITIES

FINANCING ACTIVITIES

Proceeds on receipt of long 3,830,427 -

term loan

NET CASH FROM FINANCING ACTIVITIES 3,830,427 -

NET (DECREASE) / INCREASE IN CASH (1,094,696) (2,058,359)

AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT 4,319,776 2,632,760

BEGINNING OF PERIOD

Effect of foreign exchange (220,762) (277,826)

rate changes

CASH AND CASH EQUIVALENTS AT 3,004,318 296,575

END OF PERIOD

NOTES TO THE FINANCIAL STATEMENTS

Six months ended 30 June 2013

1. ACCOUNTING POLICIES

These interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs). The same accounting policies, presentation and methods of computation are followed in the condensed interim financial information as applied in the Group's latest annual audited financial statements. The financial figures included in this half-yearly report have been computed in accordance with IFRSs applicable to interim periods.

These interim financial statements were approved by the Board on 30 August 2013 and do not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006. The results for the year ended 31 December 2012 have been extracted from the statutory financial statements of DiamondCorp plc.

A copy of the statutory accounts for the year ended 31 December 2012 has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006; however the auditor's report did contain an emphasis of matter in respect of the material uncertainty around the company's ability to continue as a going concern.

These interim financial statements have been prepared using the accounting policies set out in the Group's 2012 statutory accounts.

Results for the six-month period ended 30 June 2013 and 30 June 2012 have not been audited.

The comparative information presented in the income statement has been prepared for the period 1 January 2012 - 30 June 2012. This has been performed in order to comply with the AIM rules and is presented solely for this purpose.

2. LOSS PER SHARE

IAS 33 "Earnings per share" requires presentation of diluted earnings per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. For a loss-making company with outstanding share options, net loss per share would only be decreased by the exercise of out-of-money options. Since it seems inappropriate to assume that option holders would exercise out-of-money options, no adjustment has been made to basic loss per share for out-of-money share options.

The calculation of basic and diluted loss per ordinary share is based on the loss attributable to equity holders of the parent of £1,839,889 for the six months ended 30 June 2013 (30 June 2012: £1,325,656) and on 276,839,478 ordinary shares (30 June 2012: 242,28,048) being the weighted-average number of ordinary shares in issue.

The Group presents and alternative measure of loss per share after excluding all capital gains and losses from the loss attributable to ordinary shareholders ("Headline earnings / (loss)"). The impact of this is as follows:

2013 2012

Basic loss per share £0.008 £0.006

R0.121 R0.090

Headline loss per share £0.008 £0.006

R0.121 R0.090

3. SHARE CAPITAL

30 June 31 December

2013 2012

Called up, allotted and fully paid

No. £ No. £

Ordinary shares

of 3 pence each 276,839,478 8,305,184 270,839,478 8,125,184

R R

125,145,004 122,432,710

In January 2013, 4,500,000 ordinary shares of 5 pence each were issued to a director and certain employees for successful completion of the project financing to fund the development of Lace mine.

In April 2013, 1,500,000 ordinary shares of 3.5 pence each were issued to a financial advisor in respect of a success fee for introducing Laurelton Diamonds, Inc., a wholly owned subsidiary of Tiffany & Co.

4. EVENTS AFTER THE REPORTING PERIOD

A special resolution was passed at the AGM held on 02 July 2013 giving the Group the option of settling the convertible bond debt through the issue of a fixed amount of shares.

Also approved at the meeting held on 02 July resolutions were passed by the majority of votes cast, approving the reorganisation of the Company's share capital.

Pursuant to the share capital reorganisation, dealings in the Company's existing ordinary shares with par value of 3 pence each ceased at the close of business on 2 July 2013 and dealings in the new ordinary shares with par value of 0.1 pence commenced on both AIM and AltX on 3 July 2013.

SHARE CAPITAL AS AT 02 JULY 2013

02 July 30 June

2013 2013

Called up, allotted and fully paid

No. £ No. £

Ordinary shares

of 3 pence each - - 276,839,478 8,305,184

02 July 30 June

2013 2013

New Ordinary shares

of 0.1 pence each 276,839,478 276,840 -

Deferred Ordinary shares

of 2.90 pence each 276,839,478 8,028,344 -

- Existing ordinary shares were sub-divided into one new ordinary share of 0.1 pence each (New Ordinary Share") and one deferred ordinary share of 2.90 pence each (Deferred Ordinary Share).

-The New Ordinary Shares continue to carry the same rights and benefits as those attached to the Company's existing ordinary shares (save for the reduction in nominal value). The number of New Ordinary Shares in issue following the Share Capital Reorganisation is identical to the number of existing ordinary shares in issue immediately prior to the Share Capital Reorganisation.

-The Deferred Ordinary Shares do not entitle the holders to (a) receive notice of or attend and vote at any general meeting of the Company; (b) to receive any dividend or other distribution; or (c) to participate in any return on capital on winding up, other than the nominal amount paid on such shares following a substantial distribution of ordinary shares in the Company.

-The Deferred Ordinary Shares are effectively valueless, non-transferable and have no effect on the economic interest of the Shareholders.

Contact details:

DiamondCorp plc

Paul Loudon, Chief Executive

Tel: +27 56 212 2930

+44 20 3151 0970

UK Broker & Nomad

Panmure Gordon (UK) Limited

Dominic Morley/Adam James/Hannah Woodley

Tel: +44 20 7886 2500

JSE Designated Advisor

Sasfin Capital (a division of Sasfin Bank Limited)Kim Dawson

Tel: +27 118097794