Lace Diamond Mine Project Update

30 April 2015

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 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

· Development work in the Upper K4 (UK4) block remains on schedule for commencement of mining operations in H2 2015, four months ahead of the original plan.

· A total of 3,321m of underground core drilling in 21 holes has delineated 2.6 million tonnes of K4 (high grade) kimberlite above the 370m level, an increase of more than 2 million tonnes over the original Lace geological model.

· The drilling of the UK4 block provides the volume data required for an updated resource statement. The final resource statement will require grade data from the bulk testing currently scheduled to be completed by the end of Q2.

· Processing of K6 kimberlite recovered from the production level drives has commenced, including recovery of a 19.83 carat clear white gem diamond, being the largest gem diamond recovered from underground development so far.

· The underground conveyor system is 91% fabricated and on site, 51% installed and on schedule for commissioning ahead of the mining ramp-up.

· Mine development costs to date are averaging R38,961 per metre against a budget of R37,000 per metre.

· Detailed technical and legal due diligence for the US$7 million royalty financing facility with Acrux Resources, as well as finalisation of detailed terms, is nearing completion and preliminary consents from lenders have been received. Subject to Board approval and signing of a satisfactory final facility agreement, it is anticipated that the drawdown of funds could be completed in the current quarter.

Underground Development

During the three months ended 31 March 2015, the Company's 74%-owned subsidiary Lace Diamond Mines (Pty) Limited (LDM) continued with the implementation of the revised development schedule and budget which aims to bring forward the ramp up of commercial production from underground kimberlite mining by four months from the original schedule in H2 2015.

Tunnel development costs to date are averaging R38,961/m against a budget of R37,000/m (reduced from R40,764/m as at end Q4 2014). The overspend continues to be the result of increased operating costs on the Company's underground mining fleet. In particular, dump truck breakdowns and repairs have been high due to the long haul distances from UK4 Block development levels to surface.

For this reason, completion of the tunnels and an underground loading chamber required for commissioning of the underground conveyor belt system is the priority development activity currently underway.

The conveyor belt is 91% fabricated, on site, and 51% installed, with the installation contractor now completing the fourth of five transfer arrangements required to link the belt to surface. The conveyor belt commissioning schedule has moved by several weeks into July but without impacting the critical path as it will still be commissioned ahead of the mining ramp up from the UK4 Block. The conveyor belt will handle both kimberlite and development waste and has the capacity to bring 400 tonnes per hour to surface (an average of 8,000 tonnes per day) compared with a maximum of 975 tonnes per day which can currently be hauled by the Company's five dump trucks. Load and haul costs are expected to be around R6,200 per metre of development using the conveyor belt compared with R13,000 per metre using trucks.

The impact of international oil price falls has had little impact on diesel costs in rand terms. The mine continues to be unaffected by Eskom load shedding and pleasingly VAT refunds are now being handled by the South African Revenue Service in a more timely manner.

Resource definition drilling

A total of 3,321m of resource definition drilling of the UK4 Block has been completed, providing the volume data required for a forthcoming resource statement update. The drilling has delineated 2.6 million tonnes of high-grade K4 kimberlite above the 370m level to the new top of the model at the 230m level, an increase of more than 2 million tonnes over that contained in the original Lace geological model which topped at the 345m level. This volume is significantly more than was initially expected.

Processing of kimberlite from development tunnels in the UK4 Block has commenced, with tonnage currently coming from lower grade K6 kimberlite. The plant is operating efficiently and diamond recoveries have included a 19.83 carat clear white gem, the largest gem diamond recovered from underground development so far. The recovery of this stone underlines the potential of Lace to produce larger gems and will have a positive impact on the average carat value of diamonds recovered.

Processing of kimberlite from development tunnels in the UK4 Block is being monitored by MPH Consulting Limited as a controlled bulk test, with individual batches of ~1,000 tonnes being processed separately and augmented with representative microdiamond sampling. These results combined with previous microdiamond analysis, which has predicted grades from the K4 unit of at least 60 carats per hundred tonnes, will provide the grade data required for the resource statement update by late Q2 2015. Subsequent valuation and sale of the recovered diamonds will provide the carat value required to complete the updated resource statement.

The potential for significant volumes of additional high-grade kimberlite above the 370m level was the catalyst for the UK4 mine plan. Mining of the UK4 Block will extract 30,000 tonnes of kimberlite per month by the longhole open stoping bottom up method. The extraction will commence in the centre of K4 unit and stoping will then progress north and south simultaneously until the contact with lower grade K6 kimberlite is encountered. A total of 1.6 million tonnes is planned to be extracted from the UK4 block while the first block cave is developed, the majority of which will be high-grade K4 kimberlite. The unmined balance of the UK4 tonnage will then fall into the first cave for extraction in the later years of the cave.

Plant and tailings retreatment

The Company's metallurgical consultants have commenced preliminary test work on the potential for installing a high volume optical and x-ray waste sorter ahead of the dense media separation plant. Such a unit could remove large volumes of internal waste from the kimberlite before processing. The K6 kimberlite contains up to 85% waste in places and the higher grade K4 kimberlite has up to 25% internal waste. Installation of a waste sorter has the potential to significantly reduce plant water and electricity consumption and could also allow the kimberlite to be processed faster than the current planned 220 tonnes per hour. If the test work is successful a unit could be installed before the mining ramp-up from the first block cave.

Tailings re-treatment processing stopped in September 2014. As tailings retreatment is a break-even proposition, there are currently no plans to resume processing until sufficient process water storage has been finalised. The mine currently has sufficient water in storage to meet all of its kimberlite processing requirements for 2015.

Acrux royalty

During the period, the Company's 74%-owned subsidiary Lace Diamond Mines (Pty) Limited ("LDM") signed a term sheet with Acrux Resources (Pty) Limited ("Acrux") pursuant to which Acrux will advance the South African equivalent of US$7 million interest free to LDM (the "Advance") in exchange for LDM granting to Acrux a 3% net revenue royalty (the "Royalty").

The Royalty is conditional on completion of satisfactory legal, financial and technical due diligence by Acrux, consents from existing lenders to LDM, and satisfactory completion of legal documentation as is usual in a transaction of this nature.

The Royalty shall be payable on the first 12 million carats of diamonds recovered from the Lace diamond mine and will be calculated on the net diamond revenue received by LDM after the deduction of diamond marketing costs. The Royalty also incurs a 2% structuring fee on the Advance. After eight years LDM will have the right to repurchase the royalty at independent valuation at that time.

The proceeds of the transaction will be used by LDM to strengthen treasury at the operating company level and provide working capital cover during the commencement and ramp-up of mining operations at Lace during H2 2015.

Technical and legal due diligence, as well as finalisation of detailed terms, is nearing completion and preliminary consents from lenders have been received. Subject to Board approval and signing of a satisfactory final facility agreement, it is anticipated that the drawdown of funds could be completed in the current quarter.

Competent Person

Mr. Paul Sobie, P.Geo., President of MPH Consulting Limited, being an Independent Qualified Person and a member in good standing of the Association of Professional Geoscientists of Ontario, Membership # 0374, has reviewed and approved the technical content of this news release.

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

JSE Designated Advisor

Sasfin Capital (a division of Sasfin Bank Limited)Megan Young

Tel: +27 11 445 8068

SA Corporate Advisor

Qinisele Resources Proprietary Limited

Dennis Tucker / Andrew Brady

Tel: +27 11 883 6358