24th Jan 2008 07:01
Diamondcorp Plc24 January 2008 DiamondCorp PLC 24 January 2008 Trading Update for the six months ending 31 December 2007 Highlights • Lace mine diamond recovery plant commissioned. • Snowden Mining Industry Consultants completed a Scoping Study which validated management's proposal for accelerated development of the Lace underground resource. • 25,266 carats of diamonds recovered from 324,045 tonnes of tailings (7.8 carats per hundred tonnes), including a 17.72 carat stone and a 13.81 carat stone. • Approximately one third of tonnage stockpiled for recrush to liberate additional diamonds locked up in +6mm to 28mm kimberlite particles. • 8,574 carats of gem diamonds sold at tender for US$548,291 ($64/carat). • 5,170 carats of industrial grade diamonds sold at tender for US$21,633 ($4 /carat). • Approximately two thirds of all diamonds produced were of gem quality, including a high proportion of clear white stones, a significant proportion of fancy yellow stones, numerous small pink and vivid purple diamonds and one small intense blue diamond. • Production during the latter part of the period was severely hampered by frequent power outages, lightning strikes, unseasonably high rainfall and problems with the plant recrush circuit. • Detailed due diligence was completed on a number of potential acquisitions and joint ventures, but none met with the management's criteria for scalability or profitability. • Management worked with Investec Bank to progress the process of obtaining a listing for DiamondCorp's shares on the JSE Limited. DiamondCorp PLC ("DiamondCorp" or "the Company"), the diamond mining companyfocused on South Africa, is pleased to make the following statement in relationto its operations for the period 1 July 2007 to 31 December 2007. Lace Mine In the last week of September, commissioning of a 1.6 million tonne per annumdense media separation plant was completed at the Company's 74% owned Lacediamond mine near Kroonstad, 200km southwest of Johannesburg. During the period, 320,045 tonnes of tailings were treated for the recovery of25,266 carats of diamonds, representing a recovered grade of 7.8 carats perhundred tonnes (cpht). Approximately one third of this tonnage remainsstockpiled for recrush to liberate additional diamonds (estimated to be up to 3cpht) locked up in +6mm to 28mm kimberlite particles. The plant recovered 25,266 carats of diamonds during the period, including a17.72 carat stone and a 13.81 carat stone. Approximately two thirds of alldiamonds produced were of gem quality, including a high proportion of clearwhite stones, a significant proportion of fancy yellow stones, numerous smallpink and vivid purple diamonds and one small intense blue diamond. During the period, 8,574 carats of gem diamonds were sold at tender for proceedsof US$548,291 ($64/carat). Also, 5,170 carats of industrial grade diamonds weresold at tender for US$21,633 ($4/carat). Of the 13,744 carats sold, 9,290 caratswere diamonds recovered during the commissioning process. The balance of caratsproduced during the period will be sold at future tenders. Commenting on the production, DiamondCorp's Managing Director Paul Loudon said:"The diamonds recovered from the tailings provide us with a window into the mainpipe. The quality of the stones continues to exceed our expectations and thesignificant proportion of fancy coloured stones augurs well for high qualityproduction from underground at Lace." Management has formulated an accelerated development plan which aims tointroduce pipe material into the mine plan by the third quarter of this year.The accelerated plan involves sinking a decline shaft into the unmined portionof the Lace satellite pipe which historically was only mined to a depth of 50m.Bulk testing followed by trial underground mining of the satellite pipekimberlite via the decline shaft will be undertaken simultaneously with therefurbishment of the existing 360m deep, 6m x 2.7m, vertical shaft whichaccesses the main Lace pipe. In December, Snowden Mining Industry Consultants Pty Ltd completed a ScopingStudy on the accelerated development plan which validated management's proposal.Work on the decline is scheduled to commence in the current quarter. In the three months following commissioning, approximately one third ofavailable production time was lost due to Eskom load shedding and power outages,equipment damage resulting from power spikes and lightning strikes, andunseasonably high rainfall. The plant also suffered problems with the recrushcircuit due to extended mechanical down time experienced with the crusher. Agreement has been reached with Eskom to access a new source of power for Lacefrom the dedicated power line supplying the neighbouring De Beers Voorspoedmine. This power source will come on line within the next six months, and willprovide Lace with all the power it requires for the Phase Two undergrounddevelopment. It will also mean that Lace has access to two separate sources ofpower from different parts of the Free State, which may alleviate the number ofpower outages encountered during Eskom load shedding which, by all accounts, islikely to continue in the foreseeable future. Until this supply is connected,the Lace operation may continue to suffer from power outages. Strategic Transactions During the period under review, management completed due diligence on a numberof potential diamond acquisitions and joint ventures. None of the opportunitiesmet with management's requirement for scalability or profitability so no furtheraction will be taken. Management continues to take an active approach toidentifying additional opportunities. Corporate Management worked with Investec Bank during the quarter to progress the processof obtaining a listing for DiamondCorp's shares on the JSE Limited. For further information, please contact: Paul Loudon, Managing Director and CEODiamondcorp plc+44 20 7256 2651 Joe Nally/Ivonne CantuCenkos Securities plc+44 20 7397 8900 Robert Smith/Cindy StoutjesdykInvestec Bank Limited+27 11 286 7662 Jane Stacey/Arabella HobbsConduit PR+44 20 7429 6606/+44 792 292 3306 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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