In the media

Gem junior accelerates Free State project

04 March 2008

Source: Mineweekly

Author: Matthew Hill

Aim-listed gem producer DiamondCorp said on Tuesday that it would bring the second phase of underground production at its Lace mine in the Free State into production in the second half of 2008, one year ahead of plans.

The company said that the mine was "at the mercy of Eskom" for now, but that it would start getting alternative power by midyear.

Further, DiamondCorp reported that it should complete its application to list on the JSE in "the next few weeks", chairperson Euan Worthington stated.

"After that, and when market conditions improve, we are likely to issue a tranche of new shares to South African investors to enhance liquidity and provide capex for underground mine development and a milling circuit in the processing plant," it said in a statement distributed by the Regulatory News Service.

This was the second time that DiamondCorp had pushed back its Johannesburg listing.

UNDERGROUND MINE

The company said that an underground ramp was "well advanced towards the primary kimberlite and we are on target to take a bulk sample from there in the third quarter" of 2008.

DiamondCorp said that if it received the requisite permitting, it could start processing underground ore by the end of the year.

The company had since September been treating tailings material at Lace, located near Kroonstad, from which it recovered 25 266 ct in three months.

POWER SUPPLY

High rainfall and Eskom's power cuts hit the company's production, but it said that it had agreed with the power parastatal to access power from world number-one diamond producer De Beers' nearby Voorspoed mine.

"This supply should come on line within the next six months and will provide Lace with all the power it requires for the phase two underground operation," DiamondCorp said. "In the short term, Lace is still at the mercy of Eskom and South Africa's power problems, but by midyear we should have access to two separate electricity supplies from different areas of the Free State."

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