In the media

Loudon upbeat as DiamondCorp reports interim operational profit

29 September 2008

Source: Mineweekly

Author: Chanel Pringle

JOHANNESBURG, South African diamond explorer and miner DiamondCorp CEO Paul Loudon is positive about the year ahead, saying that the company has joined a small group of companies operating a long-life kimberlite resource.

Loudon said in a statement to shareholders on Monday that the company’s Lace project, in Free State province, had achieved its first period of gross profit, despite issues with power, bad weather and problems in the recrush circuit.

“This is a testament to management’s ability to resolve commissioning stage operational challenges, as well as careful attention to cost control,” he commented.

The company’s gross profit from operations for the six months ended June 30, 2008, was £20 902 whereas it had not made a profit or loss in the first six months of 2007.

However, the company’s net loss widened by 7% to £1,34-million for the interim period, compared with £1,25-million the year before.

This was owing to overheads, one-off costs associated with its JSE listing, some noncash items and an income tax expense.

The company reported that it had recovered 27 103 ct of diamonds at the Lace tailings retreatment operation during the six months. This included a 34,84 ct nongem diamond.

Of these, 19 214 ct of gems were sold at an average price of $61/ct at tender in Johannesburg.

Meanwhile, the company’s accelerated development of phase two of the underground mining at the Lace diamond mine was 14 months ahead of schedule.

DiamondCorp noted that a new decline was advancing towards the Lace Satellite kimberlite pipe. It expected to start mining initial kimberlite by October.

Further, the company said that the impact of power outages and load shedding had been reduced, with a connection to a second Eskom power supply line, which services the nearby De Beers Voorspoed mine, completed.

In addition, the company said that test work on a vertical spindle impact crusher (VSI) had shown that it could “successfully liberate” from two carats for each 100 t (cpht) to three cpht of diamonds that were locked up in the recrush stockpile.

A commercial-scale VSI unit had been installed and commissioned, which Loudon said would soon be supplemented with a new primary crushing circuit to handle higher-value kimberlite from underground operations.

DiamondCorp stated that diamond recoveries from the tailings had increased to in excess of eight cpht.

Processing of the 280 000-t recrush stockpile had also started.

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