In the media

DiamondCorp expects new mine plan for Lace underground by end-August

31 July 2009

Source: Miningweekly

Author: Esmarie Swanepoel

JOHANNESBURG (miningweekly.com) — Emerging diamond producer DiamondCorp on Friday reported it had engaged Snowden Group to design and cost a new mine plan for the underground development at Lace.

The new design would incorporate the recently discovered level plans from mining and development, which took place prior to October 1931.

The Snowden report is expected to be completed by the end of August alongside a feasibility study and resource statement upgrade.

These reports will be delivered to DiamondCorp’s black economic-empowerment (BEE) partners Shanduka Resources and Sphere Investments at the time, thereby fulfilling its obligations with respect to a cash call on the BEE partners for R26-million towards the Lace underground development costs.

Meanwhile, DiamondCorp announced that it had completed bulk testing of the Lace satellite pipe at the -75m level, recovering about 808,21 ct of diamonds, with about 11 380 t of kimberlite treated for the recovery.

This represents a recovered grade of 7,1 ct/100 t compared with a zero grade assigned to the satellite pipe in the company’s resource statement.

The diamonds comprised 506,56 ct of gem diamonds and 301,65 ct of non-gem diamonds. DiamondCorp noted that the gem diamonds were tendered in Johannesburg during July for R446 979, representing a sales price of $108/ct, 36% higher than the $79/ct achieved for gems recovered from main pipe kimberlite dump material during the commissioning of the primary crushing circuit in May.

The sample contained a total of 6,803 diamonds, with nine stones larger than two carats. The company noted that the largest stone recovered was a 17,43 ct brown diamond and the most valuable was a 5,07 c SI1 sawable which sold for $1 109/ct.

In addition to the satellite pipe diamonds, DiamondCorp tendered a further 422,57 ct of diamonds recovered from kimberlite dump material during crusher commissioning, of which 154 91 ct were gem diamonds which sold for R228 990, representing $181/ct.

The largest stone in this parcel was a 3,37 ct SI1 sawable which sold for $1 620/ct.

“Bulk testing of the satellite pipe has confirmed the high quality of the Lace diamonds and we are delighted with the prices we have received for the gems recovered from primary kimberlites in these depressed times. These prices suggest to us that in normal market conditions, the Lace gems will attract prices at least equal to the US$125 per carat originally estimated in 2006,” said DiamondCorp MD and CEO Paul Loudon.

However, the company reported that while the diamond quality was high, the grade of the satellite pipe was subeconomic at the -75m-level. The main pipe kimberlite below previous stoping activities at the -240m level had to be accessed before mining could restart. Until such time, the Lace processing plant would be placed on care-and-maintenance.

“Economic kimberlite above the -240m level and outside our formal resource base would have been a great bonus in delivering early cashflow. However, we will now focus our efforts on accessing the 6,57-million tons of kimberlite between the -240 m and -345 m levels, and the inferred resource of 28-million tons of kimberlite estimated by our competent person to exist between the -345 m level and the -855 m level, which contains an estimated 12-million carats of high quality, high value diamonds at an estimated grade of 42 ct/100,” he added.

A second bulk test of material from the previously unmined kimberlite pillar surrounding the prospect shaft at the edge of the Lace main pipe openpit has been abandoned for geotechnical reasons.

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