DiamondCorp’s Lace Mine development ahead of schedule

In its interim results for the first half, DiamondCorp (LON:DCP, JSE:DMC) revealed that the underground development of the Lace Diamond mine, in South Africa, is ahead of schedule and within budget. Meanwhile, in Botswana the company’s ‘exciting’ kimberlite exploration programme is also progressing well with each of the first four holes intersecting kimberlite.

A key financial highlight for the period was the successful £7.1m equity fundraising, which was completed in April.

“It was gratifying that after one of the toughest years on record experienced in the diamond industry, our shareholders, old and new, provided us with the development capital required to access the considerable diamond resource at Lace which exists below the -240m level,” DiamondCorp chief executive Paul Loudon commented.

At the Lace mine, DiamondCorp is focused on the development of an underground mining operation. At present it is developing a new sub-240 metre decline, which will facilitate the next phase of mining.

“The company has concentrated on development of a new decline access to kimberlite below the -240m level. The 4.5m x 4.5m decline is progressing within budget and is currently on schedule to access the -240m level by the end of 2010, slightly ahead of the original timetable.”

The -240 decline will be used to access and transport kimberlite from below the -240m level for bulk testing purposes, and crucially it will lead to the implementation of Snowden Mining’s sub-level caving plan. Subsequently, the company also intends to re-establish a full-scale mining operation, with the refurbishment of an existing mine shaft.

“Assuming a positive bulk testing grade and necessary development capital is raised, the 6m x 2m vertical shaft is planned to be re-equipped during 2011 for primary ore hoisting which will provide capacity for production from Lace to increase to 1.2 million tonnes per annum.”

Elsewhere, in Botswana, DiamondCorp is exploring a series of ‘exciting’ prospects over the Jwaneng South project area, on the PL71 Prospecting Licence. The intuitively named Jwaneng South project, is located approximately 5.5km south-east of De Beers Jwaneng mine - world’s richest diamond mine measured by value.

A six-hole drilling programme began at Jwaneng South in April, targeting the J-05 and J-12 prospects.

“The first four drill holes to a maximum of 200m vertical depth on J-05, a 2 to 4 hectare geophysical target, have all intersected kimberlite. Detailed core logging and preparation of samples for microdiamond analysis on J-05 are underway while the drilling rig is being relocated to J-12, a very large 45 hectare geophysical target.”

“We look forward to reporting in detail the results of this exploration programme in the months ahead.”

Overall, in the first six-months of 2010, the company has continued to invest in its key projects. For the six months ended 30th June 2010, DiamondCorp reported a net loss of £1.6m (H109:  £974,476 loss). In increased net loss was largely attributed to foreign exchange losses, relating to a long term loan, as well as higher non-cash charges.