www.diamondcorp.plc.uk
DiamondCorp plc is an emerging diamond producer focused on maximising shareholder value through the development of high margin diamond production assets. The company is incorporated in the UK and the highly prospective diamondiferous regions of South Africa and Botswana are its chosen areas of operation.
DiamondCorp says bulk sampling work confirms the economic viability of South African mine
DiamondCorp (LON:DCP) said this morning bulk sampling on South Africa’s Lace Mine has underlined its economic viability.
This extended test work on Lace has confirmed the grade as 26 carats per hundred tonne, slightly ahead of expectations.
The mine’s life is expected to be more than 25 years, a period in which it will generate cashflow of £480 million.
This gives the project a net present value of £117 million.
However the group also revealed a tweak to the way it will develop Lace.
The best option is considered to be a block cave that goes straight into the high grade kimberlite.
Originally the company planned to establish a clean-up level to extract lower grade kimberlite.
The capital costs of the initial phase of mining are £11.4 million, which is comparable to the figure revealed in June once the weakness of the Rand is taken into account.
If the grade at Lace has exceeded expectations, then so has the quality of the stones.
More than 80 per cent of the diamonds by weight are gem quality and 37 per cent are larger than one-third of a carat.
The largest gem diamond recovered was 20.58 carats, while a 1.01 carat pink diamond was also unearthed.
Chief executive Paul Loudon said: “We are delighted that the effort and challenges in opening up and sampling an old kimberlite mine has been rewarded with diamond quality exceeding expectations and that the potential cashflows are now anticipated to be significantly higher than originally thought.
“Not only is the grade and carat value better than anticipated, the pipe also appears to be getting larger at depth.”
The new development option will see the DiamondCorp establish an initial block cave at the 34 level, some 10 metres below any previous development.
This will be mined for two-and-a-half years, while a second cave on the 44 level will provide a further five years worth of high quality kimberlite.
This will then be replicated in 100 metre blocks to the 84 level, or a depth of 840 metres, accessing a total of 28 million tonnes of kimberlite over a 25 year period.
DiamondCorp said a potential bonus has been identified with the “strong possibility” that the Lace pipe is 50 per cent larger in size at the 33 level than at the 25 level.
