DiamondCorp (LON:DCP) announced today that the new decline at the Lace mine in South Africa successfully accessed kimberlite at the -260 metre bulk testing level yesterday.
Since April last year, activities at Lace, which is located near Kroonstad 200 kilometres southwest of Johannesburg, have focused on completion of the 4.5 metres x 4.5 metres decline to access kimberlite resources below any areas stoped in the past.
The decline has now accessed the kimberlite at the -260 metre level, some 20 metres below previously stoped workings, while the mine has been dewatered to -280 metres, which is about 20 metres below the sampling level despite heavy rainfall in the first months of the year. The extraction of an initial 30,000 tonnes bulk sample of kimberlite is underway. This is expected to be completed in June.
The combination of grade and carat value will determine the economics of mining the Lace kimberlite.
In preparation for processing the bulk sample of kimberlite, the dense media separation plant at Lace, with a capacity of 1.2 million tonnes per annum, has been recommissioned with feed from the kimberlite tailings remaining from mining activities which took place early in the last century.
DiamondCorp expects to know the mining grade and carat value at the top of the first mining block of the estimated 33 million tonnes of kimberlite remaining below any of the old working areas at Lace, which contains an indicated and inferred resource with an estimated 14 million carats of diamonds to the -855 metre level.
“It is very exciting to start hauling and processing fresh kimberlite from the Lace mine for the first time since mining ceased in 1931,” said chief executive of DiamondCorp Paul Loudon.
DiamondCorp noted that sold 1,321 carats of diamonds recovered during recommissioning in Johannesburg in February 2011 for US$94 per carat, compared with US$55 per carat received in September 2008, which was before the prices collapsed.
“With both current diamond prices and the long-term metrics for diamond market looking so strong, our timing looks good in terms of adding value for shareholders,” said Loudon.
Life of mine planning and the definitive cost revision for mine development is well advanced with the completion expected at the end of May.
Investors cheered the update, sending shares in the company up 4.5 percent to 11.25 pence.