The processing plant
at DiamondCore’s Lace
mine in the Free State
 
London, England — MININGREVIEW.COM — 29 January 2009 – Emerging diamond producer DiamondCorp plc has ceased tailings re-treatment at its Lace diamond mine near Kroonstad and is focusing all its efforts on underground kimberlite mining.

A statement released here points out that, in contrast with the general situation, DiamondCorp made the timely decision last year to accelerate underground development of the mine. As a result, mining of higher value kimberlite is now taking over from tailings re-treatment activities, which have become uneconomic as a result of a fall in diamond prices.

“Importantly, we have also been granted the mining right for underground operations, meaning we are not limited in any way in the speed with which we can ramp up to full underground production,” said CEO Paul Loudon. As a result we are maximising higher value underground production, including accelerated access to the potentially very high-grade hypabyssal kimberlite in the main pipe.”

DiamondCorp estimates that it will generate six times the number of carats from every 100 tonnes of material it treats by switching the focus to underground mining.

“The world wide economic downturn has impacted significantly on the diamond market, with prices received for Lace diamonds falling 50% during the fourth quarter of 2008. The accelerated Phase Two development programme targets kimberlite with the potential for profit at these lower prices,” said Loudon.

“Despite difficult debt and equity markets for junior resource companies, we are pleased to have raised sufficient debt and equity during 2008 to fund this accelerated development programme.

While the reduced demand and lower diamond prices are expected to be sustained throughout 2009, the impact on DiamondCorp is cushioned somewhat by the depreciation of the South African rand against the dollar,” he added.

“I am confident that DiamondCorp is positioned well to weather these challenging trading conditions, as it reaches the final stretch in the development of the high-value, long-life Lace mine,” he concluded.

Approximately 35 million tonnes of kimberlite have been outlined in the main Lace pipe between the 240m and the 855m levels, containing an estimated 13.8 million carats of diamonds at an average grade of 42 cpht. A further 3.5 million tonnes of kimberlite also exists in a satellite pipe 30m to the west of the main pipe.