Southern African diamond mining, development and exploration company DiamondCorp has encountered a few challenges during the development of its Lace diamond mine in the Free State province of South Africa.
The company said in an update on the Lace diamond mine on Tuesday that the result of these delays may place cashflow pressure on the company’s 74%-owned operating subsidiary Lace Diamond Mines in the first quarter of 2016 when debt repayments are due to commence.
As a result DiamondCorp is in detailed discussion with its primary lenders and BEE partners regarding options to alleviate cashflow pressures. The discussions have been positive and a formal request to continue interest roll-up of the Industrial Development Corporation loan until positive cashflow is achieved has been lodged.
Management does not expect any issues with respect to being granted this request, DiamondCorp said.
Despite the delays, the company reported on Tuesday that development work in the Upper K4 (UK4) block is concentrating in kimberlite on the 310 m production level in preparation for production ramp up to commence before the end of the year.
During September, tunnelling activities advanced from heavily diluted low-grade K6 kimberlite on the southern side of the kimberlite pipe into a transitional zone into higher-grade K4 kimberlite in the centre of the pipe. As a consequence, ground conditions improved and kimberlite development rates exceeded the monthly call in October.
Challenging ground conditions reported previously on the 290 m doming level have been overcome by engaging specialist contractors to make the area safe. This has been achieved with the installation of steel arched sets which provide a safe canopy for employees and equipment from potential falls of ground. The void above the canopy is now being back-filled to cushion any potential falls of ground, Diamodcorp said.
However, the time taken to install the sets and make the area safe has resulted in a delay to the blasting of the slot drive from which the initial tonnage ramp up commences, which means that the company is now behind schedule on diamonds recovered from development.
The 400 tph underground conveyor belt system, meanwhile, has been fully installed and 80% commissioned. Final electrical connections are under way and the belt is scheduled to be fully commissioned by the end of this week.
DiamondCorp says that when the conveyor is in operation, trucks will only be used to haul kimberlite from the production level to the conveyor belt tipping chamber. No trucks will be used for the continued decline development in waste rock down to the block cave level as the conveyor belt will be extended as the decline progresses.
Development costs for the project to date have averaged R49 993/m against a budget of R38 280/m, with the weakening rand continuing to impact negatively on development costs.
Following commissioning of the conveyor belts, DiamondCorp expects a reduction in development costs and an acceleration in development rates.