Diamondcorp Plc Lace Mine Development Activities Commence (2400W)
January 24 2013 - 2:00AM
UK Regulatory
TIDMDCP
RNS Number : 2400W
Diamondcorp Plc
24 January 2013
24 January 2013
NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE
UNITED STATES OR ANY OTHER JURISDICTION IF TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION
DiamondCorp plc
JSE share code: DMC & AIM share code: DCP
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp", "the Group" or "the Company")
Lace Mine development activities commence
-- Company fully financed for Lace Mine development
-- Group cash in accounts GBP5.5m
-- First diamonds from kimberlite expected Q3 2014
-- Peak funding for 47 level block cave estimated at GBP20.3m
-- Investment in 1.2 mtpa plant and underground development to date c.GBP18m
-- Estimated resource contains 13.4m cts of diamonds, open at depth
DiamondCorp, the Southern African diamond development and
exploration company, is pleased to announce that development
activities have commenced for the 47 level block cave at the Lace
mine, following receipt of the first US$3 million (GBP1.9 million)
tranche of loan funds from Laurelton Diamonds, Inc., a wholly-owned
subsidiary of Tiffany & Co.
The second US$3 million tranche is scheduled to be paid on 10
April 2013. The combination of funding through the Tiffany loan,
GBP4.2 million of convertible bonds (issued in December 2012) and
R220 million (GBP15.6 million) from the Industrial Development
Corporation of South Africa (as announced on 21 September 2012)
completes the R320 million (GBP23 million) Lace project financing
package.
The Main Pipe at the Lace mine contains 33.1 million tonnes of
kimberlite indicated and inferred to a depth 855m containing
approximately 13.4 million carats in both resource categories at an
average grade of 40.1 carats per hundred tonnes. The resource has
an in-ground value in excess of $2 billion at $160 per carat.
The deposit will be mined by block cave mining, with three caves
planned over the 25 year life of mine on the 47, 67 and 85 levels
(at depths of 470m, 670m and 850m respectively). The kimberlite is
open at depth, and also contains a significant bulge between 250m
and 360m depth with the potential to add additional tonnage and
diamonds not currently included in the resource statement.
The SRK Independent Engineering Report on the 47 level block
cave development published in March 2012 estimated the total
development cost (including working capital and a 15% contingency
on capital and development costs) at R384 million (GBP27 million).
The first diamonds from development are expected to be recovered in
Q3 2014, and the peak funding requirement (including working
capital) is expected in April 2015 at R286 million (GBP20.3
million) when blasting of the slot drive and doming starts to
deliver significant tonnage of kimberlite. The costs of
establishing the block cave thereafter are offset by revenues from
the sale of diamonds recovered from kimberlite mined during
development.
Approximately 600,000 tonnes of kimberlite is expected to be
extracted and processed during this period. Anticipated revenue
from the mine is forecast at R421 million (GBP30 million) during
the 43 months of development before full production of 100,000
tonnes per month is achieved. The 1.2 million tonne per annum Lace
mine is expected to produce more than 500,000 carats of diamonds
per annum at peak production.
Investment to date
DiamondCorp has invested approximately GBP18 million into the
Lace project with equity raised from shareholders since it acquired
the project in 2005. These funds have been advanced as shareholder
loans from the parent company to the 74%-owned South African
operating subsidiary Lace Diamond Mines (Pty) Limited. The funds
have been used for construction of a 1.2 mtpa processing plant, the
underground mining fleet and tunnel development to the 260m
level.
The shareholder loans and accumulated interest represent an
asset to the Company of approximately 6.6p per share as they must
be repaid from mine cashflow before any dividend distributions to
the Company and its broad-based black economic empowerment
partners, Shanduka Resources (Pty) Limited (13%) and Sphere
Investments (Pty) Limited (13%).
Development activities scheduled over the next four months
include:
-- Excavation of a new 66,000 bank cubic metre boxcut providing
the surface entrance to the twin conveyor belt and men and
materials declines for the life of mine (LOM).
-- Completion of a vent raise from the 16 level to provide
sufficient interim ventilation for continuous blasting decline
development until LOM vent shafts are raise bored.
-- Installation of a tipping arrangement on the 24 level to
allow loading of waste generated from the twin decline development
down to the 47 level. Until 2.6 km of conveyors are installed,
development waste will be hauled out of the mine by low profile
dump trucks.
-- Complete rebuild of another underground loader and two dump
trucks required to meet the scheduled development ramp up.
-- Essential upgrades to the dense media separation plant to
alleviate front-end bottlenecks in the re-crush circuit at
full-scale production. Completion of these upgrades will also allow
tailings retreatment to recommence.
-- Completion of detailed design drawings for the underground conveyor belts.
-- Definition drilling of the bulge from within the kimberlite
bulk sampling area on the 260m level.
DiamondCorp's CEO, Paul Loudon said: "We are delighted to be
underway with the 47 block cave development which will mark the
transition of DiamondCorp from explorer to underground diamond
producer. Diamond production from tailings re-treatment will
recommence during Q2, initially on one shift while the upgraded
processing plant is re-commissioned. We will then have the capacity
to ramp up to three shifts in the second half of the year if
diamond prices strengthen for small goods."
Contact details:
DiamondCorp plc
Paul Loudon, Chief Executive
Tel: +44 20 3151 0970
+27 82 824 6897
SP Angel Corporate Finance LLP
AIM Nomad and Broker
Ewan Leggat/Laura Littley
Tel: +44 20 3463 2260
Ocean Equities Limited
Guy Wilkes
Tel: +44 207 786 4370
PSG Capital (Pty) Limited
John-Paul Dicks
Tel: +27 21 887 9602
Russell & Associates
Charmane Russell/Marion Brower
Tel: +27 11 880 3924
This information is provided by RNS
The company news service from the London Stock Exchange
END
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