TIDMDCP
RNS Number : 6390H
Diamondcorp Plc
24 June 2013
24 June 2013
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 update
DiamondCorp, the Southern African diamond development and
exploration company, is pleased to provide the following update on
activities relating to the 47 level block cave development at the
Lace mine in the Free State province of South Africa.
Highlights
-- Treatment plant modifications completed on schedule and
within budget. Plant commissioning underway with tailings
retreatment to re-commence next week. Initial sale of tailings
diamonds planned for September/October
-- Underground development activities ramp up on schedule and under budget.
-- Successful recruitment of experienced underground personnel
continues on schedule, allowing underground development to move to
three shift continuous operations next month.
-- The new boxcut excavation was circa 75% complete at the end
of May and costs are significantly under budget.
-- Owner-operated mining fleet providing over 90% availability.
Two additional underground loaders and a 20 tonne dump truck
rebuilt in-house on schedule and within budget during the current
quarter.
-- The EPCM contract for the design, fabrication and
installation of the underground conveyor belts has been let and the
design work is 100% complete. Major conveyor component orders have
been placed and exchange rates on imported items fixed.
-- Underground diamond drill rig delivered and 2,000m of
underground core drilling planned before year end, including
definition of the bulge.
Treatment Plant Commissioning
The Company has completed the required modifications to the 1.2
million tonne per annum Lace processing plant to allow seamless
transition from treatment of the tailings to underground
kimberlite. Plant commissioning is underway and re-treatment of
tailings will commence next week. The modifications were completed
on schedule and within budget.
Tailings re-treatment will operate initially on a single shift
until the market price for the Lace tailings diamonds is
established with the first sale anticipated in September. If prices
achieved result in sufficiently attractive operating margins, the
Company will look to increase to two shifts and potentially three
shift operations before year end as approximately 3.5 million
tonnes of tailings remain on site and available for processing.
Tailings retreatment economics should be assisted by the recent
weakness in the South African Rand and the reported improvement in
diamond prices.
Development Activities April-June 2013
Surface and underground development activities accelerated in
the period April to June. Trackless mining crews focussed their
blasting activities on upper level conveyor belt declines and the
loading loop on the 200m level. A handheld drilling crew advanced
the 165m level vent raise which will allow temporary ventilation
for continuous blasting conditions down to the 470m level.
Crews achieved the scheduled development metres during the
period with cumulative cost per metre to the end of May c.15% under
budget due to tight cost control and the operational efficiency of
the Company's owner-operated mining fleet.
The Company continues to be successful in recruiting experienced
underground personnel. The total mine workforce now stands at 161
employees and underground development will move to three shift
continuous operations in July. Change houses sufficient to
accommodate more than 300 employees at full-scale operations will
soon be completed.
Excavation of a new 66,000 bank cubic metre (bcm) boxcut which
will provide the surface entrance to the twin conveyor belt and
services declines for the life of the mine is 75% complete. The
boxcut is three weeks behind schedule due to encountering more
competent ground earlier than expected which is slowing down the
mining rate. This delay will have no impact on the overall
development schedule as the activity is not on the critical path
and the more competent ground is a positive with respect to mine
portal stability. The boxcut development is 40% under budget on a
bcm basis, as a result of owner-operated fleet efficiencies.
Mining fleet rebuild programme
The Company's decision to develop a core competency in
rebuilding in-house its heavy equipment mining fleet is already
yielding results in terms of operating efficiencies. The first
fleet of rebuilt underground trucks and loaders are providing
better than 90% availability and operating significantly under
budget with respect to diesel consumption.
In the past three months, a 9.5 tonne underground loader, a 7.4
tonne low profile underground loader and a 20 tonne underground
dump truck have been completely stripped and rebuilt in house on
schedule and within budget. The Company's heavy equipment workshop
is rebuilding these machines for between 25-50% of the price of new
machines. Two more loaders, two more 20 tonne dump trucks and a
single boom face drilling rig are next in line to be rebuilt.
Other activities
During the past quarter, the engineering, procurement, and
construction management ("EPCM") contract for the underground
conveyor belt design, fabrication and installation was awarded. The
design work is 100% complete and detailed drawings are now being
generated and verified. Orders have been placed for the major
imported belt and drive components, thereby fixing exchange
rates.
The Company has taken delivery of a new Boart Longyear LM30
underground diamond drill rig and a programme of 2,000m of
underground core drilled is planned to be completed before the end
of the year. This drilling will be undertaken from inside the
kimberlite to better define margins of the bulge as well as the 47
level block cave area.
Corporate and administration
The Company's AGM will be held at 2pm on Tuesday 2 July 2013 at
the offices of City Group plc, 30 City Road, London, EC1Y 2AG.
In addition to routine agenda items, shareholders are being
asked to approve a change in the nominal value of the Company's
existing shares. The interests of existing shareholders (both in
terms of their economic interest and voting rights) will not be
diluted by the capital re-organisation and neither will it impact
on the number of ordinary shares in issue.
The Company currently has project debt facilities totalling R320
million (GBP21.3 million) available to it which is sufficient to
fully finance the 47 level block cave development at the Lace
Mine.
Contact details:
DiamondCorp plc UK Broker & Nomad
Paul Loudon, Chief Executive Panmure Gordon (UK) Limited
Tel: +27 56 212 2930 Dominic Morley/Adam James/Hannah
Euan Worthington, Chairman Woodley
Tel: +44 20 3151 0970 Tel: +44 20 7886 2500
------------------------------ ----------------------------------
Joint Broker JSE Designated Advisor
SP Angel Corporate Finance Sasfin Capital (a division
LLP of Sasfin Bank Limited)
Ewan Leggat/Laura Littley Kim Dawson
Tel: +44 20 3463 2260 Tel: +27 118097794
------------------------------ ----------------------------------
DiamondCorp Overview
The Lace mine (DiamondCorp 74% interest) contains 33.1 million
tonnes of kimberlite with an indicated and inferred resource to a
depth of 855m containing approximately 13.4 million carats at an
average grade of 40.1 carats per hundred tonnes. At a carat value
of $160 per carat, the resource has an in-ground value in excess of
$2.1 billion. The deposit will be mined by block cave mining, with
three caves planned over the next 25 years 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 47 Level block cave development is forecast to cost R286
million (GBP19 million) and commence commercial production in the
first half of 2015. The development is fully financed through R320
million (GBP21.3 million) of project debt facilities provided by
the Industrial Development Corporation of SA, Tiffany & Co.
subsidiary Laurelton Diamonds and DiamondCorp convertible
bonds.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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