TIDMDCP
RNS Number : 6515V
Diamondcorp Plc
30 October 2014
30 October 2014
DiamondCorp plc
AIM share code: DCP & JSE share code: DMC
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp", "the Group" or "the Company")
Lace DIAMOND mine Project update
DiamondCorp, the Southern African diamond development and
exploration company, is pleased to provide the following update on
the underground development and tailings re-treatment activities at
the Lace diamond mine in the Free State province of South
Africa.
Highlights
-- The development work into Upper K4 (UK4) mining block
continues to be on schedule for commencement of mining operations
in H1 2015.
-- Members of the Association of Mineworkers and Construction
Union (AMCU) commenced industrial action at the Lace Mine last
week, however development work is continuing in the UK4 block with
non-AMCU employees.
-- The AMCU strike is in regard to its demand for the
appointment of two full-time salaried shop stewards. However, the
Company notes that AMCU already have five appointed shop stewards
at the Lace Mine.
-- It is estimated that for every two weeks the strike
continues, it will add one week to the development timetable.
-- The strike action has highlighted inefficiencies in work
place practices which will be investigated and addressed when the
striking workers return as development productivity has improved
87% per person per shift since the strike commenced.
-- Mine development costs to date are averaging R39,135 per
metre against a budget of R37,000 per metre.
-- Workplace safety remains a priority for the Company, and the
Lace project has been awarded its first 1,000 fatality-free shift
trophy by the SA Mine Health and Safety Council.
-- Installation of the underground conveyor belt system is
unaffected by the industrial action and is on schedule to be used
for mining of the UK4 block.
-- Underground drilling and bulk testing of the UK4 block
remains on schedule for the release of an updated resource
statement in Q1 2015.
-- Mining of tailings halted during the three months to 30
September 2014 while the surface earth moving fleet completed the
construction of an additional water storage dam.
-- Diamond recoveries from tailings for the nine months ended 30
September totalled 17,981 carats at a recovered grade of 5.94
carats per hundred tonnes (cpht) against a budget of 5.00 cpht.
-- Diamond sales for the nine months to 30 September 2014
totalled 16,505 carats at an average price of US$65 per carat.
-- Beneficiation of the 15.2 carat diamond recovered from the
tailings in July has been completed and the two brilliant cut
diamonds (5.33 carats and 2.07 carats) are ready for sale.
Underground Development
During the three months ended 30 September 2014, the Company's
74%-owned subsidiary Lace Diamond Mines (Pty) Limited (LDM)
commenced implementation of a revised underground development
schedule and budget which aims to bring forward the ramp up of
commercial production from underground kimberlite mining by six
months into H1 2015. The accelerated mining development is being
financed from within existing project finance facilities.
Tunnel development costs to date are averaging R39,135/m against
a revised budget of R37,000/m. The over spend continues to be the
result of increased operating costs on the Company's underground
mining fleet. However, cost saving initiatives, including the
introduction of chains to the tyres of the underground loaders and
computerisation of maintenance scheduling, are starting to show a
positive impact which should be reflected in improvements in the
cost per metre rate going forward. The overall mine development
expenditure is within budget.
Workplace safety remains a priority for the Company, and the
Lace project has been awarded its first 1,000 fatality-free shift
trophy by the SA Mine Health and Safety Council.
Underground drilling and bulk testing of the UK4 block remains
on schedule for the release of an updated resource statement in Q1
2015.
AMCU strike action
AMCU members employed at Lace commenced strike action on 23
October 2014 as a consequence of management's refusal to employ two
full-time salaried shop stewards. The Commission for Conciliation,
Mediation and Arbitration has granted AMCU a certificate for the
strike, which means it is a legal and protected strike under the
South African Labour Relations Act. However, the 'no work, no pay'
rule will apply. AMCU is the majority union at the Lace mine and
already has five appointed shop stewards in the workforce.
Until such time as the strike ends, development tunnelling in
the UK4 mining block and processing of development kimberlite will
continue with non-AMCU members.
The first week of the strike has highlighted certain workplace
inefficiencies which will be investigated and addressed when the
striking workers return. Year to date productivity on development
tunnelling prior to the strike action was 1.57 tonnes per person
per shift with three crews. Productivity since the strike commenced
is 2.87 tonnes per person per shift with one crew, an improvement
of 87% per person.
It is estimated that for every two weeks the strike continues,
it will add approximately one week to the development timetable.
Installation of the underground conveyor belt is unaffected by the
strike action and is scheduled to be commissioned in H1 2015 in
time for mining of the UK4 block.
Tailings retreatment
In the three months ended 30 September 2014, a decision was
taken to stop tailings re-treatment processing to allow the surface
earth moving fleet to complete the construction of another 150,000
cubic metre surface process water storage dam in preparation for
earlier than scheduled kimberlite mining. This activity was
successfully completed in the dry winter months ahead of the summer
rains. Water pumped from underground provides around 55% of the
Lace processing plant requirement, with the balance coming from
surface rainwater runoff.
All final modifications to the plant have been completed for
treatment of development kimberlite from the UK4 block, which is
now being trucked to surface.
Diamond sales for the nine months ended 30 September totalled
16,505 carats for proceeds of $1,072,212. The average year to date
sales price of $65 per carat is 5% above our forecast for the
year.
The 15.2 carat diamond recovered from the dumps in July was sold
into the Company's Johannesburg beneficiation joint venture at
$5,000 per carat. The stone yielded two brilliant cut diamonds of
5.33 carats and 2.07 carats which are currently awaiting sale. The
Company will receive 50% of the profit from the sales of the
polished gems.
Short-term demand for rough diamonds has softened in response to
slower polished sales and tightening liquidity as a number of banks
which finance the cutting and polishing sector have moved to reduce
their exposure to the sector. Longer-term, the outlook remains
strong as world economies continue to recover.
Contact details:
DiamondCorp plc
Paul Loudon, Chief Executive
Tel: +27 56 216 1300
Euan Worthington, Chairman
Tel: +44 7753 862 097
UK Broker & Nomad
Panmure Gordon (UK) Limited
Dominic Morley/Adam James
Tel: +44 20 7886 2500
JSE Designated Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCDMMZGNLVGDZM
Diamondcorp (LSE:DCP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Diamondcorp (LSE:DCP)
Historical Stock Chart
From Jul 2023 to Jul 2024