TIDMDCP
RNS Number : 7072Q
Diamondcorp Plc
02 March 2016
2 March 2016
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" or "the Company")
RESOURCE STATEMENT
DiamondCorp, the Southern African diamond mining, development
and exploration company, is pleased to report that a new Technical
Report and Resource Statement has been prepared for the Company's
74%-owned Lace mine, in the Free State Province of South
Africa.
Highlights
-- MPH Consulting Limited of Toronto has delivered the technical
report and resource/reserve statement update, including detailed
microdiamond analysis, grade and carat value modelling completed by
Dr Johan Ferreira.
-- The report concludes that the updated resource/reserve
statement is a conservative base case with compelling evidence that
considerable grade and value per carat upside is likely which will
be defined with additional production and evaluation data.
-- When comparing to the previous mineral resource estimate
prepared for the Lace mine in March 2012, it is important to note
that the estimated recovered grade for all facies has now been
aligned with the Lace production plant utilizing 1.25 mm slotted
bottom screens, compared to 1.00 mm screens in its original design
configuration.
-- While the increase in bottom screen sizes means that
recoveries will be significantly lower in terms of grade, the carat
value of those diamonds recovered will be higher as the smallest
diamonds no longer being recovered are also the lowest value
diamonds. So while the impact on recovered grade resulting from the
change can be perceived as significant, the economic impact is
minimal.
-- 1.25 mm has been determined as the optimum bottom cut-off
screen size for the project based on trade off studies undertaken
by the Company. The change in screen size is expected to result in
considerable operational efficiencies and (in conjunction with
optical and x-ray waste sorting) up to a 50% reduction in water
consumption in the processing plant, allowing for mining of the
resource at greater than the current planned rate of 1.2 million
tonnes per annum once block caving commences.
-- The total resource tonnage in the main Lace pipe has been
estimated at 38.48 million tonnes to the 920m level, an increase of
16% from 33.12 million tonnes estimated in March 2012 to the 855m
level. The resource remains open at depth.
-- The recoverable diamonds from this resource at the increased
bottom screen size of 1.25 mm is estimated at 9.39 million carats
(March 2012: 13.39 million carats, at 1.00 mm screen size).
-- The average value of the Lace diamonds from the stone size
frequency distribution achieved with the 1.25 mm bottom screen size
has been forecast to be $164 per carat in the current market (March
2012: $160 per carat). Importantly, this price does not include any
values achieved from the recovery of special stones, for which Lace
was known during its previous production period pre-Great
Depression, including diamonds up to 122 carats in size.
-- The K4 kimberlite, which comprises 60% of the Lace resource
by tonnage and 87% of the resource by diamond content has an
estimated average recoverable grade of 40 carats per hundred tonnes
(cpht) at 1.25 mm bottom screen size (58 cpht previously at 1.00 mm
bottom screen size).
-- The base case average recoverable grade from all tonnage is
estimated at 24.4 cpht at 1.25 mm bottom screen size (40 cpht at
1.00 mm previously), equating to an average of US$40 revenue per
tonne.
-- At an exchange rate of 15.0000 South African rands to the US
dollar, the average grade and carat value equate to revenue of R600
per tonne compared with forecast mining and processing costs of
R238 per tonne for the UK4 Block and R145 per tonne for block
caving. This represents robust operating margins of 60% and 76%
respectively.
-- Within the 38.69 million tonnes of resources, 2.21 million
tonnes of the UK4 Block has been classified as a mineral reserve
between the 230 and 370m levels. This reserve comprises 1.43
million tonnes of K4 in the probable category grading 36.2 cpht and
0.78 million tonnes of low grade K6 kimberlite in the probable
category at a grade of 9.0 cpht.
-- The whole block could be mined for 60 months at a rate of
35,000 tonnes per month and generate a positive NPV of R133.3
million (US$8.9 million) and a robust IRR of 59%. It is the
Company's intention to concentrate on mining the high-grade K4
kimberlite within this reserve first while the first block cave is
established on the 500m level (being outside of the current mineral
reserve estimate). There may well be opportunities to optimize the
mine plan as more K4 is found to be present as the mine progresses.
When block caving progresses, any unmined portions of this reserve
would then be extracted in subsequent caves.
-- The small Satellite pipe which was incorporated into the
previous resource statement is not included in the new resource
statement as it is not considered a feasible mining proposition at
this stage.
-- The grade model for the UK4 Block reserve has been found to
show high precision in predicting recovered diluted grades achieved
in the bulk sampling on -250m, -290m and -310m levels.
-- Lace has been demonstrated as a reliable microdiamond
producer allowing for high-confidence grade estimates, and the
valuation data from 4,982 carats recovered during bulk sampling
similarly gives confidence to the valuation model.
-- There is compelling geological evidence that K4 and K6 grade
will improve within the block cave mining depths (and Lift 2 of the
UK4 Mine), however more evaluation work is needed to verify these
trends.
-- The CRB (country rock breccia) unit which comprises 9% of the
current resource model has been assigned zero grade at this time,
although it is known to be significantly diamondiferous. The CRB
will be bulk and microdiamond sampled in coming months and will be
incorporated into updated grade estimations as these data become
available, such that carat content at Lace is highly likely to
improve on the current estimates.
-- Kimberlite volumes and tonnages will also change as more delineation work is completed.
-- The full technical report and resource/reserve statement will
be shortly available on the Company's website at
www.diamondcorp.plc.uk.
Resource Statement
Mining Resource Kimberlite Volume Density Tonnes % Recovered Carats USD/ct
Block Classification Facies (m(3) of Grade
x 1000) Total (cpt)
---------- ---------------- ------------ ----------- -------- ----------- ------- ---------- ---------- --------
Upper
K4
mine
230-370m
levels Indicated K4 1,065.486 2.585 2,754,281 36.9% 0.365 1,005,313 $164.00
---------- ---------------- ------------ ----------- -------- ----------- ------- ---------- ---------- --------
Indicated K6 1,834.957 2.563 4,702,995 63.1% 0.090 422,329 $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Total
Indicated 2,900.443 7,457,276 100.0% 0.191 1,427,642 $164.00
------------------------------ --------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred K8 144.722 2.641 382,211 16.3% 0.160 61,154 $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred CRB 723.803 2.709 1,960,782 83.7% 0.000 - $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Total
Inferred 868.525 2,342,993 100.0% 0.026 61,154 $164.00
------------------------------ --------- ----------- -------- ----------- ------- ---------- ---------- --------
Block
Cave
1
370m-
510m
levels Inferred K4 1,626.754 2.59 4,213,293 48.4% 0.400 1,685,317 $164.00
---------- ---------------- ------------ ----------- -------- ----------- ------- ---------- ---------- --------
Inferred K6 1,262.561 2.56 3,232,157 37.1% 0.100 323,216 $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred K8 13.713 2.64 36,203 0.4% 0.160 5,793 $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred CRB 451.786 2.71 1,224,339 14.1% 0.000 - $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Total 3,354.815 8,705,993 100.0% 0.231 2,014,326 $164.00
---------------------------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Block
Cave
2
510m-
700m
levels Inferred K4 2,225.776 2.59 5,764,760 59.0% 0.400 2,305,904 $164.00
---------- ---------------- ------------ ----------- -------- ----------- ------- ---------- ---------- --------
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2016 02:00 ET (07:00 GMT)
Inferred K6 1,484.048 2.56 3,799,164 38.9% 0.100 379,916 $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred K8 0.000 2.64 - 0.0% 0.160 - $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred CRB 74.018 2.71 200,589 2.1% 0.000 - $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Total 3,783.842 9,764,513 100.0% 0.275 2,685,820 $164.00
---------------------------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Block
Cave
3
700m-
920m
levels Inferred K4 2,800.965 2.59 7,254,499 71.0% 0.400 2,901,799 $164.00
---------- ---------------- ------------ ----------- -------- ----------- ------- ---------- ---------- --------
Inferred K6 1,153.812 2.56 2,953,759 28.9% 0.100 295,376 $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred K8 0.000 2.64 - 0.0% 0.160 - $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Inferred CRB 3.577 2.71 9,694 0.1% 0.000 - $164.00
---------------- ----------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Total 3,958.354 10,217,952 100.0% 0.313 3,197,175 $164.00
---------------------------------------- ----------- -------- ----------- ------- ---------- ---------- --------
Lace
Mine
Totals Indicated 2,900.443 2.57 7,457,276 19.4% 0.191 1,427,642 $164.00
---------- ------------------------------ ----------- -------- ----------- ------- ---------- ---------- --------
Inferred 11,965.54 2.59 31,031,451 80.6% 0.256 7,958,475 $164.00
------------------------------ --------- ----------- -------- ----------- ------- ---------- ---------- --------
Total 14,865.979 2.59 38,688,458 100.0% 0.244 9,386,117 $164.00
---------------------------------------- ----------- -------- ----------- ------- ---------- ---------- --------
All figures are gross. DiamondCorp owns a 74% equity interest in
the project
Based on a recoverable grade model for the current Lace plant
configuration (+1.25mm bottom cut-off screen size)
Diamond price based on bulk sample parcels and January 2016
price book
Effective date 1 February 2016.
Reserve Statement
The UK4 Mining block constitutes a portion of the above
Indicated Resource, with reserves estimated as per the following
table:
Mining Resource Kimberlite Tonnes Recovered Carats USD/carat USD/tonne
Block Classification Facies Grade
(cpt)
----------- ----------------- ------------ ---------- ---------- -------- ---------- ----------
Upper
K4
mine
230-370m
levels Probable K4 1,427,841 0.362 516,575 $164.00 $59.33
----------- ----------------- ------------ ---------- ---------- -------- ---------- ----------
Probable K6 782,244 0.090 70,296 $164.00 $14.74
----------------- ------------------------ ---------- ---------- -------- ---------- ----------
Total
Probable 2,210,086 0.266 586,870 $164.00 $43.55
------------------------------- ---------- ---------- ---------- -------- ---------- ----------
All figures are gross. DiamondCorp owns a 74% equity interest in
the project
Based on a recoverable grade model for the current Lace plant
configuration (+1.25mm bottom cut-off screen size)
Diamond price based on bulk sample parcels and January 2016
price book
Rounding has been applied
Plant recovery 100% of recoverable grade, mining recovery
100%
Effective date 1 February 2016.
Commenting on the report, DiamondCorp CEO Paul Loudon said: 'The
new resource and reserve statements provide a much higher level of
confidence in the estimated grade and carat value of the Lace
deposit. This confirms the potential for high operating margins
increasing with depth which was one of the factors which attracted
us to the project from the outset. The forecast grade numbers are
in line with what we are seeing from the UK4 mining ramp up and the
actual carat value achieved will be known when we commence diamond
sales in Antwerp in the last week of March.'
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
Adam James/Atholl Tweedie
Tel: +44 20 7886 2500
JSE Designated Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068
SA Corporate Advisor
Qinisele Resources Proprietary Limited
Dennis Tucker/Andrew Brady
Tel: +27 11 883 6358
Competent Person
Mr. Paul Sobie, P.Geo., President of MPH Consulting Limited,
being an Independent Qualified Person and a member in good standing
of the Association of Professional Geoscientists of Ontario,
Membership # 0374, has reviewed and approved the technical content
of this news release.
The resource/reserve statement has been prepared in accordance
with the South African Code for Reporting of Mineral Resources and
Mineral Reserves (SAMREC)
Glossary of Technical Terms
"cpht" Carats per hundred tonnes
------------------- -------------------------------------------
"diamond resource" A concentration or occurrence
of diamonds of economic interest
in or on the earth's crust in
such form, quantity (volume/tonnage),
grade and value that there is
reasonable and realistic prospects
for eventual economic extraction.
The location, quantity, grade,
value, continuity and other
geological characteristics of
a Diamond Resource are known,
or estimated from specific geological
evidence, sampling and knowledge
interpreted from an appropriately
constrained geological model
------------------- -------------------------------------------
"grade" The relative mass of diamonds
in a mass of rock
------------------- -------------------------------------------
"indicated mineral That part of a diamond resource
resource" for which tonnage, densities,
shape, physical characteristics,
grade and diamond value can
be estimated with a reasonable
level of confidence. It is based
on exploration, sampling and
testing information gathered
through appropriate techniques
from locations such as outcrops,
trenches, pits, workings and
drill holes. The data must be
of sufficient confidence to
allow the application of modifying
factors in sufficient detail
to support mine planning and
evaluation of the economic viability
of the deposit. locations are
too widely or inappropriately
spaced to confirm geological
and/or grade continuity but
are spaced closely enough for
continuity to be assumed, and
sufficient diamonds have been
recovered to allow a reasonable
estimate of average diamond
value.
------------------- -------------------------------------------
"inferred mineral That part of a diamond resource
resource" for which tonnage, grade and
diamond value can be estimated
with a low level of confidence.
Geological evidence is sufficient
to imply but not verify geological
and grade continuity. It is
based on information gathered
through appropriate techniques
from locations such as outcrops,
trenches, pits, workings and
drill holes which may be of
limited or uncertain quality
and reliability.
------------------- -------------------------------------------
"kimberlite" An uneven grained, ultramafic,
intrusive rock in which the
visible minerals may include
olivine, phlogopite, pyrope
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2016 02:00 ET (07:00 GMT)
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