41% Increase in Ellendale 9 Resource
July 03 2007 - 3:00AM
UK Regulatory
KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634
ASX/AIM MEDIA Release 3 July 2007
41% INCREASE IN ELLENDALE 9 RESOURCE
Predominantly High Value Ellendale 9 East
* Updated resource 29.3Mt at 5.4cpht for 1.6M carats.
* Ellendale 9 resource model revised due to positive variances between actual
mined tonnages and predicted resource tonnages.
* A significant proportion of the increase comes from the Eastern Lobe of
Pipe 9, which produces the highest value diamonds at Ellendale.
* Updated mining model being prepared with the additional tonnages of ore
expected to significantly improve the waste:ore ratio, resulting in lower
unit mining costs than previously expected.
* Diamond core drilling planned to test other lithologies within Ellendale
Pipe 9 with the potential to further increase the resource.
Kimberley Diamond Company NL (ASX: KIM, AIM: KDC - Kimberley) is pleased to
announce a substantial increase in the mineral resource inventory for its
Ellendale 9 Project in Western Australia following completion of a revised
geological model for the deposit. The new resource, which more accurately
reflects mining practice at Ellendale, represents a 41 percent increase in both
tonnage and contained carats after allowing for mining depletion over the past
12 months.
The updated resource for Ellendale 9 totals 29.3 million tonnes at 5.4cpht
(carats per hundred tonnes) for 1.6 million carats (refer to full resource
table below). This is a 41 percent increase on the total resource depleted for
Ellendale 9 reported by Kimberley as at 30 June 2006 (20.5 million tonnes at
5.4cpht for 1.1 million contained carats). The updated resource takes into
account production from Ellendale 9 up to May 2007.
Kimberley commissioned a review of its resource model for Ellendale 9 - the
first of its two production centres at Ellendale - in light of inconsistencies
between actual mined tonnages and the tonnages predicted from the model.
Since the commencement of mining at Ellendale 9 in mid-2002, the operation has
consistently delivered significantly higher, actual mined tonnages than
predicted by the model - an overcall of approximately 17 percent over the
life-of-mine to date. In the last three months, this variance has increased to
40 percent.
The revised model more accurately reconciles what is actually being mined with
the geological model, with the re-interpretation resulting in the
identification of an additional 9 million tonnes of ore through the
classification of transitional material that was previously excluded from the
model as ore. The additional tonnages are expected to improve the waste ratio
within the Ellendale 9 pit, potentially enhancing the modelled economics of the
operation.
Updated Resource Model
Kimberley's mining operations at Ellendale utilise geologically-based grade
control with fragmental lamproite (tuff) taken as ore and magmatic lamproite
and sandstone (magmatics) taken as waste. During early stages of narrow
diameter drilling of the Ellendale 9 lamproite pipe, a transitional unit
between the tuff and magmatics was identified which was thought to be
dominantly an ultramafic magmatic breccia. This material was given the
abbreviation UBX in geological logging.
Generally speaking, material was classified as UBX if the logging geologist
could not determine whether the drilling chips being logged were magmatic or
tuffaceous lamproite.
As mining has progressed over the past two years into fresher rocks, it has
become clear that the UBX or transitional material is in fact highly variable
in character, with much of the material containing coarse volcanic rocks
(agglomeratic tuffs) which typically carry the same diamond grade as the finer,
lapilli tuff recognised in most tuffaceous areas of the pipe. It has also
evident that a significant proportion of the material classified as `'magmatic"
from aircore drilling, is in fact agglomeratic tuff, particularly in the
Eastern Lobe of Ellendale 9.
Mining practice and detailed mapping within the Ellendale 9 pit indicates that
significant volumes of material previously classified as either UBX or
magmatics should be re-classified as ore. For the resource estimate, this
material has been given an Inferred classification due to uncertainties about
the distribution of grade within this unit.
The re-interpretation of the geological model has resulted in the addition of
some 9 million tonnes of ore, with much of the increase coming from the Eastern
Lobe of the pipe. Significantly, the Eastern Lobe also has the highest value
diamonds with sales values of US$370/carat.
The revised Resource Statement for Ellendale 9 as at 1 June 2007 is set out
below.
ELLENDALE 9 RESOURCE STATEMENT AT 1 JUNE 2007
Resource Tonnes Carats Grade
Classification (cpht)
Western Lobe Measured 4,310,000 289,300 6.7
Indicated 8,516,000 497,000 5.8
Inferred 3,385,000 207,000 6.1
Subtotal 16,211,000 993,300 6.1
Eastern Lobe Measured 335,000 19,900 5.9
Indicated 3,442,000 159,400 4.6
Inferred 9,306,000 416,200 4.5
Subtotal 13,083,000 595,500 4.6
Ellendale 9 Total Measured 4,645,000 309,200 6.7
Indicated 11,958,000 656,400 5.5
Inferred 12,691,000 623,200 4.9
Total 29,294,000 1,588,800 5.4
NOTES
1. Resources depleted to May 2007.
2. The resource has been calculated from aircore drilling (to establish
lithologies) and large diameter drilling to define grade.
3. For the resource, diamonds were recovered in the 1.2 to 14mm range.
4. Diamond values have been established from sales of production and mine
development diamonds in Antwerp over the past 5 years. A value for Eastern
Lobe diamonds has been established at US$370/ct and at US$200/ct for the
Western Lobe. The variation in value is related to size distribution and
assortment characteristics.
5. Resource classification complies with the JORC Code (2004).
6. All material logged as UBX has been classified as Inferred because of
uncertainties in grade distribution for this unit.
7. Rounding of tonnes to the nearest 1000 and carats to the nearest 100 may
result in computational discrepancies in the statement.
8. Insitu resource does not include metallurgical recovery factors, mining
dilution or change in bottom screen size in production plants.
9. The resource has been calculated with 0 carats per hundred tonnes (cpht)
cut-off.
10. The resource has been calculated down to a reduced level (RL) of 0 metres
above mean sea level. This equates to about 130m below the initial land
surface.
Updated Mining Model and Diamond Drilling
While a new mining model has yet to be defined for Ellendale 9, the increase in
the tonnages of ore within the Eastern Lobe is expected to have a significant
impact on the waste to ore ratio. The reduction in overall mine waste as a
result of the geological reconciliation is expected to further reduce the
overall mine strip ratio for Ellendale 9.
The new geological interpretation of Ellendale 9 is still conservative, and
Kimberley's geological team believes that there is further potential to
increase the resource inventory in instances where aircore drill chips have
been relied upon for rock identifications. The better definition of lithologies
within the pipe, particularly if mining has not clearly indicated that material
is tuff rather than magmatics, may result in further significant increases in
the amount of tuffaceous material.
To explore this possibility, a diamond core drilling program is planned,
initially focusing on the Eastern Lobe of Pipe 9. Eventually, diamond drilling
will be extended across the entire pipe, as diamond core drilling will
incontrovertibly identify lamproite lithologies. It is anticipated that this
work could add significant additional resources to the Ellendale 9 mining
project.
Commenting on the resource upgrade, Kimberley's Chairman, Mr Miles Kennedy,
said: "The excellent work carried out by our geological team has identified
significant resource upside within Pipe 9. The consistent overcall of mined
tonnages against the resource model has resulted in a significant redefinition
of our geological thinking about the classification of transitional material."
"The result is a substantial upgrade in resource tonnages and a significant
change in our methodologies which have important implications for other pipes
in the field," Mr Kennedy continued. "Clearly, narrow diameter aircore drilling
is a very limited exploration tool in assessing the broader potential of the
pipes and, based on our mining experience to date, there is clearly significant
upside which cannot be measured in the early stages of exploration."
"We plan to re-assess Pipe 9 and, eventually, test other pipes in the field
using diamond core drilling, and we expect that this will result in further
significant additions to our resource inventory," he said.
The resource information in this section of this report is based on data
compiled by Mr David Jones BSc (Hons) MSc of Ascidian Prospecting Pty Ltd, who
is a corporation member of the Australasian Institute of Mining and Metallurgy.
Mr Jones has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the
December 2004 edition of the Australasian Code of Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code). Mr Jones has consented
to the inclusion of this information in the form and context in which it
appears in this report. Shareholders who are not familiar with the definition
of Mineral Resources are directed to the website of the Australian Joint Ore
Reserves Committee (JORC) at www.jorc.org/main.php for future information.
The Australian Stock Exchange has not reviewed and does not accept
responsibility for the accuracy or adequacy of this release.
The Company's Nominated Advisor is RFC Corporate Finance Ltd, contact Steve
Allen or Stuart Laing - phone +618 9480 2500.
- ENDS -
Released by: On behalf of:
Nicholas Read Miles Kennedy - Chairman
Read Corporate Kimberley Diamond Company NL
Telephone: (+61-8) 9388 1474 Telephone: (+61-8) 9321 5887
KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634
12 WALKER AVENUE WEST PERTH 6005 WESTERN AUSTRALIA PO BOX 806 WEST PERTH
WESTERN AUSTRALIA 6872
TEL (+61-8) 9321 5887 FAX (+61-8) 9321 5884 EMAIL general@kimres.com.au WWW
www.kimberleydiamondco.com.au
END
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