KIM Kimcor

RNS Number:2813V
KimCor Diamonds plc
23 April 2007

                                                                   23 April 2007
                                                                                
                              KIMCOR DIAMONDS PLC

                               Operations Update

The Board of KimCor ("KimCor" or the "Company"), a diamond producing and
exploration company with properties in South Africa, is pleased to provide the
market with an operations update.

Highlights:

   *Water supply issue at Bellsbank has been resolved by the installation of
    a 2.5km long pipeline;
   *The new water supply will allow the plant to operate up to a capacity of
    50,000 tonnes of tailing feed per month;
   *New mining regime to result in the recovery of the same total number of
    carats but over a longer life of mine and at a lower cost per carat
    produced;
   *An independent review of Koffiefontein has produced new analyses for
    priority targets;
   *Quotes are being sourced for diamond drill rig hire to begin evaluation
    work on the Nooitgedacht kimberlite pipe; and
   *Close working relationship established with a South African mining and
    exploration company with the objective of using its in-country expertise and
    contacts to source diamond properties.

Bellsbank

The Company is pleased to announce that it has resolved the water supply issue,
caused by a regional scale lowering of the water table, which had severely
restricted production at the Bellsbank plant since commissioning. Resolution has
been achieved by the installation of a 2.5km long pipeline to deliver water to
the Bellsbank plant from a neighbouring mine. Sufficient water is currently
being delivered to permit the plant to operate at a capacity of 60,000 tonnes of
tailing feed per month.

The water restrictions had previously limited production to less than half of
the design capacity. The plant is now able to operate on a continuous basis on a
full 26 day cycle.

During the period of restricted production, the Company undertook a detailed
review of the tailing resource at Bellsbank. As a result of this review, a
number of significant changes have been made to the mining programme aimed at
further improving productivity, simplifying the mining process, reducing unit
cash costs and maximising the benefits that can be achieved through economies of
scale.

The two key outcomes of the review were as follows:


(i) the installation of a new waste conveyor system that eliminates the need to 
employ a mining contractor. The Board expects that this initiative will result 
in a reduction in unit cash costs per tonne mined and processed of approximately 
$0.70 per tonne. The budgeted cash cost of $2.50 per tonne is therefore expected 
to be reduced by 28 percent to $1.80 per tonne; and

(ii) the alteration of the mining system at Bellsbank such that no segregation 
of feed material will take place. All tailing material and internal waste is to 
be treated as a global resource with all material being processed through the 
Bellsbank plant. This process is expected to lower the average recoverable 
grade, but this is expected to be offset by an extension of the life of mine as 
the total tonnage of the mineable resource will increase.

It is therefore expected that the new mining regime will result in the recovery
of the same total number of carats as proposed in the competent person's report
set out in the Company's admission document published on 27 February 2006, but
over a longer life of mine and at a lower cost per carat produced.

Koffiefontein

An independent review has recently been completed in respect of the
Koffiefontein licence area. The review has produced new analyses for priority
targets and provided a complete re-interpretation of the geophysical data for
the licence area. The Company is currently evaluating the results of the review
and an update will be provided in due course.

The exploration team is currently sourcing quotes for diamond drill rig hire in
order to begin evaluation work on the Nooitgedacht kimberlite pipe.

New developments

The Company has established a close working relationship with a South African
mining and exploration company with the objective of using the in-country
expertise and contacts of the South African company to source diamond
properties. A framework agreement is currently being negotiated which the
Company expects will increase KimCor's exposure to opportunities to acquire or
invest in high quality advanced exploration production diamond assets in
Southern Africa. It is noted that these discussions are at an early stage and
there is no obligation on either side to complete any transactions.

Martyn Churchouse, Chief Executive of KimCor, commented: "I am pleased that the
water supply issues at Bellsbank have been resolved. While production had not
stopped over the period, the mine can now start increasing throughput and the
plant can operate to design. We have taken full advantage of this period to
undertake a review of the Bellsbank resource and are putting into place several
initiatives that will reduce cost per carat and extend the life of the mine."


                                   ---ENDS---


Enquiries:

KimCor Diamonds plc                                           Tel: 020 7290 1400
Martyn Churchouse

Strand Partners Limited                                       Tel: 020 7409 3494
Warren Pearce

Bishopsgate Communications Ltd                                Tel: 020 7562 3350
Nick Rome
Fran Read






                      This information is provided by RNS
            The company news service from the London Stock Exchange

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