RNS Number:1684Y
KimCor Diamonds plc
12 June 2007

                                                                    12 June 2007

                              KimCor Diamonds plc
                          ("KimCor" or the "Company")

                                BELLSBANK UPDATE

       New mining strategy driving diamond production and reducing costs

The Board of KimCor, the diamond producing and exploration company with
properties in South Africa, is pleased to announce that the new mining strategy
at the Company's Bellsbank dump mining operation ("Bellsbank"), announced on 23
April 2007, has been successfully implemented.

A range of measures has been introduced by mine management as part of the new
strategy, including:

   *Successful completion of a new water supply system that has the capacity
    to not only service existing requirements but also cope with the planned
    doubling of production - from 720,000 tonnes per annum ("tpa") to 1.46
    million tpa;
   *Successful installation of a new waste tailing conveyor system;
   *Favourably renegotiated terms with the existing mining contractor; and
   *Completion of an agreement with the South African Department of Minerals
    & Energy for the handling of waste tailing material.

As a result of the new strategy at Bellsbank, the Company has achieved the
following efficiency improvements:

   * Diamond production has risen significantly with the increased
    availability of water. During the months of February and March 2007 whilst
    the plant was only able to operate at a low capacity, diamond production was
    579.13 carats and 666.71 respectively. During the latter part of April -
    when water became available diamond production rose to 1,035.28 carats, and
    during May - when the plant was able to operate uninterrupted, production
    rose to 1,554.68 carats;
   * Mining and haulage costs have been reduced by US$0.16 per tonne mined
    and delivered;
   * Waste disposal costs have been reduced by US$0.67 per tonne delivered to
    less than US$0.05 per tonne;
   * Since the completion of the new pipeline there has been no downtime or
    lost production due to shortages of water;
   * Management has been able to increase production rates to around 1,600
    tonnes per day ("tpd"). Additional production rate increases are expected to
    be achievable, as described in further detail below;
   * The significant reduction in costs has permitted the profitable mining
    and processing of lower grade feed which previously would have been
    considered waste. The mine now has the ability to blend high and low-grade
    feed stocks to achieve target grades consistent with the new mining strategy
    that will extend the life of the operation and the recovery of diamond
    production from previously uneconomic tailing material; and
   * The Board of the Company believes that as a result of the revised
    strategy Bellsbank is now one of the lowest cost producers of its type in
    South Africa, and the application of the same strategy offers scope to
    profitably mine other tailing resources identified by the Company for future
    acquisition.

The ability to raise production levels towards plant capacity due to the
availability of a regular water supply will enable the Company to provide
meaningful updates on diamond production and sales based on the tender of larger
parcels of rough diamonds. A run of three months from June to August 2007, with
two sales during this period, will provide an opportunity for the Company to
test the market for Bellsbank production. Discussions have been held with Anmic
to optimise the sorting of parcels such that they command the best possible
price and meet the particular specification of individual buyers.


Additional processing capacity

Further to the new mining strategy, the Company plans to increase the Bellsbank
plant processing capacity in a two-stage process resulting in a monthly
production rate of 120,000 tonnes or 1.4m tonnes per annum. The plant
modification and increase in capacity is currently scheduled for commissioning
within 20 weeks.

This will be achieved by the addition of firstly, a DMS unit incorporated
into the existing Bellsbank plant circuit that will increase existing pan
capacity and secondly, the installation of a mobile pre-concentration unit.
Whilst the pre-concentration plant will operate independently of the existing
Bellsbank pan plant, the concentrate produced will be fed through the Bellsbank
Plant for final diamond recovery.

The effect of the installation of the DMS unit is expected to immediately
increase the existing plant capacity by 30 per cent from 17 tonnes per hour per
pan ("tph") to 22tph. With six pans operating in the circuit this will result in
an average monthly production rate of 75,000 tonnes per month. The
pre-concentration unit will process an additional 46,000 tonnes of tailing
material per month and produce a high-grade pre-concentrate of 2,300 tonnes per
month.

The two units combined will double annual production at Bellsbank, from 720,000
tonnes per annum ("tpa") to 1.46 million tpa.

Based on the current grades being achieved under the new mining strategy, the
combined processing route has the scope to generate up to 58,000 carats per
annum of diamond production.

The Bellsbank operation is currently producing at a unit cash cost of around
$1.80 per tonne mined and processed, using the conventional mining and
processing methodologies bolstered by a competitive mining contract rate and low
waste disposal costs due to the introduction of waste tailing conveyors that
preclude the need for haul trucks. The pre-concentration process has been
estimated to cost US$1.0 per tonne mined and processed. The Board therefore
expects that Bellsbank will remain highly competitive, producing at a unit cash
cost well below the industry average.

Martyn Churchouse, Chief Executive of KimCor, commented: "We are delighted with
the continued progress at Bellsbank. Not only have we solved the water supply
problem but have also created a more efficient lower cost operation as a result.
We look forward to further updating the market in due course both with progress
on the expansion of the operation and production results."

Enquiries:

KimCor Diamonds plc                                           Tel: 020 7290 1400
Martyn Churchouse

Strand Partners Limited                                       Tel: 020 7409 3494
Simon Raggett
Warren Pearce
Victoria Milne-Taylor

Bishopsgate Communications Ltd                                Tel: 020 7562 3350
Maxine Barnes
Nick Rome




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

END
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