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Lace UK4 production to reach steady state by H2 2015

Lace diamond mine

Lace diamond mine

31st July 2014

By: Leandi Kolver

Creamer Media Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – Southern African diamond development and exploration company DiamondCorp expected to achieve steady-state underground production of 30 000 t/m at the upper K4 (UK4) block of its Lace diamond mine, in the Free State, by the second half of 2015, the company revealed on Thursday.

DiamondCorp said in a statement to shareholders that, following the completion of scoping and mine design studies on the block, it had also been confirmed that the project could be commercially ramped up during the first half of next year, in line with the company’s revised underground development schedule and budget.

To achieve mine production from the UK4 block, 1 149 m of waste development and 880 m of kimberlite development are planned over the next 12 months at a budgeted R75-million, or about R37 000 a metre.

The installation of an underground conveyor belt system had also started and was on schedule to be used for the mining of the UK4 block, DiamondCorp added.

The company noted that, to date, a mining block totalling about 1.5-million tonnes of kimberlite had been outlined which could be mined by bottom-up longhole open stoping.

Ongoing microdiamond analysis also continued to confirm that the UK4 block contained high-grade kimberlite with the potential to yield up to 60 carats per hundred tonnes (cpht).

The company added that a revised budget and schedule had been adopted to fund development of the UK4 block from within existing project finance facilities. The overall mine development costs were averaging R37 051 a metre against a budget of R35 327 a metre.

DiamondCorp said the 5% overspend was largely a result of rising operating costs on the company’s underground mining fleet.

“Management considers there is scope to reverse this cost increase and has instituted operational efficiency projects in mining, maintenance and procurement to improve productivity and reduce costs.

“However, until any improvements are achieved, a new development budget of R37 000 a metre has been adopted for the UK4 development going forward, which can be accommodated from existing contingencies,” it said.

Further, the company also noted that it planned to issue an updated resource statement, which included results from a bulk test of kimberlite extracted from UK4, during the first quarter of 2015.

TAILINGS RETREATMENT
DiamondCorp stated that, during the three months ended June 30, a decision had been taken to reduce tailings retreatment processing to divert the surface earthmoving fleet to building another 15 000 m3 surface process water dam, an activity that had to be completed in the dry winter months ahead of the rain period later this year.

As a result, the plant processed 96 490 t of tailings in the period against a budget of 205 000 t. Diamond recoveries totalled 6 102 ct and recovered grades were 6.32 cpht against a budget of 5 cpht.

DiamondCorp also this month recovered a 15.2 ct clear white octahedral diamond from the dumps.

“This is the largest gem diamond recovered from the tailings and demonstrates the plant’s efficiency in recovering larger diamonds, as well as the smaller size fractions,” the company stated.

SALES
Meanwhile, the company’s diamond sales for the six months ended June 30 amounted to 14 583 ct for proceeds of $909 611, equating to an average sales price of $62/ct.

At the reduced production rate, the tailings retreatment operation was breaking even and the plant was now operating in the optimal configuration for processing kimberlite from development as this ramped up over the next six months, the company said.  

“Demand for good-quality rough diamonds remains relatively strong and prices are 5% to 10% [higher than those] achieved in December 2013. DiamondCorp is forecasting the market to be steady to modestly higher for the balance of 2014, with potential for price strengthening in 2015 as world economies continue to recover,” DiamondCorp said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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