JOHANNESBURG (miningweekly.com) – Although the 2012 financial year was a “rollercoaster” year for JSE- and Aim-listed DiamondCorp, the company said it was making progress with the development of the 47-level block cave development at its Lace mine.

DiamondCorp, which reduced its net loss for the year to £3.54-million, from £4.24-million in the prior financial year, had finalised a £23-million finance package for the 47-level block cave development in April.

In the coming year, the company planned to excavate 66 500 m3 of surface material to establish a boxcut and new life-of-mine access ramp and portal into the underground workings, while drilling and blasting a 50 m vent raise to provide sufficient temporary ventilation to advance underground development to 470 m.

It would further refurbish the 1.2-million-ton-a-year Lace processing plant, including making essential modifications, to allow for the transition from tailings treatment to the treatment of underground kimberlite in 2014.

DiamondCorp CEO Paul Loudon said the company planned to recommission the Lace plant before the middle of 2013 with kimberlite tailings, after which it would test the market with the sale of recovered diamonds.

“Depending on the prices achieved, we will assess if it is worth increasing tailings production ahead of kimberlite being mined from underground in 2014,” he commented.

The main pipe at the Lace mine, in which DiamondCorp held a 74% interest, contained 33.1-million tons of kimberlite, with an indicated and inferred resource to a depth of 855 m containing about 13.4-million carats at an average grade of 40.1 carats per 100 tons.

At a carat value of $160/ct, the resource had an in-ground value in excess of $2.1-billion.

Meanwhile, Loudon said, while it was “tempting” for the company to focus solely on the development of the Lace mine, it acknowledged the vulnerabilities of being a “one mine company” and was investigating other assets.

DiamondCorp did, however, not perceive value in alluvial projects that made it difficult to budget or plan ahead, Loudon added, noting that the company would not take the risk of operating in the Democratic Republic of the Congo or Angola.

“We believe the high level of risk of grassroots exploration is not what our shareholders want and diversifying too far afield stretches the budget of a small company. DiamondCorp’s skills are in the underground mining of kimberlites to which we can add the ability to find finance in the harshest market conditions,” he said.

While the company would continue to look at new opportunities, these would exclusively be in the diamond sector and would be scrutinised under intense due diligence and risk assessment processes.

Diamond Market
The company indicated that diamond prices appeared to have stabilised in the first few months of 2013. 

“Market indicators look like we are starting to see early signs of recovery in the US, which remains the world's biggest market for diamonds,” DiamondCorp chairperson Euan Worthington said in a results statement on Monday.

He expected diamond prices to remain volatile until a sustained economic recovery was achieved.