Name and Location
Lace diamond mine development project, Free State, South Africa.

Client
Lace Diamond Mines (LDM), a 74% subsidiary of DiamondCorp.

Project Description
The 1.2-million-tonne-a-year Lace mine is expected to produce more than 500 000 ct/y of diamonds at peak production.

The Main pipe at Lace mine contains 33.1-million tons of kimberlite, indicated and inferred to a depth of 855 m, containing an estimated 13.4-million carats in both resource categories at an average grade of 40.1 ct per hundred tonnes (cpht).

The resource has an in situ value of more than $2-billion at $160/ct.

The deposit will be mined using block-cave mining, with three caves planned over the 25-year life-of-mine (LoM) on the 47, 67 and 85 levels at depths of 470 m, 670 m and 850 m respectively.

The kimberlite is open at depth, with a significant bulge between 250 m and 360 m. The kimberlite can potentially add additional tonnage and diamonds not currently included in the resource statement.

Net Present Value/ Internal Rate of Return
Not stated.

Value
The total development cost of the project, including working capital and a 15% contingency on capital and development costs, is estimated at R384-million.

The peak funding requirement of R286-million is expected in April 2015, when blasting of the slot drive and doming will start to deliver significant tonnages of kimberlite.

The costs of establishing the block cave thereafter are offset by revenues from the sale of diamonds, recovered from kimberlite mined during development.

Duration
The Lace mine is due to start production in the second half of 2015.

Latest Developments
DiamondCorp says development of the Upper K4 (UK4) mining block at its flagship Lace diamond mine is on schedule for mining operations to start in the second half of the year – several months ahead of the original development schedule.

Underground core drilling of the UK4 block has delineated 2.6-million tons of high-grade kimberlite above the 370 m level – an increase of more than two-million tons over the original Lace geological model.

The final resource statement will require grade data from the bulk testing programme, which is currently scheduled to be completed by the end of the second quarter of this year.

The announcement follows the adoption of a revised underground development schedule and budget in 2014 that aimed to accelerate the ramp-up of commercial production from underground kimberlite mining by six months.

The main challenges to achieving this schedule and budget had been increasing input costs, the more than 25% devaluation of the rand against major currencies and a climate of industrial relations unrest in the South African mining industry strike.

Meanwhile, processing of K6 kimberlite has recovered from the production level drives and has resulted in the recovery of a 19.83 ct clear white gem diamond – the largest gem diamond thus far recovered from underground development.

The installation of the 400 t/h underground conveyor system, which will bring ore to surface for the life of the mine, is on schedule for commissioning ahead of the mining ramp-up. 

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The mine’s ramp-up is expected to start six months ahead of the original schedule.

Contact Details for Project Information
DiamondCorp, tel +44 20 3151 0970, fax +44 20 3151 0971 or email info@diamondcorp.plc.uk.