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 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.

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

Latest Developments
DiamondCorp has reiterated that the Lace diamond mine remains on schedule to reach full production of 30 000 t/m in July, as production ramp-up from the Upper K4 (UK4) block continues.

The company has, to date, recovered 7 449 ct of diamonds from bulk testing at the 74%-owned mine.

The company reports that the diamonds recovered from initial processing are meeting expectations in terms of colour and quality, including three diamonds larger than 10 ct, the largest of which was a 22.11 ct H-coloured stone.

This diamond was sold into the company’s South African beneficiation joint venture for $5 000/ct to recover an 8 ct emerald cut stone after cutting and polishing.

The company will receive a 50% share of the cutting and polishing profit in addition to the price of the rough diamond.

DiamondCorp is, meanwhile, preparing to export 3 577 ct of diamonds, recovered from development and bulk testing activities in the second half of 2015, to Antwerp, Belgium, where they will be sorted for diamond tenders in the coming months.

The company has further noted that, during tailings retreatment, management determined that considerable operational efficiencies and water savings could be achieved in the Lace processing plant by increasing the bottom screen size from 1 mm to 1.25 mm.

This change has been applied to kimberlite processing, which will result in a lower recovered grade, but a higher average carat value for the diamonds recovered, as the smallest diamonds are the lowest-value stones.

A final decision on the bottom screen size will be made following receipt of the microdiamond analysis being undertaken as part of the resource statement update and the conclusion of the first few diamond sales, which will provide pricing data for the different diamond size categories.

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