Name of the Project
Lace diamond mine development project.

Location
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 deposit will be mined using block-cave mining, with three caves planned over the 25-year life-of-mine 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 of between 250 m and 360 m. The kimberlite can potentially add additional tonnage and diamonds not currently included in the resource statement.

The Upper K4 (UK4) block is being mined using long-hole open stoping while development of the first block cave on the 50 m level continues.

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 production ramp-up from the Upper K4 (UK4) block started in December 2015.

Latest Developments
DiamondCorp is being given a repayment breather by South Africa’s State-owned Industrial Development Corporation (IDC).

The IDC has agreed to a loan repayment standstill until the completion of the business rescue process.

Heavy rains flooded the Lace diamond mine in November, causing production disruption. It was placed in business rescue last month.

Discussions are now also under way with other lenders to achieve formal agreements for similar repayment standstills.

DiamondCorp lender Laurelton Diamonds has agreed to roll up its interest until November 1, next year, or the completion of refinancing, whichever is earlier.

Capital repayment has also been deferred to March 1, 2018, with interest accruing at an agreed rate of 9% a year plus a 2% premium in the interim.

DiamondCorp has repaid £290 000 of a £700 000 Shariah-compliant loan from Rasmala, which has agreed to extend the repayment of the balance to March 30 next year.

“The standstill agreements on the project loans for the Lace mine should give the company some much-needed breathing space,” SP Angel mining analysts said in a note.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project is on time.

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