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 has started retrenching employees at its Lace diamond mine.

Discussions between its business rescue practitioners (BRPs) and the Association of Mineworkers and Construction Union have terminated, without a settlement being reached on a collective agreement to allow for care and maintenance at the miner’s operations to start.

As a further consequence of the start of retrenchments, the senior secured status necessary for the effectiveness of post commencement financing pursuant to an agreement with the Industrial Development Corporation is no longer available.

Following discussions with the major affected parties, LDM has appointed Lebogang Mpakati of Independent Advisory as joint BRP alongside Daniel Terblanche of Deloitte & Touche.

“Unless there is an accelerated plan and route for funding in place, which can be completed by mid-May 2017, including a significant restructuring of all debt, and successful exit from the business rescue process, then it is likely that the group would need to be placed into administration,” DiamondCorp has said.

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.