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Apology for not responding to posts due to a busy schedule and travelling again this afternoon. Diamante, thanks for your reply & demonstrative post re Petra's ability to structure accordingly if they are interested and they certainly have been a wolf expanding the range as far as acquisitions is concerned the past few years. I asked the question: Has enough been done to demonstrate Lace's value at this stage? Well I think that a lot has been demonstrated at this stage. The Resource Statement & Tech Report are the go-to references for any interested party. Apart from the resource estimate total 38.7m tons @24.4cts/100tons = 9.4M carats, there is quite a bit more demonstrated to date than is fully appreciated. The pipe doesn't taper much at depth as with many kimberlites & the drilled level 920m is thus located within the diatreme, indicating that the "basement complex" or dramatically narrowing "root zone" is yet to be found, leaving the resource open at depth. CK or K4 high grade kimberlite (average 40cts/100tons) makes up 37% of the pipe at current mine plan levels to 370m and increases volumetrically to +-50% below 370m to 510m, further increasing to +-60% from 510m to 700m and makes up more than 70% from 720m down to current drilled 920m. i.e.K4 kimberlite comprises total 60% of the Lace resource by tonnage and 87% of the resource by diamond content has an estimated average recoverable grade of 40 carats per hundred tonnes (cpht) at 1.25 mm bottom screen size. I think it's fair to say that the 1st x 2 sales this year indicated how conservative the base case -10% discounted "flat real" $164/ct average estimate is. When considering that the bulk of those volumes comprised more highly diluted K6 development ore as opposed to K4, it suggests that K4 holds more upside which due low volumes to date has not been demonstrated? Fortunately, higher average Size Frequency Distribution has been established (hence adopting larger 1.25mm screens) but with high volumes K4 still eluding Lace, probable upside in SFD can only be speculatively inferred. Continued....

Similar averages Banksman. ATB

Einvestein, thanks for the reply. Apology that some links failed to activate so please copy & paste them in your browser as you read with emphasis on - http://www.globalminingobserver.com/king-of-diamonds-125 It would be interesting to know what those "initial expressions of interest" amounted to & from whom but we'll likely never know? The update read plural, thus more than one so there is the possibility that a bidding situation arises especially if the "offer period" strategy sparks additional interest. In terms of a merger, I agree that should a larger entity with multiple operations such as Petra (different class) decide that their cash flow is tight and propose a merger, then we'd likely get 1:10's of DCP shares. Of course it just depends on how much more growth they envisage & if they really want the asset rather than let a competitor get hold of it? In terms of Lucapa, a merger gaining access to a 2nd long life asset requiring low capex to bring additional revenue complimenting the lucrative alluvial operation may be viewed differently. Refer to pg. 22 http://www.lucapa.com.au/sites/lucapa.com.au/files/Lucapa%20London%20Presentation%20-%20June%202016%20V4.pdf Note: Lucapa have certainly produced exceptional stones from the "Lulo" alluvial site but when one looks at the resource statements low reserve base & very low grade, it does not amount to a huge resource at this stage and should the stone size or grade falter for a period, it makes them vulnerable. The current inferred in-ground value at "Lulo" amounts to $41.3M? As mentioned they are an Aussie company which was PL's training ground so perhaps contact links & they are seeking an Aim listing as per the presentation incl. global diamond opportunities being assessed to position for growth. In this particular case a merger could be very interesting an significant to both parties. Nowhere near 1:10's if you look at Lace in-ground value & current transition stage could bring to the party?

4. Continued... Beyond the current ramp up issues curtailing monthly tonnage in the short term, Lace’s higher grades, special colour stones, +80% gem quality and long mine life +25 years could offer both low grade, large single stone & alluvial operators a better monthly product mix & steadier quarterly income stream while adding substantial value to a single mine operator. A merger may well be in discussion being less capital intensive and thus leaving a potential merger partner with available capital to push Lace beyond navigable short term ramp up issues. Perhaps the “initial expressions of interest” spurred the BoD’s to accept the costly short term Rasmala fix giving them time to implement a formal “offer period” in which they hope to solicit/attract multiple interest from prospective acquirers or suitors? Questions remain; Has enough been done to demonstrate Lace's value at this stage? There is much at stake for shareholders & I would appreciate your views & ideas while we await an outcome. ATB

3. Continued.... c) Gem Diamonds. A London listed miner with 2 x operational pipes and a robust cash position. The Botswana Ghaghoo mine – “At Ghaghoo we continue to make good progress to downsize the operation and reduce costs in line with the Group's strategic objectives. The on-going weak market for Ghaghoo type diamonds has resulted in a non-cash impairment of US$40.0 million being made against the carrying value of this asset”. Half year report 2016 refers. Lesotho Letseng mine - A great asset that produces large high value single stones averaging a mere 1.7cts/100 tons yet boasts as one of the highest average $/ct earners. Half year report 2016 refers – “The first half of 2016 saw a decline in the number of +100 carat diamonds recovered at Letšeng compared to 2015, reflecting the areas in which mining had taken place, which impacted the US$ per carat achieved in the Period”. The mine is located in a remote mountainous region 10,000ft above sea level and July 2016 saw the most severe weather & snow falls in a decade. D) Petra Diamonds Ltd. - A London listed multi-mine & tailings operator that rapidly expanded by acquiring ageing DeBeers assets and has positioned the company in a class of its own though the rapid expansion drive & 2015 declining prices required some debt restructuring. The company projects becoming initially free cash flow positive FY 2017. Lace would not be out of place in Petra’s stable but for the reasons above, it seems timing would be off in respect of capex, current debt & cash flow? The Lace model is least sensitive to mining cost & production cost and more sensitive to grade, Forex & carat value and has a broader marketable product with a robust estimated IRR 59% margin for the UK4 – mine plan and higher for the block cave mine which few mines boast. The mine is located in relatively low rainfall area with generally good weather, easily accessible all year round & close to spares & mine support hubs i.e. Welkom and Johannesburg. Continued...

2. Continued.. Diamond mines are modelled on 5 particular sensitivities i.e. Grade/carat value/forex rates/mining costs/production costs. Considering the names listed, some more than others have specific strengths & vulnerabilities and I suppose one could find synergies anywhere if you really look hard but there are a few that stand out and some with growth aspirations. In particular, single asset kimberlite pipe, low grade, large stone producers as well as alluvial producers are susceptible to all 5 sensitivities and dependant on large single stone (high value) finds each quarter to avoid big revenue fluctuations. Exceptionally large stones also have a very small exclusive market and can be difficult to sell as seen recently. https://www.yahoo.com/news/worlds-largest-uncut-diamond-fails-sell-london-191942091.html Other factors such as difficult isolated geographic locations, inaccessibility during adverse weather and proximity to spares & mine support etc. Refer to the following operators - http://www.globalminingobserver.com/king-of-diamonds-125 Considering the small group listed above, each operator has specific strengths & vulnerabilities and I suppose one could find synergies anywhere if you really look hard but there are some that stand out and it may be useful to take a closer look: - A) Lucapa Diamond Co. is an Australian Listed miner with alluvial operations in Angola hoping to discover the source (kimberlite pipe) of its alluvial diamonds. The alluvial operation comprises varying low grades that is very dependent on single high value large stone finds e.g. Q3 2015: 7.9cts/100cu metres to Q3 2016: 13.7cts/100cu metres. Pg. 2 refers - http://www.asx.com.au/asxpdf/20161012/pdf/43bxdh6fdp5ryf.pdf Interestingly, a London Aim listing is under consideration - https://www.gemkonnect.com/news/diamond-miner-lucapa-mulls-london-listing PL mentioned talks with parties “outside of the UK & SA” and it may be worth noting that he is Australian, started in the mining industry there & may well know some of Lucapa’s BoD’s? B) Lucara Diamond Corp. Is a Canadian listed operator with additional listings in Stockholm & Botswana, operating the Karowe mine in Botswana since 2012 having recently become infamous for some of the largest single stone finds has an indicated total average grade 16ct/100 tons. Low grade, large high value single stone kimberlite operation & publicly on the prowl as mentioned in the Global Mining Observer article so not much needed to feed the imagination. The “Lesedi La Rona” diamond remains unsold. Continued...

It may be helpful to discuss the current “offer Period” in effect since the costly immediate short term facility is secured. PL advised 12 Oct – “Management is also engaged in discussions with parties outside of the UK and South Africa with a view to significantly strengthening the group balance sheet and bringing on board additional diamond mining development and corporate finance expertise in key executive roles”. 14 Oct - "Following that announcement, and in response to initial expressions of interest from potential acquirers who are credible participants in the Company's sector, the Board is of the view that the Company should, in parallel to its discussions to secure additional funding, conduct a wider strategic review to explore additional opportunities including a corporate transaction such as a merger with or offer for the Group by a third party or a sale of the Group's businesses. The Board therefore intends to pursue any such possible alternatives to ensure the best outcome for its shareholders".- The BoD's now have breathing space during the "offer period" and the 2nd tranche is available if required. In the interim there is a long shot that one of the other large II's intervenes with better terms. Production 14-15Ktons/pm has recommenced and was still ahead of monthly tonnage after 4day stoppage. Comprising the high grade Trough area so if... and I say if production is stable over next 8 weeks, it could net +-7500cts to 11Kcts subject to grade & dilution of course? Mining Mx - http://www.miningmx.com/top-story/28267-diamondcorp-secures-short-term-future-hefty-price/ “The appointment is an interim measure but Ellis has been tasked with the sale or merger of the company, along with CEO, Paul Loudon, who expressed relief at raising short-term funds to pay creditors”. “We are pleased to have secured this new financing facility, which will enable us to sustain our operations at the Lace diamond mine whilst we conduct our formal sale process and evaluate all options available to us,” he said. “Loudon told Miningmx on October 12 that it had held discussions on a potentially transformative deal which would see it import fresh executive mining and finance skills whilst significantly refinancing the balance sheet” In lieu of an outright acquisition, a less capital intensive merger could also be strong focal point at present? Growth & value along with synergies would have to make sense to a potential merger party & the Lace resource economics though very good, is still hampered by short term navigable issues constraining full production. Continued...

Hi Mac. Trust you're well? I'd like to know what's on your mind? ATB

Jaf/Daison, Re Rasmala - It's likely a point that will be discussed/clarified at the GM but they may be locked in from selling during the 8 week period to avoid controlling the share price? They will have 2 insiders on the BoD's. We don't have a venue yet but likely London on or before 31 Oct. Is anyone flexible enough to attend?

Hi Jaf, The 1st tranche is slated for immediate drawdown costing GBP25K fees + GBP10K (15% interest 8weeks) and if converted roughly 5.5% dilution. It's expensive but not catastrophic. There also does not seem to be a cancellation fee/penalty for not taking that 2nd tranche as the fee is structured pro-rata? Recalling the Acrux deal, DCP opted out due to the long term erosional effect having found other options. Perhaps a long shot but I suppose the possibility of an alternative could surface, perhaps even from one of the other existing large institutional shareholders in respect of the 2nd tranche if required? For now at least the BoD's have backed away from the wall and have a little more freedom to negotiate a sale or merger.

Webmoor, Diason answered most of the questions so I'll expand on your 1st question; 1; Why not sell diamonds? - During transition to producer it is important to prove/verify the deduced economics of the project. The base case flat real estimate of $164/ct vs estimated production cost intimates a 50% margin but must be weighed against actual cost and actual sales revenue to determine the actual margin. It is considered that small diamond tranches (less than 7K carats) don't attract sufficient buyers to get competitive bidding tension at tenders. Thus best market price need to be achieved to effectively assess projected estimates in order to define if things are healthy or if problems exist. Each defined block is 20mx20mx20m and diamonds are not distrusted homogenously within blocks & varying facies (K2, K4, K6 & K8). Targeted high grade K4 requires on-going assessment for each block being mined. - i.e. Was the block grade lower?/what % waste ore dilution existed in mined block?/is there a processing plant problem? etc. etc. Accordingly, appropriate action can be taken to rectify where applicable. It's part of an on-going intricate assessment & controllability function! Every run of mine that is processed requires ore from varying facies to be sequestered/isolated so that each can be verified separately for dilution/grade/quality/Size Frequency Distribution (SFD) and even peculiarities such as dominant colour of stones in a particular block and facie. This can only be done after stones have been cleaned, sorted, graded, weighed, assessed & valued. Similarly, final tailings piles (fines) from each run of mine is tagged separately & checked by the Geo to ensure the process is efficient. The plant is purged/cleaned before running ore from different facies or even running "old" tailings and nothing is ever mixed to avoid false analytical data. Similarly, final tailings piles (fines) from each run of mine is tagged separately & checked by the Geo to ensure the process is efficient. Overall, it forms a very comprehensive & methodical process which after completion requires the state diamond 'valuer' to do his evaluation on a batch which should be reasonably close to company valuation. Thereafter the batch must 1st be made available to local buyers for a 4 day period (local beneficiation laws), prior to export to Antwerp. If local buyers prices exceed the company reserve valuation, then that particular batch is sold locally. The entire process can take between 40-50 days from run of mine to cash in hand at tender in Antwerp if exported due to S.A. export & Antwerp import regulations. Hope it helps answer your question!

Apology for not replying to your comment yesterday but only arrived home in the early hours after an urgent call.

Adding to my previous, todays rule 2.9 announcement could have some interesting effects? UK & SA senior convertible bond holders don't qualify to share in possible sales proceeds unless prior conversion to ordinary shares is requested (at company discretion) at a hefty 5.59p and ZAR0.81 respectively. Failing that only the capital amount + quarterly interest is payable on early redemption in the event of a sale. If CB holders request conversion it could bring in substantial cash to the company but the question is, will they want to risk a relatively safe haven bond investment for a share of any proceeds should a sale materialise? Bond holders are now faced with the decision: convert at risk to share in proceeds (if a sale succeeds) or be satisfied with the lucrative earnings achieved to date and accept early redemption. Note - 276,839,478 deferred ordinary shares of 2.9 pence each. The deferred ordinary shares do not entitle the holders to (a) receive notice of or attend and vote at any general meeting of the Company; (b) to receive any dividend or other distribution; or (c) to participate in any return on capital on winding up, other than the nominal amount paid on such shares following a substantial distribution of ordinary shares in the Company. The deferred ordinary shares effectively have a zero value, are non-transferable and have no effect on the economic interest of the holders of ordinary shares. Folks, let's stay focussed on the current so please share your thoughts. There is a lot more at stake than the minute by minute share price movement.

TonyB, seems you could be right. The short term funding facility "if" converted would amount to roughly 10% dilution. The cost of GBP50K in fees is steep! Seems that Rasmala have used their muscle to gain a bigger slice very quickly which could indicate that a sale/merger may be in final throws? If that be the case then however expensive the facility amounts to in the short term, it does place the company in a vastly improved position to consider competitive offers during the remainder of the 28 day and for 8 weeks ahead rather than having their back totally against a wall during negotiations and it seems the BoD's accepted the expensive short term facility based on a short term view to a sale/merger currently under negotiation rather than with a long term view? Having said that, if the short term sale/merger does not materialise, it would cost shareholders a lot more in dilution to fund the long term requirements to full production.

DiamondCorp reported via SENS on Thursday that it has secured £700 000 pounds by way of a shariah-compliant secured convertible financing facility from Rasmala plc, an existing shareholder. Chairman Euan Worthington has resigned his position with immediate effect. The money will be drawdown in two tranches. The first, for an amount of £400 000, will be available immediately with the remainder accessed in the near term. The facility will mature on the 15th of December 2016, upon which, at Rasmala’s discretion, they can be paid via shares or cash. If via shares, the shares will be issued at a discount of 30% to the average daily volume weighted average price between the time of the agreement and the time of the conversion. 5 000 carats of inventory will be used to secure the facility. DiamondCorp will pay a mark-up equivalent to 15% per annum if Rasmala elect to receive cash. Rasmala will also have the ability to appoint one individual to the board. While the funding addresses the immediate concerns of the company, DiamondCorp believes it still needs £2.5 – 3 million pounds to get it to commercial production. For this reason, it continues to explore all options, including a possible sale. Full article - http://www.mineweb.com/news/diamonds-and-gems/diamondcorp-lives-to-fight-another-day/

Webmoor, the odds of a 200ct stone find are slim to none as the pre-1930's mine history confirms the largest stone recovered 122cts from the open pit & tailings have recovered the odd 22ct - 30ct stone since DCP started reprocessing the dumps during development so you can infer that average carat size at Lace is smaller though it has consistently delivered in excess 80% gem quality stones to date. That is not to say larger stones don't exist in the pipe as the high grade UK4 targeted core zone has just restarted albeit at half production rate until end Dec. What is quite unique at Lace is history of coloured stones (pinks, purples) as well as the odd very scarce blue diamond and type-IIA's which are the highest quality clear diamonds achieving premium $/ct prices. http://gemresearch.ch/wp/wp-content/uploads/2015/04/PINK-DIAMONDS-for-ICA-32-41-pink-Gemologypdf-2.pdf E.g. April update - "Two special stones were included in the sales. A 22.11 carat diamond reported previously which was sold into the Company's beneficiation joint venture as an H coloured stone at $5,000 per carat and a 1.08 carat Type II purple stone which sold at tender for $6,363 per carat". The two polished stones have been sold for a total of US$261,361". A large number of recovered stones are clean "cleavable octahedrons" just as the above 22ct H-coloured stone which can be split into 2 stones generally achieving the highest comparable final cut & polished carat weight compared to irregular shaped stones. Thus Lace stones comprise of high grade, High +80% gem quality, smaller average carat stone sizes. Lace's sister mine "Voorspoed" 9km down the road & operated by DeBeers and described in ore geology reviews - "Diamonds - Wagner (1914) described the diamonds from Voorspoed and noted the presence of cubic diamonds in which the cube faces were covered by roughened surfaces and corrosion markings. He stated that Voorspoed diamonds were renowned by cutters as being the hardest of all diamonds, and difficult to cut. He described the diamonds from the mine as being largely dull and lustreless, of poor quality, and that there were a large proportion of small stones. Most of the diamonds were coloured with white being rare. Among the fancies there were fine rose pinks. Dodecahedra, mostly distorted, dominated production, whilst octahedra were rare". Oops, I've just received an urgent call & will continue later if possible.......

Einvestein, I forwarded the misinterpreted article to PL for market info correction if required along with a reiterated short message of support. Received the following short & courteous reply - "Thanks, I'll let him know & sincerely appreciated". Can't expect much more under the code rules but at least we know he's still on the job!

Please accept my humble apology for incorrect reference 07:53 post by Advance123. As regards your 6p assumption, the post stands.

The calculation was set out for you to check based on your 6p assumption, surely you can check the maths based on your 6p bid? 6p has not been bid as you posted again this morning in fact there is no bid for the sake of correctness and shouting a random number that enters your head as an existing bid in your post 07:53 ("Great news for share holders.6p bid") It's tantamount to presenting false info and is as amateurish as the misinterpreted article posted this morning! In case you didn't comprehend my last - I certainly would not be doing business with you any time soon and fortunately neither will the company!

Agree Einvestein. a misinterpretation and grave error in times such as these.