AMI.L Regulatory News (AMI)

3 Jul 2006 07:30

Sierra Leone Diamond Company Ld03 July 2006 For immediate release 3 July 2006 Sierra Leone Diamond Company ("SLDC" or "the Company") Alluvial Diamond - Production Estimates Sierra Leone Diamond Company (AIM:SLD) the diamond exploration and productionCompany, wholly focused on the country of Sierra Leone, today provides a furtherupdate to its anticipated operational costs. In light of the recent Preliminary Results and trading update, which discussedgrade, value and throughput projections at the Company's alluvial diamondoperations in Sierra Leone, the Company considers it useful to provideadditional guidance on the anticipated cash costs associated withthese operations. As detailed in the Company's Preliminary Results, SLDC conservatively estimatesthat there is approximately 100 million tonnes of alluvial gravel deposits,grading a background 0.25 carats per tonne of ore (25 carats per 100 tonnes ofore) with the approximate value of $US500 per carat. The average stone size ofrecovered diamonds from the alluvial gravel processed to date is 0.5 carat perstone with a large proportion of special diamonds (>10.8 carat). Large stones upto 18 carats have been recovered with an average independent valuation ofUS$1,000 per carat. A significant number of priceless fancies (pink diamonds) ofapproximately four carats have been recovered since SLDC started production atKonama (Kono District). Whereas large southern African operations would typically present directoperating costs between US$3 and US$5 per tonne of gravel processed, thelogistical and infrastructural difficulties in Sierra Leone, and the price offuel, lead us to estimate direct operating costs at around US$10 per tonneprocessed, with indirect operating costs adding possibly a further US$5 pertonne. As a result - and with further added for contingency - we would like to guideinvestors towards an estimate of total cash operating costs in the range ofUS$15-25 per tonne of gravel processed. However, as full scale mining operationsramp up, we will be able to provide more accurate guidance. Commenting on the 2006 budget, David Gadd-Claxton, Chief Executive of SLDC said: "The Company is looking to continue all of its exploration and developmentactivities, which will be underpinned by the cash flow generated from ouralluvial operations. "The Board of SLDC is confident that 2006 will see further focus on theidentification of new diamond fields in Sierra Leone, which is firmly supportedby the country's Government." For further information please contact: Sierra Leone Diamond Company Limited 44 (0)1442 257246David Gadd-Claxton, President and Chief Executive OfficerMartin Dunham, Chief Financial Officer Buchanan Communications 44 (0)20 7466 5000Bobby MorseBen WilleyNick Melson This information is provided by RNS The company news service from the London Stock Exchange