Latest Share Chat

REMOVE ADS

DCP.L Regulatory News (DCP)

DCP.L Information

There is currently no data for DCP

REMOVE ADS

Final Results

4 May 2016 07:00

RNS Number : 1079X

Diamondcorp Plc

04 May 2016

DiamondCorp plc

AIM share code: DCP & JSE share code: DMC

ISIN: GB00B183ZC46

(Incorporated in England and Wales)

(Registration number 05400982)

(SA company registration number 2007/031444/10)

("DiamondCorp", "the Group" or "the Company")

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

Highlights

· As underground development continued at the 74% owned Lace Mine in South Africa, DiamondCorp`s net loss for 2015 was £2.41 million (2014: loss of £3.25m).

· At 31st December 2015, total assets had risen to £34.99m (2014: £32.41m) and cash on hand stood at £1.78m (2014: £2.60m) while a further £2.06m gross was received from the second tranche of a placing in January 2016.

· During 2015, our consultants worked on a new Technical Report and Resources Statement for the Lace Mine using actual mine data, drilling and sampling results. The total Resource in the main Lace pipe is now estimated at 38.69 million tonnes to the 920m level and is open at depth.

· Studies on diamond distribution together with financial modelling have shown that the optimum lower screen size for the processing plant is 1.25mm and at this cut-off, the Resource is estimated to contain 9.39 million carats of diamonds.

· Within the Resource, 2.21 million tonnes of kimberlite in the UK4 Block has been classified as a Mineral Reserve between the 230-370m levels. This is currently being mined while development continues to establish the first block cave on the 500m level.

· In November 2015, the 400 tonne per hour underground conveyor belt system from the first production level at Lace was commissioned. This belt is capable of delivering ore at double the current front end capacity of the 1.2 million tonne per year processing plant.

· There were no delays for industrial action at Lace during 2015 and last February, Lace Diamond Mines signed a four year wage agreement with the Association of Mineworkers and Construction Union (AMCU) based around 8% annual increases in basic salary for most categories of workers.

· In early April 2016, the Company closed the sale of a total of 8,648 carats of diamonds (6,247cts from underground) marking the first sale of diamonds from the Lace kimberlite since 1931. The average price received for these kimberlite diamonds was US$175/ct which compared to the estimate of $164/ct used in the new Resource Statement.

· Our joint venture cutting operation in Johannesburg continues to illustrate the quality of Lace stones and the ability to add value to specials while the recent tender included the first purple diamond that sold for $6,363/ct.

· Demand and prices for diamonds fell in 2015 in line with a strong US$ and falls in other commodity prices while the industry was impacted by financing issues and destocking through the pipeline. In recent months, demand and prices for rough and polished stones have been improving with signs that the cycle has bottomed. We expect a further recovery in prices later in the year.

A full version of the 2015 report and audited financial statements will shortly be posted to shareholders and are available on the Company Website www.diamondcorp.plc.uk

Contact details:

DiamondCorp plc

Paul Loudon, Chief Executive

Tel: +27 56 216 1300

Euan Worthington, Chairman

Tel: +44 7753 862 097

UK Broker & Nomad

Panmure Gordon (UK) Limited

Atholl Tweedie/Adam James

Tel: +44 20 7886 2500

JSE Designated Advisor

Sasfin Capital (a division of Sasfin Bank Limited)Megan Young

Tel: +27 11 445 8068

SA Corporate Advisor

Qinisele Resources Proprietary Limited

Dennis Tucker / Andrew Brady

Tel: +27 11 883 6358

Letter from the Chairman

Dear Shareholder

As I reported in my letter last year, it was hoped that 2015 would be the year that the Lace Mine (74%) resumed commercial

production for the first time since 1931. Unfortunately, underground mining operations met a few unforeseen bumps in the road

and it is only now, a year later, that we have completed our first diamond tender and are finalising mine development prior to

full commercial production of 30,000 tonnes per month of kimberlite from July 2016.

A major advance during 2015 was the final installation and commissioning of the underground conveyor at Lace which is now

bringing kimberlite and development waste to the surface without the need for excessively long haul distances for the

Company's heavy dump trucks. Another positive event was the completion of dams and water recovery systems on site, which

has alleviated concerns about water availability for processing the kimberlite ore. This is important after low annual rainfall in

recent years.

After a successful resolution to the strike by our workers who are members of the Association of Mineworkers and Construction

Union (AMCU) at the end of 2014, we began wage negotiations early in 2015. In February last year, a new four-year wage

agreement was signed based around 8% annual increases in the basic salary for most worker categories, along with a

progressive lift in pay for the lowest paid workers. This was a good result as two or three year agreements are more common in

the South African mining industry. Since that deal was signed, labour relations at the mine have been very positive with no

further stoppages for industrial action.

Financing

In March 2015, we announced that Lace Diamond Mines (Pty) Ltd, our 74% owned subsidiary and operator of the Lace Mine

had signed a term sheet with South African group Acrux Resources to sell a 3% net revenue royalty for US$7 million (£4.5

million). This would have provided funding at the operating level without the capital dilution for DiamondCorp plc shareholders

of an equity issue. We were unable to agree final terms and conditions for this royalty and after consultations with our major

shareholders, we gained strong support to proceed with a Placing and subscription of new shares, which raised £3.18 million

before expenses. The Board had also received encouragement from a number of private individuals and felt it important to

allow all shareholders to participate in this financing. Through an Open Offer at the same price as the Placing we raised a

further £2.09 million gross with excess demand for over-allotments.

We believed that this financing, completed last July, would cover the final capital development costs for underground

development to reach our target of the first diamond sale in Q3 2015. Unfortunately, mining through the K6 kimberlite on the

290m level then encountered unexpectedly very poor ground. This required additional rock support to ensure the safety of our

workers and equipment. Also, around the same time the Department of Mineral Resources informed us that anti-roll back idlers

had to be installed on the conveyor belt pursuant to new governement regulations. As well as slowing progress at this critical

time, these events added to costs.

We pursued other financing mechanisms to cover the revised budget but nothing could be concluded quickly, so in mid-

November your Board regrettably opted to seek funding from a further share placing. In an environment of weak diamond

prices and a depressed mining sector it was disappointing that we had to price this issue at 6 pence per share to raise £4.0

million, when six months earlier there was strong demand at 10 pence per share.

In addition to raising this new working capital, we requested the Investment Development Corporation (IDC) of South Africa to

reschedule interest and capital repayments on its ZAR 220 million loan to Lace Diamond Mines (Pty) Ltd. The first payment

was due in January 2016 but has now been deferred to 1st February 2017 by which time, the loan and rolled up interest will

total some ZAR 311 million (£15 million). DiamondCorp plc Shareholders will gain some comfort from the fall in the South

African Rand which now exchanges at ZAR/£20.70 compared to ZAR/£13.33 when we signed the IDC loan agreement in

September 2012.

The Company investigates all financing options as they arise and is highly conscious of trying to limit shareholder dilution in

any fund raising. As we ramp up to full production, management is focused on keeping all costs minimised and the budget

within existing cash resources, whilst cognisant of remaining both on schedule and operating within very high safety levels.

Health and Safety

All through our operations from surface to underground, the safety of our employees is of paramount importance. We strive for

100% accident free working but in an underground mining operation that is difficult to achieve. Luckily, the rock falls which we

experienced at Lace last year did not seriously injure any employees, although it did result in a number of lost time injuries and

was a stark reminder of the unknown conditions we can sometimes face in mining a kimberlite. Our compliance with a strict

safety code may delay operations and cause frustration to investors, but a serious accident could lead to closure of the mine

for weeks or months.

Letter from the Chairman (continued)

Corporate Governance

The Board considers that the best business practice is very important and adopts the Corporate Code of the Quoted

Companies Alliance. This reflects many of the rules in UK Corporate Governance Code (formerly known as the Combined

Code) but is more appropriate for a company of the size and in the stage of growth of DiamondCorp plc. As the Company has

been developing in recent years, we have considered that the Board has the necessary diversity of skills. In February this year,

Mr. R N Allen who had served as an independent non-executive director since March 2005 decided to retire. We must offer him

our sincere gratitude for sharing with your Company his great knowledge and valuable connections in the downstream diamond

market. In his place, we have recruited Chris Ellis who has some similar skills to Nick and adds a layer of knowledge in the

financial aspects of the diamond supply chain. We are pleased to welcome him to the Board and as required by our Articles of

Association, he will be standing for election at the forthcoming Annual General Meeting.

Diamond Market

The market for rough diamonds (the product we sell) has been somewhat resiliant but not immune to the fall seen in other

commodities. Prices, which had started to weaken in the last quarter of 2014, continued to decline during 2015 and on average

ended some 15% lower. Until mid-year, it appeared that the prices were relatively stable but then buying dried up and in

November, the Diamond Trading Company 'sight' at only US$70 million was the lowest anyone can remember. Everyone

breathed a sigh of relief when the last 'sight' of the year bounced back to over $250 million while the first three sights of 2016 at

$540 million, $617 million and $660 million reflect strengthening demand and stabilisation in the diamond pipeline.

Aside from generally weak commodity prices, the fall in rough prices was not unexpected as for a few years now the trend of

rough prices has been out of kilter with prices for polished stones. The downward correction was finally brought on by a number

of factors including weaker jewellery demand, the withdrawal of lending to the cutting and polishing industry by a couple of

major sector banks and the failure of producers to react to slowing demand. Last year saw tumbling prices for many minerals

including oil which was down 33% (Brent spot), copper - 22% (LME 3 months), iron ore -37% (62% Fe fines), nickel - 42%

(LME 3 months) and platinum - 27%. Polished diamond prices behaved more in line with the gold price (down 11%) as the

Rapport Diamond Index fell 9% and the IDEX Diamond Index was unchanged.

Some producer cutbacks were noted in 2015 but overall, it is estimated that global output of around 130 million carats (gem

quality diamonds) was little changed from the year before. We believe that major producers including De Beers and Alrosa

were forced to build stockpiles as demand for rough fell. Reviewing current mines and mines under development, it is quite

likely that the peak of global gem diamond production of over 170 million carats reached in 2005 will never be reached again.

However, in the absence of producer cutbacks, output is expected to increase in the next few years with new mines including

Grib, Gahcho Kue, Liqhobong, Renard, Korpinsky and Lace coming on stream, together with higher production from the Petra

Diamonds mines in South Africa and Debswana's Jwaneng mine in Botswana. Set against this will be declining output from

such mines as Ekati and Diavik in Canada, Argyle in Australia and the Marange fields in Zimbabwe. Of known projects, it is

estimated that world production may reach 150 million carats per year around 2021 before a steady and dramatic fall to some

100 million carats by 2030. In a recent Bain & Company report, the authors say that the gap between supply and demand of

rough diamonds is expected to widen from 2019 onwards.

The rough diamonds that we and other miners produce are the feed for cutters and polishers to turn into gems for the jewellery

manufacturers. India is now the world's predominant volume cutting centre and, together with tougher credit availability, the

strength of the Rupee has impacted on Indian production costs, which creates pressure elsewhere in the supply chain. The

slowdown in growth of Chinese economy which is widely reported to have started in the second half of 2014 was a major factor

in pulling down the global demand for jewellery which may have even decreased in 2015. An increase in demand of some 3%

from the US (still the world's largest market for diamonds) and a firm market in India offset falls in demand in China, Europe

and Japan.

Early indications in 2016 are that there has been some stabilization in prices for polished stones as inventories are being drawn

down. This is feeding through to better prices for rough diamonds and signs that the cycle has bottomed.

Letter from the Chairman (continued)

In Conclusion

While taking longer than ever hoped, your Company has now joined the ranks of diamond miners with more than 38 million

tonnes of kimberlite having been identified for mining. Much work was completed during 2015 in updating the confidence we

have in the Lace diamond resource which culminated in the publication after year end of a new SAMREC compliant resource

and reserve statement. Details of the statements and their accompanying technical report are discussed in the CEO's letter and

are available on the Company's web site.

At the end of March this year, the first sale for 85 years of mined diamonds from Lace was a major milestone for our Company.

We can now look forward to unlocking the full value of this exciting long life mine.

Finally, I would like to thank all our employees for their contribution to the successful transition of Lace from developer to

producer, our partners, consultants and trade union for their co-operation on the Company's progress and all of you for strong

support when we needed it.

Mr. E A Worthington

Chairman

03 May 2016

Letter from the Chief Executive Officer

Dear Shareholder

Development work at the Lace mine continued through 2015, with tunneling concentrating on the 290m doming level and 310m

production level in the Upper K4 (UK4) block.

Kimberlite is a composite volcanic rock with significant amounts of fragmented bits of surrounding rocks that were incorporated

in the original volcanic eruption which can sometimes result in a difficult and friable rock engineering environment. Ironically, it

is this tendency to crumble which also makes it an ideal candidate for the block caving mining method, the preferred mining

method for most modern underground kimberlite mining operations today.

However, getting the needed development tunnels through kimberlite can be challenging, and such was the working conditions

for our underground mining teams for most of 2015. It is with considerable pride that we can say that our teams met this

challenge and completed the development work for the initial mining ramp up at Lace without any serious injury or damage to

our equipment.

While the delay resulting from challenging ground conditions put your Company under cash pressure, management and our

technical team will not cut corners or comprise on safety. Thankfully shareholders and lenders also understood that adherence

to safety standards over-rides all else, and were supportive of the additional capital raising we required in the midst of difficult

market conditions.

The game changer for Lace development during 2015 was the commissioning of our 400 tonne per hour underground conveyor

belt system. This piece of "life-of-mine" infrastructure was completed within budget, despite a South Africa wide change to

mandatory code of practice on underground conveyor belts half way through the year which delayed its commissioning by five

months. The commissioning delay put upward pressures on overall development costs as material needed to be trucked from

underground for five months longer than was planned. The conveyor belt is now fully operational and key to achieving a

smooth ramp up to 30,000 tonnes per month from the UK4 Block by July 2016.

The year under review was the third year in a row of below average rainfall in South Africa. Mindful that water management and

consumption is central to achieving planned future production rates of 100,000 tonne per month, the Lace technical team

finalised its trade off studies on bottom cut off screen sizes in the processing plant. The recommendation was to lift the bottom

screen size in the plant from 1.00 mm to 1.25 mm. This change results in a significant reduction in recovered diamond grades,

however, the diamonds no longer being recovered are the smallest and lowest value diamond sizes. Studies showed that the

recovery and sale of these would be break even at best. While the impact on economics was minimal, the biggest driver behind

the decision was water saving in the plant as this low value small sand and slime fraction would be the biggest consumer of

water and reagents in the processing plant. As a result of the decision, water consumption in the plant has been cut by 30%

from 1 cubic metre of water per tonne of kimberlite to 0.7 cubic metres per tonne.

The second stage of the water management project has been trade off studies on different x-ray and optical waste sorting

technologies. Because the internal waste with-in the kimberlite cannot possibly contain a diamond, every tonne of waste

removed before it reaches the processing plant further reduces water consumption and processing costs. Evidence is also

emerging that internal waste (which is predominantly basalt, a harder rock than the rest of the kimberlite) is a major contributor

to diamond damage and breakage in the secondary crushing circuits of diamond processing plants, so removing it up front is

also beneficial in this regard. During the year, the Lace team completed 3-tonne bulk tests on waste sorting machines at

commercial run rates of 250 tonnes per hour. The tests demonstrated that up to 65% of the waste could be ejected before the

processing plant without losing any kimberlite. This technology has the ability to cut plant water consumption by a further 33%

and deliver a high grade concentrate to the dense media separation units. This technology will be introduced at Lace over the

next few years ahead of underground tonnages from the first block cave pushing the plant towards full production. Also,

because our conveyor belt capacity from underground is 400 tonnes per hour (double the plant capacity) and (when mature)

the planned block caves can be mined faster than is currently proposed, the waste sorting technology will allow higher diamond

production from Lace over a shorter time period.

During 2014 and 2015, almost 4,500m of underground core drilling was completed by the Company's in-house drilling crews.

This program was designed and supervised by the Company's independent geological consultants, MPH Consulting Ltd of

Toronto, and delineated increasing volumes of high-grade K4 kimberlite in the Upper K4 block and deeper levels of the pipe for

future block cave mining. This drilling program will be on-going with a further 6,600m of drilling planned over the next few years

for rim definition and improved mining grade forecasting purposes. In addition, almost 20,000 tonnes of K4 and K6 kimberlite

was extracted during development for the first UK4 mining block. These development tunnels were treated as a controlled bulk

test by MPH Consulting Ltd, which also took a channel sample at each bulk test site for microdiamond analysis.

Letter from the Chief Executive Officer (continued)

More than 3,500kg of drill core and channel sample material was analysed and resulted in the recovery of 5,390

microdiamonds (diamonds less than 1.00 mm in two dimensions). The microdiamond and macrodiamond recoveries were then

analysed by Dr Johan Ferreira, the former chief geostatistician for De Beers and one of the world's leading microdiamond

experts. After year end, Dr Ferreira aligned his analysis to the new 1.25 mm bottom screen size in the plant, which allowed for

very accurate grade and carat value estimates to be made regarding future mine recoveries at Lace. In March 2016, Dr

Ferreira and MPH Consulting Ltd's work resulted in the publication of a new technical report and updated Resource and

Reserve Statement for the Lace project. The report concludes that the updated resource/reserve statement is a conservative

base case with compelling evidence that considerable grade and value per carat upside is likely which will be defined with

additional production and evaluation data.

The total resource tonnage in the main Lace pipe has been estimated at 38.49 million tonnes to the 920m level, an increase of

16% from 33.12 million tonnes estimated in March 2012 to the 855m level. The resource remains open at depth. The

recoverable diamonds from this resource at the increased bottom screen size of 1.25 mm is estimated at 9.39 million carats

(March 2012: 13.39 million carats, at 1.00 mm screen size). The average value of the Lace diamonds from the stone size

frequency distribution achieved with the 1.25 mm bottom screen size has been forecast to be $164 per carat in the current

market (March 2012: $160 per carat). Importantly, this price does not include any values achieved from the recovery of special

stones, for which Lace was known during its previous production period pre-Great Depression, including diamonds up to 122

carats in size.

The K4 kimberlite, which comprises 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 (58 cpht

previously at 1.00 mm bottom screen size). The base case average recoverable grade from all tonnage is estimated at 24.4

cpht at 1.25 mm bottom screen size (40 cpht at 1.00 mm previously), equating to an average of US$40 revenue per tonne. At

an exchange rate of 15 South African Rands to the US dollar, the average grade and carat value equate to gross revenue of

ZAR 600 per tonne compared with forecast mining and processing costs of ZAR 238 per tonne for the UK4 Block and

ZAR 145 per tonne for block caving. This represents robust operating margins of 60% and 76% respectively.

Within the 38.49 million tonnes of resources, 2.21 million tonnes of the UK4 Block has been classified as a mineral reserve

between the 230 and 370m levels. This reserve comprises 1.43 million tonnes of K4 in the probable category grading 36.2 cpht

and 0.78 million tonnes of low grade K6 kimberlite in the probable category at a grade of 9.0 cpht. The whole block could be

mined for 60 months at a rate of 35,000 tonnes per month and generate a positive NPV of ZAR 133.3 million (US$8.9 million)

and a robust IRR of 59%. It is the Company's intention to concentrate on mining the high-grade K4 kimberlite within this

reserve first while the first block cave is established on the 500m level (being outside of the current mineral reserve estimate).

There may well be opportunities to optimise the mine plan as more K4 is found to be present as the mine progresses. When

block caving progresses, any unmined portions of this reserve would then be extracted in subsequent caves.

The small Satellite pipe which was incorporated into the previous resource statement is not included in the new resource

statement as it is not considered a feasible mining proposition at this stage. The grade model for the UK4 Block reserve has

been found to show high precision in predicting recovered diluted grades achieved in the bulk sampling on -250m, -290m and -

310m levels. Lace has been demonstrated as a reliable microdiamond producer allowing for high-confidence grade estimates,

and the valuation data from 4,982 carats recovered during bulk sampling similarly gives confidence to the valuation model.

There is compelling geological evidence that K4 and K6 grade will improve within the block cave mining depths (and Lift 2 of

the UK4 Mine), however more evaluation work is needed to verify these trends. The CRB (country rock breccia) unit which

comprises 9% of the current resource model has been assigned zero grade at this time, although it is known to be significantly

diamondiferous. The CRB will be bulk and microdiamond sampled in coming months and will be incorporated into updated

grade estimations as these data become available, such that the carat content at Lace is highly likely to improve on the current

estimates. Kimberlite volumes and tonnages will also change as more delineation work is completed.

The full technical report and resource/reserve statement is available on the Company's website at www.diamondcorp.plc.uk.

Resource Statement (Unaudited)

Mining Block	Resource Classification	Kimberlite Facies	Volume 3 (m x 1000)	Density	Tonnes	% of Total	Recovered Grade (cpt)	Carats	USD/ct
Upper K4 mine 230- 370m levels	Indicated	K4	1,065.486	2.585	2,754,281	36.9%	0.365	1,005,313	$164.00
	Indicated	K6	1,834.957	2.563	4,702,995	63.1%	0.090	422,329	$164.00
	Total Indicated		2,900.443		7,457,276	100.0%	0.191	1,427,642	$164.00
	Inferred	K8	144.722	2.641	382,211	16.3%	0.160	61,154	$164.00
	Inferred	CRB	723.803	2.709	1,960,782	83.7%	0.000	-	$164.00
	Total Inferred		868.525		2,342,993	100.0%	0.026	61,154	$164.00
Block Cave 1 370m- 510m levels	Inferred	K4	1,626.754	2.59	4,213,293	48.4%	0.400	1,685,317	$164.00
	Inferred	K6	1,262.561	2.56	3,232,157	37.1%	0.100	323,216	$164.00
	Inferred	K8	13.713	2.64	36,203	0.4%	0.160	5,793	$164.00
	Inferred	CRB	451.786	2.71	1,224,339	14.1%	0.000	-	$164.00
		Total	3,354.815		8,705,993	100.0%	0.231	2,014,326	$164.00
Block Cave 2 510m- 700m levels	Inferred	K4	2,225.776	2.59	5,764,760	59.0%	0.400	2,305,904	$164.00
	Inferred	K6	1,484.048	2.56	3,799,164	38.9%	0.100	379,916	$164.00
	Inferred	K8	0.000	2.64	-	0.0%	0.160	-	$164.00
	Inferred	CRB	74.018	2.71	200,589	2.1%	0.000	-	$164.00
		Total	3,783.842		9,764,513	100.0%	0.275	2,685,820	$164.00
Block Cave 3 700m- 920m levels	Inferred	K4	2,800.965	2.59	7,254,499	71.0%	0.400	2,901,799	$164.00
	Inferred	K6	1,153.812	2.56	2,953,759	28.9%	0.100	295,376	$164.00
	Inferred	K8	0.000	2.64	-	0.0%	0.160	-	$164.00
	Inferred	CRB	3.577	2.71	9,694	0.1%	0.000	-	$164.00
		Total	3,958.354		10,217,952	100.0%	0.313	3,197,175	$164.00
Lace Mine Totals	Indicated		2,900.443	2.57	7,457,276	19.4%	0.191	1,427,642	$164.00
	Inferred		11,965.54	2.59	31,031,451	80.6%	0.256	7,958,475	$164.00
		Total	14,865.979	2.59	38,488,727	100.0%	0.244	9,386,117	$164.00

All figures are gross. DiamondCorp plc owns a 74% equity interest in the project.

Based on a recoverable grade model for the current Lace plant configuration (+1.25mm bottom cut-off screen size).

Diamond price based on bulk sample parcels and January 2016 price book.

Effective date 1 February 2016.

Reserve Statement (Unaudited)

The UK4 Mining block constitutes a portion of the above Indicated Resource, with reserves estimated as per the following

table:

Mining Block	Resource Classification	Kimberlite Facies	Tonnes	Recovered Grade (cpt)	Carats	USD/carat	USD/tonne
Upper K4 mine 230-370m levels	Probable	K4	1,427,841	0.362	516,575	$164.00	$59.33
	Probable	K6	782,244	0.090	70,296	$164.00	$14.74
	Total Probable		2,210,086	0.266	586,870	$164.00	$43.55

Plant recovery 100% of recoverable grade, mining recovery 100%.

Health and safety remains a priority for management. The Lost Time Injury Frequency Rate (LTIFR) for 2015 was 2.34, up

considerably from 0.72 in 2014. Lace had eight lost time injuries and 76,772 lost time injury free shifts during 2015.

Management aims for zero harm to its employees and targets a LTIFR of less than 0.5. (LTIFR is an industry standard

calculation based on the number of lost time injuries multiplied by 200,000, divided by the number of lost time injuries multiplied

by 9). PricewaterhouseCoopers LLP in their 2014 SA Mine Review show LTIFR in South African gold mines averaged 4.2,

platinum 2.1, coal 1.2 and other commodities, including diamonds, 1.1. A concerted effort is underway to reduce the LTIFR

during 2016.

Last month, the Company enlarged its underground mining fleet by acquiring an additional four secondhand low mileage

Sandvik 20-tonne dump trucks, two Sandvik 7-tonne loaders and two Sandvik single boom drill rigs for a quarter of the cost of

new equipment which will help Lace achieve its target of 30,000 tonnes per month of kimberlite throughput by July.

The Company looks forward to the rest of 2016 as the year we restart commercial sales of diamonds from the Lace mine for

the first time since 1931. This will be a watershed year for the Company as we finally make the long and difficult transition to

diamond producer.

Finally, I would like to thank all of our loyal employees for their efforts in contributing to the successful transition of the Lace

project from development to producer. In particular, I would like to thank our outgoing Chief Operating Officer Steve West who

has retired early due to personal health challenges. Without Steve's unfaltering commitment the Company and the Lace

project, would not be in the solid position we are in today.

Mr. P R Loudon

Chief Executive Officer

03 May 2016

Consolidated and Separate Income Statement

		Group	Group	Company	Company
		2015	2014	2015	2014
	Note	£	£	£	£
Other income		23 311	39 097	2 700	3 500
Operating expenses		(1,879,990)	(1,605,381)	(816,015)	(318,970)
Operating loss	20	(1,856,679)	(1,566,284)	(813,315)	(315,470)
Finance income		16 909	49	110	49
Fair value adjustments		(570,257)	(1,685,439)	(217,699)	(679,367)
Finance costs	22	-	-	(151,308)	(253,466)
Loss before taxation		(2,410,027)	(3,251,674)	(1,182,212)	(1,248,254)
Taxation	23	-	-	-	-
Loss for the year		(2,410,027)	(3,251,674)	(1,182,212)	(1,248,254)
Loss attributable to :
Owners of the parent		(2,254,597)	(3,141,615)	(1,182,212)	(1,248,254)
Non-controlling interest		(155,430)	(110,059)	-	-
		(2,410,027)	(3,251,674)	(1,182,212)	(1,248,254)
Loss per share
Per share information
Basic and diluted loss per share (pence)	26	(0.64)	(1.02)	-	-

Consolidated and Separate Statement of Comprehensive Income

		Group	Group	Company	Company
		2015	2014	2015	2014
			Restated
	Note	£	£	£	£
Loss for the year		(2,410,027)	(3,251,674)	(1,182,212)	(1,248,254)
Other comprehensive loss:
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign operations		(2,895,221)	(369,402)	-	-
Other comprehensive loss for the year	25	(2,895,221)	(369,402)	-	-
Total comprehensive loss		(5,305,248)	(3,621,076)	(1,182,212)	(1,248,254)

Total comprehensive loss attributable to:
Owners of the parent		(4,628,485)	(3,420,581)	(1,182,212)	(1,248,254)
Non-controlling interest		(676,763)	(200,495)	-	-
		(5,305,248)	(3,621,076)	(1,182,212)	(1,248,254)

Consolidated and Separate Statement of Financial Position as at
31 December 2015
		Group			Company
		2015	2014	2013	2015	2014
			Restated	Restated
	Note	£	£	£	£	£
Assets
Non-Current Assets
Property, plant and equipment	4	27,472,410	23,993,549	14,892,223	237,804	257,622
Goodwill	5	2,403,483	3,069,294	3,195,164	-	-
Investments in subsidiaries	6	-	-	-	4,672,501	4,672,501
Loans to group companies	7	-	-	-	20,804,406	14,307,300
Rehabilitation Deposit	9	128,113	101,199	43,632	-	-
Restricted cash	12	60,913	70,232	73,108	-	-
		30,064,919	27,234,274	18,204,127	25,714,711	19,237,423
Current Assets
Inventories	10	627,535	455,684	557,085	-	-
Current tax receivable		5,003	6,651	6,651	-	-
Trade and other receivables	11	371,120	648,810	880,990	-	-
Cash and cash equivalents	12	1,722,486	2,531,420	2,220,130	1,618,259	1,054,175
		2,726,144	3,642,565	3,664,856	1,618,259	1,054,175
Total Assets		32,791,063	30,876,839	21,868,983	27,332,970	20,291,598
Equity and Liabilities
Equity
Equity Attributable to Equity Holders
of Parent
Share capital	13	44,626,346	37,161,667	35 190 544	44,626,346	37,161,667
Reserves		(5,927,267)	(3,503,973)	(3,218,098)	561,818	611,222
Accumulated loss		(28,303,519)	(26,048,922)	(22,907,307)	(21,781,392)	(20,599,180)
		10,395,560	7,608,772	9,065,139	23,406,772	17,173,709
Non-controlling interest		(2,824,126)	(2,147,363)	(1,946,868)	-	-
Total Equity		7,571,434	5,461,409	7,118,271	23,406,772	17,173,709
Liabilities
Non-Current Liabilities
Other financial liabilities	17	16,974,515	17,972,843	9,239,447	455,000	455,000
Provisions	18	518,301	581,756	528,828	-	-
		17,492,816	18,554,599	9,768,275	455,000	455,000
Current Liabilities
Compound instruments - debt component	16	2,684,835	2,811,742	2,532,981	1,363,050	1,234,488
Compound instruments - derivative	16	3,596,870	3,730,434	2,107,849	1,480,203	1,409,446
component
Trade and other payables	19	1,445,108	318,655	341,607	627,945	18,955
		7,726,813	6,860,831	4,982,437	3,471,198	2,662,889
Total Liabilities		25,219,629	25,415,430	14,750,712	3,926,198	3,117,889
Total Equity and Liabilities		32,791,063	30,876,839	21,868,983	27,332,970	20,291,598
The financial statements on pages 27 to 76, of DiamondCorp plc, registered number 5400982, were approved by the Board of Directors and authorised for
issue on 26 April 2016 and signed on behalf of the Board of Directors.				Mr. E A Worthington, Director

Consolidated and Separate Statement of Changes in Equity

	Share capital	Share premium	Total share	Foreign currency	Share option	Warrant reserve	Reserves	Accumulated	Total attributable	Non-controlling	Total equity
			capital	translation	reserve			loss	to owner of the	interest
				reserve					parent
	£	£	£	£	£	£	£	£	£	£	£
Group
Balance at 1 January 2014 as previously stated	8,305,184	26,885,360	35,190,544	(2,425,367)	526,131	92,000	(1,807,236)	(22,907,307)	10,476,001	(1,580,044)	8,895,957
Restatement of goodwill (Note 5)	-	-	-	(1,410,862)	-	-	(1,410,862)	-	(1,410,862)	(366,824)	(1,777,686)
Balance at 1 January 2014 restated	8,305,184	26,885,360	35,190,544	(3,836,229)	526,131	92,000	(3,218,098)	(22,907,307)	9,065,139	(1,946,868)	7,118,271
Loss for the year	-	-	-	-	-	-	-	(3,141,615)	(3,141,615)	(110,059)	(3,251,674)
Other comprehensive loss	-	-	-	(278,966)	-	-	(278,966)	-	(278,966)	(90,436)	(369,402)
Total comprehensive loss for the year	-	-	-	(278,966)	-	-	(278,966)	(3,141,615)	(3,420,581)	(200,495)	(3,621,076)
Issue of shares	41,526	1,929,597	1,971,123	-	-	-	-	-	1,971,123	-	1,971,123
Value attributed for equity based shared based payments	-	-	-	-	5,899	-	5,899	-	5,899	-	5,899
Fair value adjustment of reserve	-	-	-	-	-	(12,808)	(12,808)	-	(12,808)	-	(12,808)
Total contributions by and distribution to owners	41,526	1,929,597	1,971,123	-	5,899	(12,808)	(6,909)	-	1,964,214	-	1,964,214
of company recognised directly in equity
Balance at 01 January 2015	8,346,710	28,814,957	37,161,667	(4,115,195)	532,030	79,192	(3,503,973)	(26,048,922)	7,608,772	(2,147,363)	5,461,409
Loss for the year	-	-	-	-	-	-	-	(2,254,597)	(2,254,597)	(155,430)	(2,410,027)
Other comprehensive loss	-	-	-	(2,373,890)	-	-	(2,373,890)	-	(2,373,890)	(521,333)	(2,895,223)

Consolidated and Separate Statement of Changes in Equity (continued)

	Share capital	Share premium	Total share	Foreign currency	Share option	Warrant reserve	Reserves	Accumulated	Total attributable	Non-controlling	Total equity
			capital	translation	reserve			loss	to owner of the	interest
				reserve					parent
	£	£	£	£	£	£	£	£	£	£	£
Group (continued)
Total comprehensive loss for the year	-	-	-	(2,373,890)	-	-	(2,373,890)	(2,254,597)	(4,628,487)	(676,763)	(5,305,250)
Issue of shares	92,711	7,292,776	7,385,487	-	-	-	-	-	7,385,487	-	7,385,487
Value attributed for equity based shared based payments	-	-	-	-	29,788	-	29,788	-	29,788	-	29,788
Warrants issued during the year	-	79,192	79,192	-	-	(79,192)	(79,192)	-	-	-	-
Total contributions by and distribution to owners	92,711	7,371,968	7,464,679	-	29,788	(79,192)	(49,404)	-	7,415,275	-	7,415,275
of company recognised directly in equity
Balance at 31 December 2015	8,439,421	36,186,925	44,626,346	(6,489,085)	561,818	-	(5,927,267)	(28,303,519)	10,395,560	(2,824,126)	7,571,434

Note	13	13	13		14	15

Consolidated and Separate Statement of Changes in Equity

	Share capital	Share premium	Total share capital	Foreign currency translation	Share option reserve	Warrant reserve	Reserves	Accumulated loss	Total attributable to owner of the	Non-controlling interest	Total euity
				reserve					parent
	£	£	£	£	£	£	£	£	£	£	£
Company
Balance at 01 January 2014	8,305,184	26,885,360	35,190,544	-	526,131	92,000	618,131	(19,350,926)	16,457,749	-	16,457,749
Loss for the year	-	-	-	-	-	-	-	(1,248,254)	(1,248,254)	-	(1,248,254)
Total comprehensive loss for the year	-	-	-	-	-	-	-	(1,248,254)	(1,248,254)	-	(1,248,254)
Issue of shares	41,526	1,929,597	1,971,123	-	-	-	-	-	1,971,123	-	1,971,123
Value attributed for equity settled share based payments	-	-	-	-	5,899	-	5,899	-	5,899	-	5,899
Fair value adjustment of reserve	-	-	-	-	-	(12,808)	(12,808)	-	(12,808)	-	(12,808)
Total contributions by and distributions to owners	41,526	1,929,597	1,971,123	-	5,899	(12,808)	(6,909)	-	1,964,214	-	1,964,214
of company recognised directly in equity
Balance at 01 January 2015	8,346,710	28,814,957	37,161,667	-	532,030	79,192	611,222	(20,599,180)	17,173,709	-	17,173,709
Loss for the year	-	-	-	-	-	-	-	(1,182,212)	(1,182,212)	-	(1,182,212)
Total comprehensive loss for the year	-	-	-	-	-	-	-	(1,182,212)	(1,182,212)	-	(1,182,212)
Issue of shares	92,711	7,292,776	7,385,487	-	29,788	-	29,788	-	7,415,275	-	7,415,275
Warrants exercised during the year	-	79,192	79,192	-	-	(79,192)	(79,192)	-	-	-	-
Total contributions by and distributions to owners	92,711	7,371,968	7.464,679	-	29,788	(79,192)	(49,404)	-	7,415,275	-	7,415,275
of company recognised directly in equity
Balance at 31 December 2015	8,439,421	36,186,925	44,626,346	-	561,818	-	561,818	(21,781,392)	23,406,772	-	23,406,772
Note	13	13	13		14	15

Consolidated and Separate Statement of Cash Flows
		Group		Company
		2015	2014	2015	2014
	Note	£	£	£	£
Cash flows from operating activities
Cash used in operations	27	(554,640)	(879,829)	(233,911)	(560,646)
Finance costs		-	-	(20,103)	-
Tax received		1,648	-	-	-
Net cash used in operating activities		(552,992)	(879,829)	(254,014)	(560,646)
Cash flows from investing activities
Purchase of property, plant and equipment	4	(7,284,396)	(7,971,705)	-	-
Sale of property, plant and equipment	4	5,139	-	-	-
Loans advanced to group companies		-	-	(6,497,106)	(362,330)
Outflow relating to other non-current asset		(26,914)	(57,567)	-	-
Interest Income		16,909	49	110	49
Net cash used in investing activities		(7,289,262)	(8,029,223)	(6,496,996)	(362,281)
Cash flows from financing activities
Proceeds on share issue	13	7,464,680	1,971,122	7,464,679	1,971,123
Proceeds from other financial liabilities		-	8,733,396	-	-
Repayment of compound instruments		-	-	(149,585)	-
Net cash generated from financing activities		7,464,680	10,704,518	7,315,094	1,971,123
Total cash movement for the year		(377,574)	1,795,466	564,084	1,048,196
Cash at the beginning of the year		2,531,420	2.220,130	1,054,175	5,979
Effect of exchange rate movement on cash balances		(431,360)	(1,484,176)	-	-
Total cash at end of the year	12	1,722,486	2,531,420	1,618,259	1,054,175

Basis of Preparation and Accounting Policies

1. General information

DiamondCorp plc is a Company incorporated in England and Wales under the Companies Act 2006 and incorporated as an

external company in South Africa under the Companies Act No 71 of 2008.

These financial statements are presented in pounds sterling because that is the functional currency of the parent Company

as well as presentation currency of the Group. Foreign operations are included in accordance with the policies set out in

this note.

These accounting policies are consistent with the previous period.

Statement of compliance

The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRSs) issued by the IASB and in accordance with IFRS interpretations committee (IFRS IC) interpretations. The

financial statements have also been prepared in accordance with IFRSs adopted by the European Union and therefore the

Group financial statements comply with Article 4 of the EU IAS Regulation.

Basis of preparation

The financial statements have been prepared in accordance with the UK Companies Act 2006 applicable to companies

reporting under IFRS.

The financial statements have been prepared on the historical cost basis, except for certain financial instruments that are

measured at fair value, as explained in the accounting policies below. Historical cost is generally based on fair value of the

consideration given in exchange for assets. The financial statements have been prepared on a going concern basis. The

principal accounting policies adopted are set out below.

1.1 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating-decision

maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the

operating segments, has been identified as the Chief Executive Officer that makes strategic decisions.

The basis of segmental reporting has been set out in note 3 of the financial statements.

1.2 Consolidation

Basis of consolidation

The audited consolidated and separate financial statements incorporate the audited consolidated and separate financial

statements of the group and all investees which are controlled by the Company (its subsidiaries).

The group has control of an investee when it has power over the investee; it is exposed to or has rights to variable returns

from involvement with the investee; and it has the ability to use its power over the investee to affect the amount of the

investor's returns.

The results of subsidiaries are included in the audited consolidated and separate financial statements from the effective

date of acquisition to the effective date of disposal.

Adjustments are made when necessary to the audited consolidated and separate financial statements of subsidiaries to

bring their accounting policies in line with those of the group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the

group's interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are

allocated to the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest.

Basis of Preparation and Accounting Policies

1.2 Consolidation (continued)

Basis of consolidation (continued)

Transactions which result in changes in ownership levels, where the group has control of the subsidiary both before and

after the transaction are regarded as equity transactions and are recognised directly in the statement of changes in equity.

The difference between the fair value of consideration paid or received and the movement in non-controlling interest for

such transactions is recognised in equity attributable to the owners of the parent.

Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to

fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the

controlling interest.

Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the

subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling

interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the

amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is

recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the

aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous

carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When

assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been

recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other

comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the

relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable

IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the

fair value on initial recognition of the financial asset in accordance with IAS 39 Financial Instruments: Recognition and

Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled

entity.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value

of the identifiable assets and liabilities of a subsidiary, at the date of acquisition. Goodwill is initially recognised as an asset

at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an

asset is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not

subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to the Group's cash-generating unit expected to benefit from the

synergies of the combination. The cash-generating unit to which goodwill has been allocated is tested for impairment

annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the

cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying

amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying

amount of each asset in the unit.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on

disposal.

Goodwill arising on acquisition of foreign entities is considered an asset of the foreign entity. In such cases the goodwill is

translated to the presentation currency of the group at the end of each reporting period with the adjustment recognised in

equity through other comprehensive income. Refer to note 5 for the prior period restatement of goodwill.

Basis of Preparation and Accounting Policies

1.3 Significant judgments and sources of estimation uncertainty

In preparing the audited consolidated and separate financial statements, management is required to make estimates and

assumptions that affect the amounts represented in the audited consolidated and separate financial statements and related

disclosures. Use of available information and the application of judgment are inherent in the formation of estimates. Actual

results in the future could differ from these estimates which may be material to the audited consolidated and separate

financial statements. Significant judgments include:

Impairment testing

Impairment of goodwill - Judgment is applied in determining appropriate assumptions to be used in testing for and

calculating impairment. See policy regarding Goodwill in note 1.2 and estimates in note 5.

Provisions

Provisions were raised and management determined an estimate based on the information available. Additional disclosure

of these estimates of provisions are included in note 18 - Provisions - of the financial statements.

Provisions are recognised when:

the group has a present obligation as a result of a past event;

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;

and

a reliable estimate can be made of the obligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Where

some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the

reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the

entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the

reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a

provision.

Valuations

* Valuation of inventory - Judgment was applied in calculating the initial carrying value of inventory and judgment

continues to be applied in assessing the net realisable value. See accounting policy regarding Inventories.

* Valuation of warrants, share options and ordinary shares issued as consideration - Judgment is applied in determining

appropriate assumptions to be used in calculating the fair value of warrants, shares and share options issued. See notes

14 and 15 of the financial statements.

* Valuation of the bifurcated embedded derivative in the convertible bonds - Judgment is applied in determining

appropriate assumptions to be used in calculating the fair value of convertible bonds. See note 16 of the financial

statements.

Going concern

Judgment is applied in assessing the likelihood and timing of future cash flows associated with the Group's activities.

During the year management have improved the Group's liquidity position for the next 12 months by raising funds from the share

placing and rescheduling the repayment of the loan to IDC. The Group expects to commence commercial production in the

third quarter 2016 and thus the current liquidity model is based on the judgements around the adequate production rates and sales prices. Whilst there are uncertainties in relation to certain judgements, management have concluded that no material uncertainty exist in relation to the ability of the Group to continue as a going concern.

1.4 Property, plant and equipment

Initial recognition

The cost of an item of property, plant and equipment is recognised as an asset when:

it is probable that future economic benefits associated with the item will flow to the company; and

the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Basis of Preparation and Accounting Policies

1.4 Property, plant and equipment (continued)

Initial recognition (continued)

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred

subsequently to add to, replace part of, service it, the initial estimate of the rehabilitation obligation, and for qualifying

assets (where relevant), borrowing costs. If a replacement cost is recognised in the carrying amount of an item of property,

plant and equipment, the carrying amount of the replaced part is derecognised. The purchase price or construction cost is

the aggregate amount paid and the fair value any other consideration given to acquire the asset.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs

ceases and costs are either regarded as part of the cost of inventory or expensed, except for costs which qualify for

capitalisation relating to mining asset additions or improvements, underground mine development or mineable reserve

development.

Upon completion of mine construction, the assets are transferred into "Property, plant and equipment". Items of property,

plant and equipment and mining properties are stated at cost, less accumulated depreciation and accumulated impairment

losses.

Mines under construction

Upon transfer of "Exploration and evaluation assets" into "Construction in progress" within "Property, plant and equipment",

all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised within

"Construction in progress". Development expenditure is net of proceeds from the incidental sale of diamonds extracted

during the development phase. After production starts, all assets included in "Construction in progress" are transferred to

"Mining properties" within "Property, plant and equipment".

Depreciation/amortisation

Mining properties are depreciated/amortised on a unit-of-production basis over the economically recoverable reserves of

the mine concerned, except in the case of assets whose useful life is shorter than the life of the mine, in which case the

straight-line method is applied. Only proven and probable reserves are included in the unit of production calculation.

Other plant and equipment such as mobile mine equipment is generally depreciated on a straight-line basis over their

estimated useful lives to their residual values.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Land N/A

Buildings 20 years

Plant and machinery 5 - 20 years

Mining rights Life of mine

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If

the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another

asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when

the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is

determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Assets which the (company/group) holds for rentals to others and subsequently routinely sell as part of the ordinary course

of activities, are transferred to inventories when the rentals end and the assets are available-for-sale. These assets are not

accounted for as non-current assets held for sale. Proceeds from sales of these assets are recognised as revenue. All cash

flows on these assets are included in cash flows from operating activities in the cash flow statement.

Basis of Preparation and Accounting Policies

1.4 Property, plant and equipment (continued)

Major maintenance and repairs

Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of assets and

overhaul costs. Where an asset or part of an asset that was separately depreciated and is now written off is replaced, and it

is probable that future economic benefits associated with the item will flow to the Group through an extended life, the

expenditure is capitalised.

Where part of the asset was not separately considered as a component, the replacement value is used to estimate the

carrying amount of the replaced asset(s).

1.5 Financial liabilities / assets

Initial recognition and measurement

Financial liabilities are classified as either financial liabilities at fair value through profit or loss ("at FVTPL") or 'other

financial liabilities'.

Other financial liabilities

Other liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest

expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest

expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash

payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying

amount on initial recognition.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they

expire.

Financial liabilities at fair value through profit or loss (FVTPL)

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at

FVTPL.

A financial liability is classified as held for trading if:

it has been incurred principally for the purpose of repurchasing it in the near term; or

on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together

and has a recent actual pattern of short-term profit-taking; or

it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognition inconsistency that would

otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and

its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management

or investment strategy, and information about the grouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments:

Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at

FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit

or loss.

Basis of Preparation and Accounting Policies

1.5 Financial liabilities / assets (continued)

Derivative financial instruments

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently

remeasured to their fair value at each balance sheet date.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is

recognised as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining

maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other

derivatives are presented as current assets or current liabilities.

Embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their

risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at

FVTPL.

An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid

instrument to which the embedded derivative relates is more than 12 months and is not expected to be realised or settled

within 12 months. Other derivatives are presented as current assets or current liabilities.

Loans to / (from) group companies

These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are

recognised initially at fair value plus direct transaction costs.

Loans to group companies are classified as loans and receivables.

Loans from group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value (net of transaction costs), and are subsequently

measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable

amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial

difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or

delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The

allowance recognised is measured as the difference between the asset's carrying amount and the present value of

estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is

recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the

allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against

operating expenses in profit or loss.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value (net of transaction costs), and are subsequently measured at amortised

cost, using the effective interest rate method.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest

income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts

(including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and

other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.

Basis of Preparation and Accounting Policies

1.5 Financial liabilities / assets (continued)

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, other short-term highly liquid investments and

restricted cash that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in

value. These are initially and subsequently recorded at amortised cost.

Convertible bond policy

The component parts of compound instruments (convertible bonds) issued by the Group are classified separately as an

amortised cost financial liability and an embedded derivative financial liability in accordance with the substance of the

contractual arrangement. At the date of issue, the fair value of the embedded derivative financial liability component is

estimated using observable market data input into the Black Scholes model, modified for the Barone Adesi Whaley

approximation. This amount is recorded as an embedded derivative financial liability held at fair value through profit and

loss. The amortised cost financial liability (host debt contract) is determined by deducting the amount of the embedded

derivative component from the fair value of the compound instrument as a whole. The host debt contract is held on an

amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity

date.

Financial guarantee contract liabilities

Financial guarantee contract liabilities are measured initially at their fair values and, if not designated as at FVTPL, are

subsequently measured at the higher of:

the amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions, Contingent

Liabilities and Contingent Assets; and

the amount initially recognised (fair value) less, when appropriate, cumulative amortisation recognised in

accordance with IAS 18 Revenue.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue cost.

1.6 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in

respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to

(recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by

the end of the reporting period.

Deferred tax assets and liabilities

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and

liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is

accounted for using the balance sheet liability method. A deferred tax liability is recognised for all taxable temporary

differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a

transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Deferred tax liabilities (assets) are recognised for taxable temporary differences arising on investments in subsidiaries and

associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference

and it is probable that the temporary difference will not reverse in the foreseeable future. A deferred tax asset is not recognised

when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither

accounting profit nor taxable profit (tax loss).

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Basis of Preparation and Accounting Policies

1.6 Tax (continued)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current

tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its

current tax assets and liabilities on a net basis.

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future

taxable profit will be available against which the unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is

realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the

end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to

the extent that the tax arises from:

a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or

a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are

credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or

charged, in the same or a different period, directly in equity.

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease

is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating leases - lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term and is included in the

operating expenses of the group. The difference between the amounts recognised as an expense and the contractual

payments are recognised as an operating lease asset / liability. This asset / liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

1.8 Inventories

Consumable inventories are measured at the weighted average basis, and diamond inventories are measured at the net

realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion

and the estimated costs necessary to make the sale.

The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the

inventories to their present location and condition.

When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which

the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of

inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any

write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of

inventories recognised as an expense in the period in which the reversal occurs.

Basis of Preparation and Accounting Policies

1.9 Impairment of assets

The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If

any such indication exists, the group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the group also tests goodwill aquired in a business combination

for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is

not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit

to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to dispose and its

value in use. In assessing value in use, the estimated future cash flows are discounted to the present value using a pre-tax

discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for

which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its

recoverable amount. That reduction is an impairment loss. An impairment loss is recognised as an expense immediately,

unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation

decrease.

Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual

cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable

and consistent allocation basis can be identified.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior

periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the

recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not

exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in

prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill

is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation

increase.

1.10 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its

liabilities.

Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,

from the proceeds.

1.11 Share based payments

Equity-settled share-based payments to employees are measured at the fair value of the equity instruments granted.

Equity-settled share-based payment instruments issued to persons other than employees are measured at the fair value of

the goods and services received, unless that fair value cannot be estimated reliably. If that is the case, the fair value is

measured at the fair value of the equity instruments granted. The fair value excludes the effect of non market-based vesting

conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in

note 14 of the financial statements.

The fair value determined at the grant date of the equity-settled share-based payments is expensed over the vesting period,

based on the Group's estimate of equity instruments that will eventually vest. At each balance sheet date, the Group

revises its estimate of the number of equity instruments expected to vest as a result of the effect of non market-based

vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the

cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.

Basis of Preparation and Accounting Policies

1.12 Revenue

Revenue from the sale of diamonds is recorded when the diamonds are sold.

Incidental sale of diamonds derived from underground development is credited to mine development costs.

Revenue earned from sales prior to the new operations achieving commercial production were recognised as a reduction in

the carrying value of the pre-production expenses held within intangible assets. Revenue is measured at the fair value of

the consideration received or receivable. Subsequently it is recognised as a reduction in the carrying value of mine

development costs until production commences once development is completed.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate

applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial

asset to that asset's net carrying value.

Dividends are recognised, in profit or loss, when the company's right to receive payment has been established.

1.13 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are

capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of

borrowing costs eligible for capitalisation is determined as follows:

Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any

temporary investment of those borrowings.

Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of

obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.

The capitalisation of borrowing costs commences when:

expenditures for the asset have occurred;

borrowing costs have been incurred, and

activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or

sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

Bank overdraft and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using

the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or

redemption of borrowings is recognised over the term of the borrowings in accordance with the group's accounting policy for

borrowing costs.

1.14 Translation of foreign currencies

Functional and presentation currency

Items included in the audited consolidated and separate financial statements of each of the group entities are measured

using the currency of the primary economic environment in which the entity operates (functional currency).

The audited consolidated and separate financial statements are presented in Pounds sterling which is the company's

functional and presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional

currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each

balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates

prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies

are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are

measured in terms of historical cost in a foreign currency are not translated.

Basis of Preparation and Accounting Policies

1.14 Translation of foreign currencies (continued)

Group and Company

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included

in the income statement for the period. Exchange differences arising on the retranslation of non-monetary items carried at

fair value are included in the income statement for the period except for differences arising on the retranslation of non-

monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any

exchange component of that gain or loss is also recognised directly in equity.

In addition, in the case of presenting consolidated financial statements, any foreign exchange differences arising on

elimination of intercompany loan balances upon consolidation of the Group Companies, are classified as equity and

transferred to the Group's translation reserve, as these loans are for long term investment purposes.

Determining the rate of exchange to be used

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations

are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the

average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the

exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as other

comprehensive income and transferred to the Group's translation reserve. Such translation differences are recognised in

the income statement in the period in which the foreign operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the

foreign entity and translated at the closing rate.

1.15 Environmental restoration and decommissioning obligations

An obligation to incur environmental restoration, rehabilitation and decommissioning costs arises when disturbance is

caused by the development or ongoing production of a mining property. Such costs arising from the decommissioning of

plant and other site preparation work, discounted to their net present value, are provided for and capitalised at the start of

each project, as soon as the obligation to incur such costs arises. These costs are recognised in the income statement

over the life of the operation, through the depreciation of the asset and the unwinding of the discount on the provision.

Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at

their net present values and recognised in the income statement as extraction progresses.

Changes in the measurement of a liability relating to the decommissioning of plant or other site preparation work (that result

from changes in the estimated timing or amount of the cash flow, or a change in the discount rate) are added to or deducted

from, the cost of the related asset in the current period. If a decrease in the liability exceeds the carrying amount of the

asset, the excess is recognised immediately in the income statement. If the asset value is increased and there is an

indication that the revised carrying value is not recoverable, an impairment test is performed in accordance with the

accounting policy above.

1.16 Rehabilitation deposit

Contributions for the rehabilitation liability are made to an investment with an external insurer to fund the estimated cost of

rehabilitation during and at the end of the life of the mine. The amounts contributed to this insurance fund are accounted for

at cost and as a non-current asset.

1.17 Warranty reserve policy

Options issued as warrants are treated as equity settled share based payments.

Notes to the Consolidated and Separate Financial Statements

2. New Standards and Interpretations

2.1 Standards and interpretations effective and adopted in the current year

In the current year, the group has adopted the following standards and interpretations that are effective for the current financial

year and that are relevant to its operations:

Amendment to IFRS 2: Share-based Payment: Annual improvements project

Amended the definitions of "vesting conditions" and "market conditions" and added definitions for "performance condition" and

"service condition."

The effective date of the amendment is for years beginning on or after 01 July 2014.

The group has adopted the amendment for the first time in the 2015 audited consolidated and separate financial statements.

The impact of the amendment is not material.

Amendment to IFRS 8: Operating Segments: Annual improvements project

Management is now required to disclose the judgments made in applying the aggregation criteria. This includes a brief

description of the operating segments that have been aggregated in this way and the economic indicators that have been

assessed in determining that the aggregated operating segments share similar economic characteristics.

The effective date of the amendment is for years beginning on or after 01 July 2014.

The group has adopted the amendment for the first time in the 2015 audited consolidated and separate financial statements.

The adoption of this amendment has not had a material impact on the results of the group, but has resulted in more disclosure

than would have previously been provided in the audited consolidated and separate financial statements.

Amendment to IAS 16: Property, Plant and Equipment: Annual improvements project

The amendment adjusts the option to proportionately restate accumulated depreciation when an item of property, plant and

equipment is revalued. Instead, the gross carrying amount is to be adjusted in a manner consistent with the revaluation of the

carrying amount. The accumulated depreciation is then adjusted as the difference between the gross and net carrying amount.

The effective date of the amendment is for years beginning on or after 01 July 2014.

The group has adopted the amendment for the first time in the 2015 audited consolidated and separate financial statements.

The impact of the amendment is not material.

Amendment to IAS 38: Intangible Assets: Annual improvements project

The amendment adjusts the option to proportionately restate accumulated amortisation when an intangible asset is revalued.

Instead, the gross carrying amount is to be adjusted in a manner consistent with the revaluation of the carrying amount. The

accumulated amortisation is then adjusted as the difference between the gross and net carrying amount.

The effective date of the amendment is for years beginning on or after 01 July 2014.

The group has adopted the amendment for the first time in the 2015 audited consolidated and separate financial statements.

The impact of the amendment is not material.

Notes to the Consolidated and Separate Financial Statements

2. New Standards and Interpretations (continued)

2.2 Standards and interpretations not yet effective

The group has chosen not to early adopt the following standards and interpretations, which have been published and are

mandatory for the group's accounting periods beginning on or after 01 January 2016 or later periods:

IFRS 9 Financial Instruments

This new standard is the result of a three phase project to replace IAS 39 Financial Instruments: Recognition and

Measurement. To date, the standard includes chapters for classification, measurement and derecognition of financial assets

and liabilities as well as new hedging requirements. The following are main changes from IAS 39:

Financial assets will be categorised as those subsequently measured at fair value or at amortised cost.

Financial assets at amortised cost are those financial assets where the business model for managing the assets is

to hold the assets to collect contractual cash flows (where the contractual cash flows represent payments of principal

and interest only). All other financial assets are to be subsequently measured at fair value.

For hybrid contracts, where the host contract is an asset within the scope of IFRS 9, then the whole instrument is

classified in accordance with IFRS 9, without separation of the embedded derivative. In other circumstances, the

provisions of IAS 39 still apply.

Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassified if the group changes

its business model for the management of financial assets. In such circumstances, reclassification takes place

prospectively from the beginning of the first reporting period after the date of change of the business model.

Investments in equity instruments may be measured at fair value through other comprehensive income. When such

an election is made, it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled

to profit or loss on derecognition of the investment. The election may be made per individual investment.

IFRS 9 does not allow for investments in equity instruments to be measured at cost.

The classification categories for financial liabilities remains unchanged. However, where a financial liability is

designated as at fair value through profit or loss, the change in fair value attributable to changes in the liabilities

credit risk shall be presented in other comprehensive income. This excludes situations where such presentation will

create or enlarge an accounting mismatch, in which case, the full fair value adjustment shall be recognised in profit

or loss.

The new hedging provisions align hedge accounting more closely with the actual risk management approach.

Certain non-derivative financial instruments are now allowed as hedging instruments.

Additional exposures are allowed as hedged items. These exposures include risk components of non-financial items,

net positions and layer components of items, aggregated exposures combining derivative and non-derivative

exposures and equity instruments at fair value through other comprehensive income.

The hedge effectiveness criteria have been amended, including the removal of the 80%-125% "bright line test" to

qualify for hedge accounting.

The concept of rebalancing has been introduced when the hedging relationship is ineffective because the hedge

ratio is no longer appropriate. When rebalancing is required, and provided the risk management objective remains

the same, the hedge ratio is adjusted rather than discontinuing the hedging relationship.

Additional disclosure requirements have been introduced for hedging.

The effective date has not yet been established as the project is currently incomplete. The IASB has communicated that the

effective date will not be before years beginning on or after 01 January 2018. IFRS 9 may be early adopted. If IFRS 9 is early

adopted, the new hedging requirements may be excluded until the effective date.

The group expects to adopt the standard for the first time in the first annual financial period after the effective date.

The impact of this standard is currently being assessed.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 supersedes IAS 11 Construction contracts; IAS 18 Revenue; IFRIC 13 Customer Loyalty Programs; IFRIC 15

Agreements for the construction of Real Estate; IFRIC 18 Transfers of Assets from Customers and SIC 31 Revenue - Barter

Transactions Involving Advertising Services.

Notes to the Consolidated and Separate Financial Statements

2. New Standards and Interpretations (continued)

2.2 Standards and interpretations not yet effective (continued)

IFRS 15 Revenue from Contracts with Customers (continued)

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or

services. An entity recognises revenue in accordance with that core principle by applying the following steps:

Identify the contract(s) with a customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognise revenue when (or as) the entity satisfies a performance obligation.

IFRS 15 also includes extensive new disclosure requirements.

The effective date of the standard is for years beginning on or after 01 January 2017.

The group expects to adopt the standard for the first time in the 2017 audited consolidated and separate financial statements.

The impact of this standard is currently being assessed.

IFRS 16 Leases

After ten years of joint drafting by the IASB and FASB they decided that lessees should be required to recognise assets and

liabilities arising from all leases (with limited exceptions) on the balance sheet. Lessor accounting has not substantially

changed in the new standard.

The model reflects that, at the start of a lease, the lessee obtains the right to use an asset for a period of time and has an

obligation to pay for that right. In response to concerns expressed about the cost and complexity to apply the requirements to

large volumes of small assets, the IASB decided not to require a lessee to recognise assets and liabilities for short-term leases

(less than 12 months), and leases for which the underlying asset is of low value (such as laptops and office furniture).

A lessee measures lease liabilities at the present value of future lease payments. A lessee measures lease assets, initially at

the same amount as lease liabilities, and also includes costs directly related to entering into the lease. Lease assets are

amortised in a similar way to other assets such as property, plant and equipment. This approach will result in a more faithful

representation of a lessee's assets and liabilities and, together with enhanced disclosures, will provide greater transparency of

a lessee's financial leverage and capital employed.

One of the implications of the new standard is that there will be a change to key financial ratios derived from a lessee's assets

and liabilities (for example, leverage and performance ratios).

IFRS 16 supersedes IAS 17, 'Leases', IFRIC 4, 'Determining whether an Arrangement contains a Lease', SIC 15, 'Operating

Leases - Incentives' and SIC 27, 'Evaluating the Substance of Transactions Involving the Legal Form of a Lease'.

The effective date of the standard is for years beginning on or after 01 January 2019.

The group expects to adopt the standard for the first time in the 2019 audited consolidated and separate financial statements.

Notes to the Consolidated and Separate Financial Statements

3. Segmental information

The Group is currently operating the Lace Diamond Mine. This operation is located in the northern part of the Free State

province in South Africa, 200 kilometres from Johannesburg, 30 kilometres from Kroonstad and 30 kilometres from

Viljoenskroon. The Lace Diamond Mine operation is treated as a single operation with the corporate head office and other

subsidiaries reported separately, including consolidation entries.

The Lace Diamond Mine segment will derive income primarily from the production and sale of rough and polished diamonds.

All the other segments namely DiamondCorp plc, DiamondCorp Holdings Ltd and Soapstone Investment Ltd are primarily

focused on administrative and financing activities.

2015
	Income		Separately disclosable items
	Total other	Loss for the	Depreciation	Interest	Interest	Taxation
	income	year	and	income	expense
			amortisation
	£	£	£	£	£	£
Lace Diamond Mines (Pty) Ltd	20 611	(597,807)	-	16 756	-	-
All other segments	2 700	(1,241,963)	(19,818)	153	-	-
Total	23 311	(1,839,770)	(19,818)	16 909	-	-
Reconciling items
Fair value adjustments		(570,257)
Loss after tax		(2,410,027)
2014
	Income		Separately disclosable items
	Total other	Loss for the	Depreciation	Interest	Interest	Taxation
	income	year	and	income	expense
			amortisation
	£	£	£	£	£	£
Lace Diamond Mines (Pty) Ltd	35 597	(423,348)	-	-	-	-
All other segments	12 371	(1,142,887)	(19,818)	49	-	-
Total	47 968	(1,566,235)	(19,818)	49	-	-
Reconciling items
Fair value adjustments		(1,685,439)
Loss after tax		(3,251,674)

Notes to the Consolidated and Separate Financial Statements
3	Segmental information (continued)

Reconciliation of other income		Total	Inter-	Income from	Total	Inter-	Income from
		segment	segment	external	segment	segment	external
		income	income	customers	income	income	customers
		2015	2015	2015	2014	2014	2014
		£	£	£	£	£	£
Lace Diamond Mines (Pty) Ltd
Profit on foreign exchange transactions		15 472	-	15 472	21 309	-	21 309
Sundry income		5 139	-	5 139	14 288	-	14 288
DiamondCorp Holdings Ltd
Marketing fee		-	-	-	8 871	(8,871)	-
DiamondCorp plc
Rental income		2 700	-	2 700	3 500	-	3 500
		23 311	-	23 311	47 968	(8,871)	39 097

Segment assets and liabilities
The amounts provided to the Chief Executive Officer with respect to total assets are measured in a manner consistent with that
of the financial statements. These assets are allocated based on the operations of the segment and the physical location of
the asset.
2015
						Additions to
						non-current	Total assets
						assets
						£	£
Lace Diamond Mines (Pty) Ltd						10 049 105	26 834 984
All other segments						652 722	5 956 079
Total						10 701 827	32 791 063
2014
						Additions to
						non-current	Total assets
							assets
						£	£
Lace Diamond Mines (Pty) Ltd						9 850 018	25 359 311
All other segments						726 519	5 517 528
Total						10 576 537	30 876 839

Notes to the Consolidated and Separate Financial Statements
4	Property, plant and equipment
Group			2015			2014
		Cost /	Accumulated Carrying value		Cost /	Accumulated Carrying value
		Valuation	depreciation /		Valuation	depreciation /
			amortisation /			amortisation /
			exchange			exchange
			differences			differences
		£	£	£	£	£	£
Land & Buildings		759 506	(217 075)	542 431	941 662	(231,275)	710 387
Plant and machinery		6 259 799	(3 454 193)	2 805 606	7 202 535	(3,725,078)	3 477 457
Mining Rights		523 591	(209 439)	314 152	558 840	(195,595)	363 245
Construction in Progress		25 590 008	(1,779,787)	23 810 221	21 671 561	(2,229,101)	19 442 460
Total		33 132 904	(5 660 494)	27 472 410	30 374 598	(6,381,049)	23 993 549
Company						2014
		Cost /			Cost /	Accumulated Carrying value
		Valuation	depreciation /		Valuation	depreciation /
			amortisation /			amortisation /
			exchange			exchange
			differences			differences
		£	£	£	£	£	£
Mining Rights		396 343	(158,539)	237 804	396 343	(138,721)	257 622
Reconciliation of property, plant and equipment - Group - 2015
		Opening	Additions	Disposals	* Foreign	Depreciation	Total
		balance			exchange
					movements
		£	£	£	£	£	£
Land & Buildings		710 387	26 059	-	(151,624)	(42,391)	542 431
Plant and machinery		3 477 457	797 116	(10,099)	(642,411)	(816,457)	2 805 606
Mining Rights		363 245	-	-	(21,777)	(27,316)	314 152
Construction in Progress		19 442 460	9 878 652	(25,318)	(5,485,573)	-	23 810 221
		23 993 549	10 701 827	(35,417)	(6,301,385)	(886,164)	27 472 410
* The foreign exchange movements is due to the devaluation of 28% in the ZAR/GBP exchange rate in 2015.
Reconciliation of property, plant and equipment - Group - 2014
		Opening	Additions	Disposals	Foreign	Depreciation	Total
		balance			exchange
					movements
		£	£	£	£	£	£
Land & Buildings		671 949	113 565	-	(26,992)	(48,135)	710 387
Plant and machinery		3 542 430	732 968	(5,020)	(70,188)	(722,733)	3 477 457
Mining Rights		395 845	-	-	(4,586)	(28,014)	363 245
Construction in Progress		10 281 999	9 730 004	-	(569,543)	-	19 442 460
		14 892 223	10 576 537	(5,020)	(671,309)	(798,882)	23 993 549

Notes to the Consolidated and Separate Financial Statements
4	Property, plant and equipment (continued)
Reconciliation of property, plant and equipment - Company - 2015
		Opening	Depreciation	Total
		balance
		£	£	£
Mining Rights		257 622	(19,818)	237 804
Reconciliation of property, plant and equipment - Company - 2014
		Opening	Depreciation	Total
		balance
		£	£	£
Mining Rights		277 440	(19,818)	257 622

Plant and machinery includes mining fleet, processing plant, office equipment and motor vehicles which were previously

separately classified. The property, plant and equipment is pledged as security for the Convertible Bonds (note 16 of the

financial statements). However, once the Industrial Development Corporation of SA Limited ("IDC") loan is drawn down in

whole or in part, the Bondholders security interest in these assets will be subordinated to the security interest of the IDC

(note 17 of the financial statements).

5	Goodwill
Group			2015		2014
		Cost	Accumulated	Carrying value	Cost	Accumulated	Carrying value
			impairment			impairment
		£	£	£	£	£	£
Goodwill		2 403 483	-	2 403 483	3 069 294	-	3 069 294

The goodwill relates to the acquisition of DiamondCorp Holdings Ltd in 2006. The goodwill was previously denominated in

pounds (GBP). However, as the goodwill relates to the Lace diamond mine cash generating unit, which has a rand (ZAR)

functional currency, it is more appropriate to denominate this balance in rand (ZAR). Goodwill was therefore retrospectively

restated to reflect goodwill at a fixed ZAR 55,247,900 and retranslated to the Group presentation currency being pounds

(GBP). This restatement did not have any income statement, cash flow statement or earnings per share impact.

Group
	As previously stated 1 January 2014	As restated 1 January 2014	As previously stated 31 December 2014	As restated 31 December 2014
	£	£	£	£
Goodwill	4 606 026	3 195 164	4 606 026	3 069 294
Foreign currency translation reserve	(2,425,367)	(3,836,229)	(2,578,463)	(4,115,195)
Other Comprehensive Income			243 532	369 402

The Group tests annually for impairment, or more frequently if there are indications that goodwill might be impaired. The

Group has one reportable business segment and all goodwill is associated with that segment. The recoverable amounts of

the cash generating unit ("CGU") are determined from discounted cash flows to estimate fair value less cost to sell. The key

assumptions for the discounted cash flow calculations are those regarding the discount rates, production, resources and

expected changes to selling prices and direct costs during the year. A post tax discount rate of 15% (2014: 15%) has been

used.

Notes to the Consolidated and Separate Financial Statements

Goodwill (continued)

The Group's test for impairment is based on several considerations including a model adopted by management from the

model prepared for the Lace Mine by one of its technical advisors. This model uses grade assumptions based on the

resource statement of the Group's technical advisor and it uses diamond prices considered representative of market prices.

The model assumes that the Lace mine will reach full production of 1,200,000 tonnes per year of kimberlite in 2019 and run

through 2040. Diamond production is expected to ramp up in 2016 reaching full production in 2019 with an average grade

of 36.2 carats per hundred tonnes as indicated in the Resource Statement included in the Letter from the Chief Executive

Officer. The fair value less cost to sell valuations of the Lace Mine generated by the Model under variable sets of

assumptions as to grades, revenues and costs indicate that there has been no impairment of goodwill during the year.

Management have considered the key assumptions to be reasonable. A reasonable possible change in a key assumption

would not lead to an indicator of impairment of the cash generating unit which contains goodwill.

The 2015 key unobservable assumptions used in the valuation are:

Significant unobservable

Range of unobservable

Relationship of unobservable assumptions

assumptions

The ZAR/US$ exchange rate

ZAR 13.00 to ZAR 18.00

The higher the ZAR/US$ exchange rate, the

higher the fair value

The average US$ price per carat for

US$ 120 to US$ 200

The higher the price per carat, the higher the

diamonds

fair value

The yield of diamonds in carats per

25 carat per 100 tonnes to 40

The higher the yield per hundred tonnes, the

hundred tonnes

carat per 100 tonnes

higher the fair value

Average yearly tonnes processed in

1,000,000 tonnes to 1,400,000

The higher the average yearly tonnes, the

the processing plant

tonnes

higher the fair value

Discount rate applied (post tax)

10% to 15%

The higher the discount rate, the lower the fair

value

6.0

Investments in subsidiaries

The following table lists the entities which are controlled by the company, either directly or indirectly through subsidiaries.

Name of company

Held by

Carrying

holding

amount

and

voting

power

2015

2014

2015

2014

DiamondCorp Holdings Ltd

DiamondCorp plc

100.00%

4 217 500

- incorporated in the British Virgin Islands

Botswana DiamondCorp Ltd

DiamondCorp plc

100.00%

- incorporated in the British Virgin Islands

Lace Diamond Mines (Pty) Ltd

DiamondCorp

74.00%

74.00 %

- incorporated in South Africa

Holdings Ltd

Soapstone Investment Ltd

DiamondCorp

100.00%

455 000

- incorporated in South Africa

Holdings Ltd

DCP Exploration (Pty) Ltd

Botswana

100.00%

- incorporated in Botswana

DiamondCorp Ltd

DCP Diamonds International BVBA

DiamondCorp

100.00%

- %

- incorporated in Belgium

Holdings Ltd

4 672 501

Notes to the Consolidated and Separate Financial Statements
6	Investments in subsidiaries (continued)
Subsidiaries with material non-controlling interests
The following information is provided for subsidiaries with non-controlling interests which are material to the reporting
company.The summarised financial information is provided prior to intercompany eliminations.
		Country of	% Ownership interest held
Subsidiary		incorporation	by non-controlling interest
			2015	2014
Lace Diamond Mines (Pty) Ltd		South Africa	26%	26%
Summarised statement of financial position

			Lace Diamond Mines (Pty) Ltd
			2015	2014
			£	£
Assets
Non-current assets			25 807 092	22 980 382
Current assets			1 027 892	2 378 950
Total assets			26 834 984	25 359 332
Liabilities
Non-current liabilities			33 237 639	33 622 121
Current liabilities			1 016 101	563 287
Total liabilities			34 253 740	34 185 408
Total net liabilities			(7,418,756)	(8,826,076)
Carrying amount of non-controlling interest			(2,824,125)	(2,147,362)
Summarised statement of financial performance
			Lace Diamond Mines (Pty) Ltd
			2015	2014
			£	£
Other income and expenses			(597,807)	(423,303)
Loss before tax			(597,807)	(423,303)
Loss for the year			(597,807)	(423,303)
Total comprehensive loss			(597,897)	(771,133)
Loss allocated to non-controlling interest			(155,430)	(200,494)

Notes to the Consolidated and Separate Financial Statements
6	Investments in subsidiaries (continued)
Summarised statement of cash flows
		Lace Diamond Mines (Pty) Ltd
		2015	2014
		£	£
Cash flows used in operating activities		(47,757)	(177,599)
Cash flows used in investing activities		(7,288,860)	(7,552,003)
Cash flows from financing activities		6 196 400	7 203 248
Net (decrease) in cash and cash equivalents		(1,140,217)	(526 354)
7	Loans to group companies
		Company
		2015	2014
		£	£
Subsidiaries
DiamondCorp Holdings Ltd		30 728 532	24 231 426
		30 728 532	24 231 426
Impairment of loans to subsidiaries		(9,924,126)	(9,924,126)
		20 804 406	14 307 300
The Directors consider that the carrying amount of these assets approximates their fair value. All receivable balances are non-
interest bearing. The loan at the end of the year is in terms of agreement not repayable within the next 12 months.
Credit quality of loans to group companies
The loan is not past due. The loan does not have any published credit rating. The loan has been impaired to the extent that the
liabilities of the subsidiary exceeds its assets. The company has subordinated as much of its loan as is requested to support its
subsidiary in this position.
		Company
		2015	2014
		£	£
Non-current assets net after impairment		20 804 406	14 307 300
8	Deferred tax
Any deferred tax asset relating to the tax loss has only been recognised to the extent that there is deferred tax liabilities.
Unutilised deferred tax assets in the Group amounting to £3,742,223 (2014: £4,890,206) and in the Company amounting to
£2,755,622 (2014: £2,754,924) have not been recognised due to the uncertainty of the timing and probability of future
taxable profits that it can be utilised against. The Group's tax losses have no expiry date.

Notes to the Consolidated and Separate Financial Statements
8	Deferred tax (continued)
The unrecognised deferred tax asset comprises of:
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Capital allowances		(830,030)	509 961	15 854	12 782
Tax losses		2 587 428	2 004 922	754 942	608 455
Temporary differences (Impairment of loan)		1 984 825	2 375 323	1 984 826	2 133 687
		3 742 223	4 890 206	2 755 622	2 754 924
9	Rehabilitation deposit
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
At amortised cost:
Rehabilitation deposit		128 113	101 199	-	-
Contributions to an insurance and investment product to cover future environmental rehabilitation and closure cost. The
premiums and investment returns thereon are recognised as a rehabilitation deposit. This, together with the restricted cash
in note 12 of the financial statements, serves as security for the rehabilitation Provision in note 18 of the financial
statements.
10	Inventories
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Diamond inventories		490 288	188 827	-	-
Consumable and other inventories		137 247	266 857	-	-
		627 535	455 684	-	-
Diamond inventories at 31 December 2015 totalled 6,207.35 (2014: 2,815.12) carats. There was no write down of
inventories (2014: nil) or any reversal of inventory write downs during the year.
11	Trade and other receivables
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Trade receivables		5 091	57 636	-	-
Prepayments		57 369	128 672	-	-
VAT		308 660	462 502	-	-
		371 120	648 810	-	-
The Directors consider that the carrying amount of these assets approximates their fair value. All receivables balances are
non-interest bearing.

Notes to the Consolidated and Separate Financial Statements
11	Trade and other receivables (continued)
Trade and other receivables past due but not impaired
Trade and other receivables which are less than 3 months past due are not considered to be impaired. At 31 December
2015, £ - (2014: £ -) were past due but not impaired. Trade and other receivables are considered to be past due after three
months of outstanding balances.
The ageing of amounts past due but not impaired is as follows:
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
3 months past due		5 091	57 636	-	-
There are no external credit ratings available to assess the credit quality of trade receivables reflected above. Management
reviews the credit worthiness of all customers before entering into transactions.
12	Cash and cash equivalents
		Group		Company
		2015		2015	2014
		£	£	£	£
Cash & cash equivalents - current		1 722 486	2 531 420	1 618 259	1 054 175
Restricted cash - non-current		60 913	70 232	-	-
		1 783 399	2 601 652	1 618 259	1 054 175
The restricted cash above form the basis of a guarantee issued by the financial institution, where the cash is held, in favour
of the Department of Mineral Resources providing for the original determined cost of environmental rehabilitation and
decommissioning on termination of the Lace project.
In terms of an agreement the group's right, title and interest in and to the debit balances have been encumbered for the
benefit of the bond holders as referred to in note 16 of the financial statements.
Credit quality of cash at bank and short term deposits, excluding cash on hand
The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired
can be assessed by reference to external credit ratings (if available) or historical information about counterparty default
rates: (Also refer to note 31 of the financial statements).
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Credit rating
A-		1 658 014	1 983 275	1 618 259	1 054 175
BBB		124 145	616 505	-	-
Other		1 240	1 872	-	-
		1 783 399	2 601 652	1 618 259	1 054 175

Notes to the Consolidated and Separate Financial Statements

Share capital

AUTHORISED

DiamondCorp plc does not have an authorised share capital, in line with the provisions of the UK Companies Act 2006.

The Directors' authority to issue and allot shares in the company is set each year by Company's shareholders at the Annual

General Meeting. The level of disapplication in respect of pre-emption authority is determined by the Board, in consultation

with the Company's Nominated Adviser, and is based on UK corporate governance guidelines for AIM companies.

ISSUED

Group

Company

2015

2014

2015

2014

No.

Reconciliation of number of shares issued:

Ordinary shares of 0.1 pence each (2014: 0.1 pence)

318 365 478

276 839 478

318 365 478

276 839 478

Issue of shares - ordinary shares

92 711 102

41 526 000

92 711 102

41 526 000

Total number of ordinary shares

411 076 580

318 365 478

411 076 580

318 365 478

Reconciliation of number of shares issued:

Ordinary shares of 0.1 pence each (2014: 0.1 pence)

411 076 580

318 365 478

411 076 580

318 365 478

Deferred ordinary shares of 2.9 pence each (2014: 2.9

276 839 478

pence)

Total number of ordinary shares

687 916 058

595 204 956

687 916 058

595 204 956

- Existing ordinary shares were sub-divided into one new ordinary share of 0.1 pence each ("New Ordinary Share") and one

deferred ordinary share of 2.90 pence each (Deferred Ordinary Share).

- The New Ordinary Shares continue to carry the same rights and benefits as those attached to the Company's existing

ordinary shares (save for the reduction in nominal value). The number of New Ordinary Shares in issue following the Share

Capital Reorganisation is identical to the number of existing ordinary shares in issue immediately prior to the Share Capital

Reorganisation.

- 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 Shareholders.

- In April 2014 the Company issued 41,526,000 ordinary shares of 0.1 pence each at a price of 5 pence with gross

proceeds of £2,079,514, and transaction costs of £128,878.

- In May 2015 the Company issued 5,000,000 ordinary shares of 0.1 pence each at a price of 9 pence per share for a cash

consideration of £450,000. This was issued to Darwin Strategic Limited whom exercised their 5,000,000 warrants.

- On 8 June 2015, the Company issued 31,837,000 ordinary shares of 0.1 pence each at a price of 10 pence per share for

gross proceeds of £3,183,700, and transaction cost of £150,826.

- On 6 July 2015, the Company issued 20,894,263 ordinary shares of 0.1 pence each at a price of 10 pence per share for

gross proceeds of £2,089,426. These shares were issued in response to the Company's open offer where eligible

shareholders were able to purchase 1 open offer share for every 17 existing ordinary shares.

- On 22 December 2015, the Company issued 32,337,000 ordinary shares of 0.1 pence per share at a price of 6 pence per

share gross proceeds of £1,940,220. This was the first tranch of a two phase placing. On 4 January 2016 the Company

issued 34,329,667 ordinary shares at 0.1 pence at a price of 6 pence per share for gross proceeds of £2,059,780.

Notes to the Consolidated and Separate Financial Statements
13	Share capital (continued)
- On 22 December 2015, the Company issued 2,642,839 ordinary shares of 0.1 pence each at a price of 5.6 pence per
share. This was in response to bondholder converting his bonds.
			Group		Company
			2015	2014	2015	2014
			£	£	£	£
Issued
Ordinary shares of 0.1 pence each (2014: 0.1 pence)			411 076	318 365	411 076	318 365
Deferred ordinary shares of 2.9 pence each (2014: 2.9			8 028 345	8 028 345	8 028 345	8 028 345
pence)
Share premium at shares of 5 pence and 3.5 pence			36 186 925	28 814 957	36 186 925	28 814 957
each (2014: 5 pence and 3.5 pence)
			44 626 346	37 161 667	44 626 346	37 161 667
14	Share based payments
Equity-settled share option scheme
The Company has a share option scheme for all employees of the Group. Options are exercisable at a price equal to the
average quoted market price of the Company's shares on the date of grant. If the options remain unexercised after a period
of ten years from the date of grant the options expire. Options are generally forfeited if the employee leaves the Group
before the options vest.
`
Details of the share options outstanding during the year are as follows.					2015 Number	2014 Number
Outstanding at the beginning of the year					12 845 000	8 345 000
Granted during the year					-	4 500 000
Forfeited during the year					50 000	-
Exercised during the year					-	-
Expired during the year					-	-
Outstanding at the end of the year					12 795 000	12 845 000
Exercisable at the end of the year					12 795 000	12 845 000
At 31 December 2015, 12,795,000 (2014: 12,845,000) options were outstanding at a weighted average exercise price of
13.2 pence (2014: 13 pence), and a weighted average remaining contractual life of 5.25 years (2014: 6.25 years).
During 2015, the Group recognised an expense of £29,788 (2014: £5,899) relating to equity-settled share-based payment
transactions.
Black-Scholes Assumptions		2014 Option	2013 Option	2010 Option	2007 UK	The
		Plan	Plan	Plan	Option Plan	DiamondCorp
						Share Option
						Plan
Vesting period		3 Years	5 Years	3 Years	3 Years	3 Years
Expected dividend yield		Nil	Nil	Nil	Nil	Nil
Risk free interest rate		1,961%	5%	2%	5%	2%
Share price volatility		32%	90%	50%	40%	40%
Share price at time of grant		7 pence	5 pence	6.88 pence	90 pence	34.5 pence

Notes to the Consolidated and Separate Financial Statements

14	Share based payments (continued)

2007 UK Options ("2007 Plan")

During 2007, options over 2,940,000 ordinary shares of 3 pence each were granted to employees and management of the
Company, exercisable at 135 pence for a period of 10 years from the date of issue.
270,000 of these options vested on grant date and the balance vest over 3 years at one-third at each anniversary of the
issue date. 690,000 of these options were forfeited during 2008 by reason of retirement and 120,000 options were forfeited
in 2009.
Share options granted during the year ended 31 December 2007 were valued by the Directors using the Black-Scholes
valuation model, based upon the assumptions as detailed in the table above.
At 31 December 2015, 2,130,000 options were outstanding under this plan (2014 - 2,130,000).

The DiamondCorp Share Option Plan ("DCP Plan")

During 2008, a share option plan was approved and registered in the Republic of South Africa to provide eligible employees
of the Group with the opportunity to acquire as an incentive an interest in the equity of the Company. Eligible employees
were granted options over 695,000 ordinary shares of 3 pence each, exercisable at 50 pence for a period of 10 years from
the date of issue, 16 December 2008. These options vest over 3 years at one-third at each anniversary of the issue date.
During 2009, a further 200,000 options were granted under this plan and 340,000 options were forfeited.
These options were valued by the Directors using the Black-Scholes valuation model, based upon the assumptions as
detailed in the table above.
In August 2010, the exercise price of these options was adjusted to 21 pence. All other conditions remain unchanged.
At 31 December 2015, the number of options outstanding under this plan was 555,000 (2014 - 555,000).

2010 Option Plan ("2010 Plan")

During 2010, options over 4,570,000 ordinary shares of 3 pence each were granted to employees and management of the
Company, exercisable at 12 pence each for a period of 10 years from the date of issue. These options vest over 3 years at
one third on each anniversary of the date of issue, subject to the share price of the Company attaining and trading at or
above 17 pence for a period of 3 consecutive months.
These options were valued by the Directors using the Black-Scholes valuation model, based upon the assumptions as
detailed above.
During the year ended 31 December 2010, 660,000 options expired.
During the year ended 31 December 2011, 250,000 options expired.
During 2012 the exercise price of these options was adjusted to 5 pence. All other conditions remain unchanged.
At 31 December 2015, 3,660,000 options were outstanding under this plan (2014 - 3,660,000).

Notes to the Consolidated and Separate Financial Statements

14	Share based payments (continued)

2013 Option Plan ("2013 Plan")
During 2013, options over 2,000,000 ordinary shares of 0.10 pence each were granted to Mr. E A Worthington, exercisable
at a price of 5 pence each for a period of 5 years from the date of issue. The 2,000,000 options vest immediately.
These options were valued by the Directors using the Black-Scholes valuation model, based upon the assumptions as
detailed above.
At 31 December 2015, 2,000,000 options were outstanding under this plan (2014 - 2,000,000).

2014 Option Plan - Amended 2007 option plan

During 2014, options over 4,500,000 ordinary shares of 0.1 pence were granted to employees and management of the
Company, exercisable at 8.5 pence for a period of 10 years from the date of issue.
All these options vest over 3 years at one-third at each anniversary of the issue date, and no options vested in 2015.
Share options granted during the year ended 31 December 2014 were valued by the Directors using the Black-Scholes
valuation model, based upon the assumptions detailed in the table above.
At 31 December 2015, 4,450,000 options were outstanding under this plan (2014 - 4,500,000).

15	Warrant Reserve
GROUP AND COMPANY		Warrants in	Warrant
		issue	reserve
			£
Outstanding at 31 December 2015		-	-
GROUP AND COMPANY		Warrants in	Warrant
		issue	reserve
			£
Outstanding at 31 December 2014		5 000 000	79 192

Darwin Warrants

In respect of agreeing to provide a standby equity finance facility of up to £10,000,000 which could be drawn upon at the
Company's discretion during a period of 36 months ending on 18 October 2015, the Company grants 5,000,000 warrants to
Darwin Strategic Limited, a unit of Henderson Global Investors, which are exercisable at 9 pence on or before 18 October
2015. During May 2015 Darwin Strategic Limited exercised their right to convert the warrant at 9 pence.
The warrants were exercised during the financial year.
These warrants were valued by the Directors using the Black-Scholes valuation model, based on the assumptions as
detailed below.

Notes to the Consolidated and Separate Financial Statements
15	Warrant Reserve (continued)
Black-Scholes Assumptions					Darwin
					Warrants
Term range					3 years
Expected dividend yield					Nil
Risk free interest rate					1.68%
Share price volatility					90.09%
Share price at time of grant					4 pence
Exercise price					9 pence
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Warrant Reserve - End of the year		-	79 192	-	79 192
16.0	Compound instruments
The compound instruments have been split in a debt component and derivative as presented below:
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
At amortised cost
Current liabilities		2 684 835	2 811 742	1 363 050	1 234 488
		2 684 835	2 811 742	1 363 050	1 234 488
At fair value through profit or loss
Derivative financial instruments		3 596 870	3 730 434	1 480 203	1 409 446
		3 596 870	3 730 434	1 480 203	1 409 446
UK Bonds
On 14 December 2012, the Company, issued £1,410,000 14% senior secured bonds (the "UK Bonds") to investors in the
United Kingdom. The proceeds of the UK Bonds was held in escrow and released from escrow upon completion of a loan
agreement between DiamondCorp Holdings Ltd, an associated company, and Laurelton Diamonds Inc. The UK Bonds are
due for repayment 14 December 2018 with interest payable quarterly in arrears, with the first 24 months of interest on the
UK Bonds to be accumulated and added to the principal amount to be repaid. Bondholders can request conversion of the
UK Bonds and outstanding interest at any time after 24 January 2013. Any request for conversion can be settled at the
absolute discretion of the Company with ordinary shares at 5.80 pence per share or the cash equivalent of the number of
underlying shares multiplied by the share price at the time of conversion. The UK Bonds are secured by the assets of the
Company and have a reversionary interest in the assets of Lace Diamond Mines (Pty) Ltd. £250,000 of the UK Bonds were
taken up by directors of the Company or other related parties (see note 28 of the financial statements).

Notes to the Consolidated and Separate Financial Statements
16	Compound instruments (continued)
SA Bonds
On 14 December 2012, Soapstone Investment Ltd ("Soapstone"), wholly-owned subsidiary of the Company, issued
ZAR40,000,000 (£2,868,864 at spot rate on 14 December 2012) 14% senior secured bonds (the "SA Bonds") to investors in
South Africa. The proceeds of the SA Bonds was held in escrow and released from escrow upon completion of a loan
agreement between DiamondCorp Holdings Ltd, a subsidiary company, and Laurelton Diamonds Inc. The SA Bonds are
due for repayment 14 December 2018 with interest payable quarterly in arrears, the first payment being 14 March 2013.
The first two years of interest will be held in escrow to be paid on the quarterly interest dates. Bondholders can request
conversion of the SA Bonds and outstanding interest at any time after 24 January 2013. Any request for conversion can be
settled at the absolute discretion of the Company with ordinary shares at ZAR 0.81 per share or the cash equivalent of the
number of underlying shares multiplied by the share price at the time of conversion. The SA Bonds are secured by the
assets of Soapstone Investment Ltd and have a reversionary interest in the assets of Lace Diamond Mines (Pty) Ltd. The
SA Bond is also secured by way of a financial guarantee provided by DiamondCorp plc. The SA Bonds is further secured as
indicated in note 4 of the financial statements.
Fair Value
Refer to note 36 of the financial statements for the valuation techniques and assumptions applied for the purposes of
measuring fair value.
17	Other financial liabilities
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
At fair value through profit or loss
Financial guarantee contract		-		455 000	455 000
Held at amortised cost
Loan from the Industrial Development Corporation of		11 790 454	13 442 518	-	-
SA Limited
Loan from Laurelton Diamonds Inc.		5 184 061	4 530 325	-	-
Total financial liabilities		16 974 515	17 972 843	455 000	455 000
IDC Loan
On 20 September 2012, Lace Diamond Mines (Pty) Ltd ("Lace"), a 74% owned subsidiary of the Company, entered into an
agreement with the Industrial Development Corporation of SA Limited ("IDC") whereby IDC will provide a project loan facility
of ZAR 220,000,000. The initial term of the loan was 7 years from the initial drawdown date which was 14 August 2013 with
an interest rate of South Africa Prime Rate + 2%. Interest was capitalised for two years, subject to a maximum of ZAR
20,141,000 and thereafter is payable bi-annually in arrears. The loan was repayable in 10 bi-annual payments of ZAR
24,014,000 commencing on the date that is 2 years after the initial drawdown date and every six months thereafter. The
loan was fully drawn in July 2014, and all interest was capitalised during the year. In December 2015 the IDC agreed to
capitalise the interest on the loan for a further 12 months against the outstanding balance. The terms of the agreement
were amended. The term of the loan is extended to 8 years with an amended interest rate of South Africa prime plus 3.2%.
Interest will be capitalised to a maximum of ZAR44,633,117 repayable in equal quarterly instalments, the first of which will
be 1 February 2017. The IDC Loan is secured by a general charge over the assets of Lace. In addition there is a cession
in favour of IDC of shares held by Lace's shareholders and of loans to Lace by shareholders and associated companies.
The initial drawdown was conditional on ZAR 100,000,000 having been advanced to Lace by shareholders and associated
companies after 20 September 2012.

Notes to the Consolidated and Separate Financial Statements
17	Other financial liabilities (continued)
from Laurelton Diamonds Inc
On 4 January 2013 DiamondCorp Holdings Ltd, a wholly-owned subsidiary of the Company, entered into an agreement with
Laurelton Diamonds Inc ("Laurelton") whereby Laurelton would provide a Lace project loan facility of $6,000,000 in total.
The terms of the loan are 8 years, an interest rate of 9% per annum. Interest from the initial drawdown date would be
capitalised for 3 years and the interest accrued added to the loan balance. The loan is repayable in 30 quarterly payments
of $463,298 commencing on the date 3 years after the initial drawdown date and every quarter thereafter. This loan is
further secured by a guarantee from DiamondCorp plc and a third ranking bond over the assets of Lace Diamond Mines
(Pty) Ltd.
Based on expectations at the end of the reporting year, the Company considers that it is more likely than not that no
amount will be payable under the arrangement. However, this estimate is subject to change depending on the probability of
the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the
counterparty which are guaranteed suffer credit losses.
Financial Guarantee Contract
DiamondCorp plc has provided a financial guarantee to the Bondholders of the SA Bond, guaranteeing any amounts due
under the SA Bond agreement by its wholly-owned subsidiary, Soapstone Investment Ltd. This financial guarantee meets
the definition of a financial guarantee contract under IAS 39, Financial Instruments: Recognition and Measurement. In
accordance with IAS 39, the financial guarantee contract must be recognised initially at fair value. The fair value of the
financial guarantee contract has been determined to be £455,000 and this amount has been recorded as a financial liability
on the Company's balance sheet, with a corresponding increase in the cost of its investment balance.
Based on expectations at the end of the reporting year, the Company considers that it is more likely than not that no
amount will be payable under the arrangement. However, this estimate is subject to change depending on the probability of
the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the
counterparty which are guaranteed suffer credit losses.
The maximum exposure of the company under this guarantee is £455,000 (2014: £455,000) as recognised as a liability in
the company stand-alone financial statements.
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Non-current liabilities
Fair value through profit or loss		-	-	455 000	455 000
At amortised cost		16 974 515	17 972 843	-	-
		16 974 515	17 972 843	455 000	455 000
18	Provisions
Reconciliation of provisions - Group - 2015
		Opening	Additions	Exchange	Closing
		balance		differences	balance
		£	£	£	£
Rehabilitation provision		581 756	93 394	(156,849)	518 301

Notes to the Consolidated and Separate Financial Statements
18		Provisions (continued)
Reconciliation of provisions - Group - 2014
			Opening	Additions	Exchange	Closing
			balance		differences	balance
			£	£	£	£
Rehabilitation provision			528 828	74 368	(21,440)	581 756
A provision is recognised for the site restoration and decommissioning of current mining activities based on current
environmental and regulatory requirements. The additions of £93,394 (2014: £74,368) have been capitalised to construction
in progress (mine development costs).
19		Trade and other payables
			Group		Company
			2015	2014	2015	2014
			£	£	£	£
Trade payables			1 363 512	263 309	627 945	18 955
Accrued leave pay			81 596	82 346	-	-
			1 445 108	318 655	627 945	18 955
The Directors consider that the carrying amount of these liabilities approximate their fair value. All payable balances are
non-interest bearing.
20	Operating loss
Operating loss for the year is stated after accounting for the following:
			Group		Company
			2015	2014	2015	2014
			£	£	£	£
Other income
Gain on foreign exchange transactions			15 472	21 309	-	-
Sundry income			-	14 288	-	-
Office rental income			2 700	3 500	2 700	3 500
Profit on sale of non-current asset			5 139	-	-	-
			23 311	39 097	2 700	3 500
Operating lease charges
Premises
Contractual amounts			62 454	61 526	62 454	61 526

Notes to the Consolidated and Separate Financial Statements
20	Operating loss (continued)
			Group		Company
			2015	2014	2015	2014
			£	£	£	£
Share based payment expense			29 788	5 899	29 788	5 899
Reversal of impairment on loans to group companies			-	-	-	(230,460)
Loss on exchange differences			168 197	285 060	-	-
Depreciation on property, plant and equipment (not			19 818	19 818	19 818	19 818
capitalised)
General and administrative expenses			599 942	254 269	526 544	225 713
Employee costs			932 662	913 606	149 811	200 770
Auditors' remuneration			67 129	65 203	27 600	35 704
Attributable depreciation costs of £866,346 (2014: £779,064) were capitalised to mine development cost.
21		Employee cost
Employee costs including Directors' emoluments of the Group and Company were:
			Group		Company
			2015	2014	2015	2014
			£	£	£	£
Wages and salaries			765 209	756 996	129 976	183 819
Social security costs			19 835	16 951	19 835	16 951
Other pension and medical aid costs			147 618	139 659	-	-
Share-based payment			29 788	5 899	29 788	5 899
			962 450	919 505	179 599	206 669
Additional attributable payroll costs of £2,475,807 were capitalised to mine development cost (2014: £2,033,557).
Average monthly number of persons employed during the year was:
			Group		Company
			2015	2014	2015	2014
			No.	No.	No.	No.
			£	£	£	£
Administration			13	11	2	2
Operational			249	234	-	-
			262	245	2	2

Notes to the Consolidated and Separate Financial Statements
22	Finance costs
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Effective interest cost on Bonds		-	-	151 308	253 466
Borrowing costs for the Group capitalised to qualifying assets (mine development) are disclosed as below:

Reconciliation of Group finance cost capitalised - 2015			Finance cost	Capitalised	Total as per
					Income
					Statement
			2015	2015	2015
			£	£	£
IDC interest			1 489 551	(1,489,551)	-
Soapstone Investment Ltd interest			382 394	(382,394)	-
Laurelton interest			414 990	(414,990)	-
Effective interest cost on bonds			539 776	(539 776	-
			2 826 711	(2 826 711)	-

Reconciliation of Group finance cost capitalised - 2014			Finance cost	Capitalised	Total as per
					Income
					Statement
			2014	2014	2014
			£	£	£
IDC interest			1 117 097	(1,117,097)	-
Soapstone Investment Ltd interest			317 632	(317,632)	-
Laurelton interest			357 445	(357,445)	-
Effective interest cost on bonds			649 900	(649,900)	-
			2 442 074	(2,442,074)	-
23	Taxation
There was no tax expense during the year.
Reconciliation
Reconciliation between accounting loss and tax expense.
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Accounting loss		(2,410,027)	(3,251,674)	(1,182,212)	(1,248,254)
Tax at the applicable weighted UK tax rate of 20%		(482,005)	(650,335)	(236,442)	(249,651)
(2014: 20%)
Tax effect of adjustments on taxable income
Expenses not tax deductible		174 402	424 438	43 540	135 873
Deferred tax not recognised		(4,944,155)	(4,967,297)	(2,562,720)	(2,648,274)
Effect of different tax rates		359 093	249 039	-	199 332
Tax losses carried forward		4 892 665	4 944 155	2 755 622	2 562 720
		-	-	-	-

Notes to the Consolidated and Separate Financial Statements
23	Taxation (continued)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.
Factors affecting future tax charges The main UK corporation tax rate was reduced from 21% to 20% with effect from 1 April 2015. Further reductions in the applicable rate of corporation tax to 19% with effect from 1 April 2017 and to 18% with effect from 1 April 2020 were enacted on 26 October 2015. On the basis the Company does not have any recognised deferred tax assets or liabilities at the balance sheet date, no re-measurement of these balances is necessary.

24	Auditors' remuneration
			Group		Company
			2015	2014	2015	2014
			£	£	£	£
Fees payable to the Company's auditors and it's			27 600	35 704	27 600	35 704
associates for the audit of parent company and
consolidated financial statements
Fees payable to the Company's auditors and its
associates for audit services:
- The audit of company's subsidiaries			39 529	29 499	-	-
Total auditors' remuneration			67 129	65 203	27 600	35 704
There were no non-audit services in 2015 (2014: nil).
25	Other comprehensive loss for the year
Components of other comprehensive loss - Group - 2015
		Gross	Tax	Net before	Non-	Net
				non-	controlling
				controlling	interest
				interest
		£	£	£	£	£
Items that may be reclassified to
profit or loss
Exchange differences on translating
foreign operations
Exchange differences arising during the		(2,895,221)	-	(2,895,221)	521 333	(2,373,888)
year
Components of other comprehensive loss - Group - 2014
		Gross	Tax	Net before	Non-	Net
				non-	controlling
				controlling	interest
				interest
		£	£	£	£	£
Items that may be reclassified to
profit or loss
Exchange differences on translating
foreign operations
Exchange differences arising during the		(369,402)	-	(369,402)	90 436	(278,966)

Notes to the Consolidated and Separate Financial Statements
26	Loss per share
Basic loss per share
Basic loss per share is determined by dividing loss attributable to the owners of the parent by the weighted average number
of ordinary shares outstanding during the year.
		Group
		2015	2014
		£	£
Basic loss per share
From continuing operations (pence per share)		(0.64)	(1.02)

Basic loss per share was based on loss of £ 2,254,597 (2014: £ 3,141,615) and a weighted average number of ordinary
shares of 352,438,990 (2014: 307,671,111).

Reconciliation of loss for the year to basic loss
Loss for the year attributable to equity holders of the		(2,254,597)	(3,141,615)
parent

Diluted loss per share
International Accounting Standard 33 requires presentation of diluted loss per share when a company could be called upon
to issue shares that would decrease the net profit or increase the net loss per share. The calculation of diluted loss per
share does not assume conversion, exercise, or other issue of potential ordinary shares that would increase the net profit or
decrease the net loss per share. As the Group is currently in a loss-making position then the inclusion of the potential
ordinary shares associated with share options or the convertible bonds in the diluted loss per share calculation would serve
to decrease the net loss per share. On that basis, no adjustment has been made for diluted loss per share.
Headline loss per share
The Group presents an alternative measure, as required by the JSE listing requirements, of loss per share after excluding
all capital gains and losses from the loss attributable to ordinary shareholders. Due to there being no adjustments headline
loss per share and basic loss per share is the same.

		Group
		2015	2014
		£	£
Headline loss per share (pence)		(0.64)	(1.02)

Notes to the Consolidated and Separate Financial Statements
27	Cash used in operations
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Loss before taxation		(2,410,027)	(3,251,674)	(1,182,212)	(1,248,254)
Adjustments for:
Depreciation (not capitalised)		19 818	19 818	19 818	19 818
Profit on sale of assets		(5,139)	-	-	-
Loss on foreign exchange		152 455	306 369	-	-
Interest received - investment		(16,909)	(49)	(110)	(49)
Finance costs			-	151 308	253 466
Fair value adjustments		570 257	1 685 439	217 699	679 367
Impairment loss			-	-	(230,460)
Movements in provisions		(63,455)	52 928	-	-
Share option expense		29 788	5 899	29 788	5 899
Other non-cash loss			3 619	-	-
Adjustment for warrant reserve		(79,192)	(12,808)	(79,192)	(12,808)
Changes in working capital:
Inventories		(171,851)	101 401	-	-
Trade and other receivables		277 690	232 180	-	-
Trade and other payables		1 141 925	(22,951)	608 990	(27,625)
		(554,640)	(879,829)	(233,911)	(560,646)
28	Related parties
`
Relationships
Subsidiaries		Refer to note 6
Directors		Refer to directors' report
Company of which Mr. P R Loudon		Gelndree Capital Management Limited
Company of which Mr. P R Loudon and Dr. J Willis-Richards are directors		Loeb Aron & Company Limited
Company of which Mr. M Toxvaerd is a director		European Islamic Investment Bank plc
Company of which Mr. H Scholes is a director		Malan Scholes Attorneys
Related party balances
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Loan accounts - Owing (to) by related parties
DiamondCorp Holdings Ltd (before impairment			-	30 728 532	24 231 426
provision)
Bonds held by related parties
Loeb Aron & Company Limited		60 000	60 000	60 000	60 000
Mr. E A Worthington		100 000	100 000	100 000	100 000
Mr. P R Loudon		100 000	100 000	100 000	100 000
Financial Guarantees to bondholders of
Soapstone Investment Ltd			-	455 000	455 000

Notes to the Consolidated and Separate Financial Statements
28	Related parties (continued)
Related party transactions
					Group		Company
					2015	2014	2015	2014
					£	£	£	£
Directors Remuneration paid to related parties
Glendree Capital Management Limited					134 190	129 114	134 190	129 114
European Islamic Investment Bank plc					15 000	15 000	15 000	15 000
Legal Fees paid to related parties
Malan Scholes Attorneys					12 747	-	6 744	-
29	Directors' emoluments
Executive and Non-executive
2015
				Medical and	Fees paid to	Bonuses	Share based	Total
			Medical and	pension	third party		payments
				benefit
			£	£	£	£	£	£
Mr. E A Worthington (Chairman) *			90 000	-	-	-	2 678	92 678
Mr. R N Allen **			15 000	-	-	-	2 008	17 008
Mr. P R Loudon *			45 810	4 487	134 190	-	5 355	189 842
Dr. J Willis-Richards **			15 000	-	-	-	2 008	17 008
Mr. M Toxvaerd **			-	-	15 000	-	2 008	17 008
Mr. H Scholes **			12 000	-	-	-	2 008	14 008
			177 810	4 487	149 190	-	16 065	347 552
2014
			Emoluments	Medical and	Fees paid to	Bonuses	Share based	Total
				pension	third party		payments
				benefit
			£	£	£	£	£	£
Mr. E A Worthington (Chairman) *			90 000	-	-	-	524	90 524
Mr. R N Allen **			15 000	-	-	-	393	15 393
Mr. P R Loudon *			50 886	4 904	129 114	-	1 049	185 953
Dr. J Willis-Richards **			15 000	-	-	-	393	15 393
Mr. M Toxvaerd **			-	-	15 000	-	393	15 393
Mr. H Scholes **			16 000	-	-	-	393	16 393
			186 886	4 904	144 114	-	3 145	339 049
Indicator		Type of Director
*		Executive
**		Non-executive

Notes to the Consolidated and Separate Financial Statements
30	Compensation to key personnel
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Short term employee benefits		271 775	264 111	-	-
Contribution to pension fund		17 429	18 355	-	-
Share based payment		9 929	1 966	-	-
		299 133	284 432	-	-
The key personnel included in these amounts are Mr. S West, Chief Operating Officer, Mrs. S De Wet, Chief Financial
Officer and Mr. A Labuschagne, Lace Mine Manager. All directors are regarded as key personnel. Their salaries are not
included above, refer to note 29 for their remuneration.
31	Risk management

Capital risk management

The group's objectives when managing capital are to safeguard the group's ability to continue as a going concern in order
to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
The capital structure of the group consists of debt, which includes the borrowings (excluding derivative financial liabilities)
disclosed in notes 7, 16, 17 & 35, cash and cash equivalents disclosed in note 12, and equity attributable to owners of the
parent, comprising issued capital, reserves and retained earnings. The Group is not subject to any externally imposed
capital requirements.
The Group reviews the capital structure on a regular basis. As part of this review the Directors consider the cost of capital
and the risks associated with each class of capital. In order to maintain or adjust the capital structure, the group may adjust
the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce
debt.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 1 to the financial statements.

Categories of financial instruments

The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the
financial statements approximate their fair values.
There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally
imposed capital requirements from the previous year.

Notes to the Consolidated and Separate Financial Statements
31	Risk management (continued)
Categories of financial instruments (continued)
		Group	Group	Company	Company
		Carrying	Carrying	Carrying	Carrying
		amount	amount	amount	amount
		2015	2014	2015	2014
		£	£	£	£
FINANCIAL ASSETS
Loans and receivables (Including cash and cash		2 093 606	3 180 230	22 422 665	15 361 475
equivalents)
FINANCIAL LIABILITIES
Amortised cost		21 104 458	21 103 241	1 990 995	1 253 443
Financial guarantee contracts		-	-	455 000	455 000
Derivative instruments designated as fair value through		3 596 870	3 730 434	1 480 203	1 409 446
profit and loss (FVTPL)
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the
financial statements approximate their fair values.
Valuation techniques and assumptions applied for the purposes of measuring fair value
The fair values of derivative instruments are calculated using quoted prices. Where such prices are not available, a
discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-
optional derivatives, and option pricing models for optional derivatives. The fair value of the embedded derivative
component of the convertible bonds (as per note 16 of the financial statements) was determined using the Black Scholes
(using the Barone-Adesi and Whaley approximation technique) option pricing model. The table below outlines the fair value
inputs used in the embedded derivative valuation.
Black-Scholes Assumptions				31 December	31 December
				2015	2014
Term range				5 years	5 years
Expected dividend yield				Nil	Nil
Risk free interest rate				1.96%	1.68%
Share price volatility				90.70%	90.09%
Share price at time of valuation				6.8 pence	7.4 pence
Financial risk management objectives
The Group's financial function provides services to the business, monitors and manages the financial risks relating to the
operations of the Group. These risks include market risk (including currency risk, fair value interest rate risk, cash flow
interest rate risk and price risk), credit risk and liquidity risk.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for any purpose.
Credit risk management
The Group and Company's principal financial assets are bank balances and cash. The credit risk on liquid funds is limited
because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. Management
reviews the credit worthiness of all customers before entering into a transaction.

Notes to the Consolidated and Separate Financial Statements
31	Risk management (continued)
Credit risk management (continued)
The Company transacts with the following financial institutions:
Financial Institution			External
			credit rating
Barclays			A-
ABSA			A-
KBC Bank			A-
Standard Bank			BBB
First National Bank			BBB
Rand Merchant Bank			BBB
The Company also holds amounts receivable from related parties as disclosed in note 28 of the financial statements.
Management reviews the credit worthiness of all balances due from related parties with reference to future profitability.
Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade receivables. The
company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-
party.
Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these
ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking
into account its financial position, past experience and other factors. Individual risk limits are set based on internal or
external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.
Market risk
The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates. There has
been no change to the Group's exposure to market risks or the manner in which it is measured and managed.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise.
The carrying amounts of the Group's and Company's foreign currency denominated monetary assets and monetary
liabilities at the reporting date are as follows:
		Assets		Assets
		(Liabilities)		(Liabilities)
		2015		2014
		£		£
Cash denominated in South African Rand		618 302		1 106 488
Loan denominated in South African Rand		(11,790,454)		(13,442,518)
Cash denominated in United States Dollar		7 027		433 355
Loan denominated in United States Dollar		(5,184,061)		(4,530,325)
		(16,349,186)		(16,433,000)

Notes to the Consolidated and Separate Financial Statements
31	Risk management (continued)
Foreign currency sensitivity analysis
The Group is exposed to the currency of South Africa (ZAR) and the United States Dollar.
The following table details the Group's sensitivity to a 20% increase and decrease in the Great British Pound against South
African Rand and United States Dollar. 20% is the sensitivity rate used when reporting foreign currency risk internally to key
management personnel and represents management's assessment of the reasonably possible change in foreign exchange
rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their
translation at the year-end for a 20% change in foreign currency rates. A negative number below indicates a decrease in
profit where the Great British Pound strengthens 20% against the relevant currency. For a 20% weakening of the Great
British Pound against the relevant currency, there would be an equal and opposite impact on the profit and the balances
below would be positive.
ZAR Currency Impact						2015	2014
						£	£
Gain due to a 20% depreciation of the ZAR						2 234 430	2 467 206
Loss due to a 20% appreciation of the ZAR						(2,234,430)	(2,467,206)
USD Currency Impact						2015	2014
						£	£
Gain due to a 20% depreciation of the USD						1 035 407	819 394
Loss due to a 20% appreciation of the USD						(1,035,407)	(819,394)
The Group's sensitivity to foreign currency has increased during the current year, because the Company held higher
balances of foreign currency. However, the Group's South African Rand deposits are held at a subsidiary level in South
Africa and as such this sensitivity analysis does not represent a real cash foreign exchange risk to the Group.
In management's opinion, the impact of the sensitivity analysis is representative of the inherent foreign exchange risk.
Liquidity and interest risk tables
The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities. The tables
have been drawn up on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group
can be required to pay. The table includes the principal cash flows all of which are due within less than one year and more
than one year.
In respect of the financial liability and the financial guarantee contract liability (Company only), the terms on which those
instruments might be required to be settled are outlined in note 17 of the financial statements.
LIABILITIES
GROUP		Weighted	Less than 1	More than 1	Weighted	Less than 1	More than 1
		average	year	year	average	year	year
		effective			effective
		interest rate			interest rate
		2015	2015	2015	2014	2014	2014
		%	£	£	%	£	£
Non-interest bearing		- %	3 596 870	-	- %	4 049 090	-
Fixed interest rate instruments		12.0 %	3 007 015	21 881 454	13.0 %	3 177 268	26 150 487

Notes to the Consolidated and Separate Financial Statements
31	Risk management (continued)
Liquidity and interest risk tables (continued)
LIABILITIES (continued)
COMPANY		Weighted	Less than 1	More than 1	Weighted	Less than 1	More than 1
		average	year	year	average	year	year
		effective			effective
		interest rate			interest rate
		2015	2015	2015	2014	2014	2014
		%	£	£	%	£	£
Non-interest bearing		- %	2 108 141	-	- %	1 428 401	-
Fixed interest rate instruments		14.0 %	1 553 877	-	23.0 %	1 518 420	-
Financial guarantee contract		- %	-	455 000	- %	-	455 000
LIQUIDITY RISK MANAGEMENT
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity
risk management framework for the management of the Group's short term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group expects to ramp up to
full production in the second half of 2016 and this will contribute to the Group cash flows.
The following table details the Group's and Company's expected maturity for its non-derivative financial assets. The tables
below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that
will be earned on those assets.
ASSETS
GROUP		Weighted	Less than 1	More than 1	Weighted	Less than 1	More than 1
		average	year	year	average	year	year
		effective			effective
		interest rate			interest rate
		2015	2015	2015	2014	2014	2014
		%	£	£	%	£	£
Non-interest bearing		- %	371 120	128 113	- %	648 810	101 199
Interest bearing		1.0 %	1 728 402	54 997	4.0 %	2 531 420	70 232
COMPANY		Weighted	Less than 1	More than 1	Weighted	Less than 1	More than 1
		average	year	year	average	year	year
		effective			effective
		interest rate			interest rate
		2015	2015	2015	2014	2014	2014
		%	£	£	%	£	£
Non-interest bearing		- %	-	20 790 116	- %	-	14 307 300
Interest bearing		- %	1 618 259	-	- %	1 054 175	-

Notes to the Consolidated and Separate Financial Statements
31	Risk management (continued)
INTEREST RATE RISK MANAGEMENT
The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest
rates. The risk is managed by the Group by maintaining an approximate mix between fixed and floating rate borrowings.
The Group's exposure to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.
Based on simulations performed, the recalculated impact on net profit after tax of a 2% shift in the prime interest rate of
South Africa would be a maximum increase of £ 268,850.
32	Going concern
In determining the appropriate basis of presentation of the financial statements, the Directors are required to consider
whether the Group can continue existence of the foreseeable future, this being a period of not less than 12 months from the
date of the approval of the financial statements. The Group's business activities and goals are set out in the Letters from
the Chairman and Chief Executive.
For the year ended 31 December 2015 the Group incurred a loss of £2,410,027 (2014: £3,251,674 loss).
After reviewing the existing cash resources, facilities and Life of Mine model and the ongoing ramp up of production the Directors have a reasonable expectation that the Group can meet all its liabilities as they fall due,
therefore they continue to adopt the going concern basis of presentation of the financial statements. (Refer 1.3 Going concern)
33	Contingent liabilities
A claim was submitted by Acrux Resources (Pty) Ltd against Lace Diamond Mines (Pty) Ltd for an amount of £207,229
plus interest during the financial year. The claim submitted is for the structuring fee of a terminated contract between Acrux
Resources (Pty) Ltd and Lace Diamond Mines (Pty) Ltd. The claim is disputed by Lace Diamond Mines (Pty) Ltd and
management is of the opinion that the claim will be unsuccessful. Management anticipates that the outcome of the claim
will only be resolved in 2017.
34	Events after the reporting year
On 4 January 2016, the Company issued 34,329,667 ordinary shares of 0.1 pence each at a price of 6 pence per share for
gross proceeds of £2,059,780.
35	Operating lease
		Group		Company
		2015	2014	2015	2014
		£	£	£	£
Minimum lease payments due
- within one year		41 677	50 012	41 677	50 012
- in second to fifth year inclusive		-	41 677	-	41 677
Present value of minimum lease payments		41 677	91 689	41 677	91 689
The operating lease on the premises expires in October 2016.

Notes to the Consolidated and Separate Financial Statements
36	Fair value information
Fair value hierarchy
The table below analyses assets and liabilities carried at fair value. The different levels are defined as follows:
Level 1: Quoted unadjusted prices in active markets for identical assets or liabilities that the group can access at
measurement date.
Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or
indirectly.
Level 3: Unobservable inputs for the asset or liability.
Levels of fair value measurements
Level 3
			Group		Company
			2015	2015	2015	2014
			£	£	£	£
Liabilities		Note 17
Financial liabilities at fair value through profit or
loss
Derivative financial instruments			3 596 870	3 730 434	1 480 203	1 409 446
Financial guarantees			-	-	455 000	455 000
Total			3 596 870	3 730 434	1 935 203	1 864 446
Transfers of assets and liabilities within levels of the fair value hierarchy
No transfers were made between levels in the fair value hierarchy in the 2014 or 2015 financial years.
Valuation techniques used to derive level 3 fair values
Valuation techniques and assumptions applied for the purposes of measuring fair value
The fair values of derivative instruments are calculated using quoted prices. Where such prices are not available, a
discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-
optional derivatives, and option pricing models for optional derivatives. The fair value of the embedded derivative
component of the convertible bonds was determined using the Black Scholes (using the Barone-Adesi and Whaley
approximation technique) option pricing model. The table below outlines the fair value inputs used in the embedded
derivative valuation.
No changes have been made to the valuation technique.
Black Scholes Assumptions					31 December	31 December
					2015	2014
Term range					5 years	5 years
Expected dividend yield					Nil	Nil
Risk free interest rate					1.96%	1,68%
Share price volatility					90.70%	90.09%
Share price at time of grant					6.8 pence	7.4 pence
Description of valuation method and inputs of another class of level 2 fair values.
For the valuation method and assumptions used for the Darwin Warrants refer to note 15 of the financial statements.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR UGUWWAUPQGCW

Date		Source	Headline
12th May 2017	6:04 pm	RNS	Cancellation of AIM Listing and Update on AltX
9th May 2017	5:26 pm	RNS	Appointment of Administrators
28th Apr 2017	12:15 pm	RNS	Notice of intention to appoint administrators
3rd Apr 2017	7:00 am	RNS	Corporate Update
28th Feb 2017	7:00 am	RNS	Corporate and Placing Update
14th Feb 2017	7:00 am	RNS	Further Update re Placing and Corporate Update
31st Jan 2017	7:00 am	RNS	Further Update re Placing
25th Jan 2017	6:31 pm	RNS	Update re Placing
20th Jan 2017	4:00 pm	RNS	Results of Placing
19th Jan 2017	6:20 pm	RNS	Placing Update
13th Jan 2017	1:37 pm	RNS	Proposed Placing, Operational and Corporate Update
19th Dec 2016	7:00 am	RNS	Update with Respect to Finance Facilities
13th Dec 2016	7:00 am	RNS	Directorate Change
29th Nov 2016	7:00 am	RNS	Corporate and Operational Update
22nd Nov 2016	7:00 am	RNS	LACE UPDATE
16th Nov 2016	1:30 pm	RNS	Result of GM
16th Nov 2016	7:00 am	RNS	LACE UPDATE
14th Nov 2016	7:30 am	RNS	Suspension - Diamondcorp plc
14th Nov 2016	7:00 am	RNS	OPERATIONAL UPDATE AND SUSPENSION OF SHARES
9th Nov 2016	7:00 am	RNS	FINANCING AND OPERATIONAL UPDATE
7th Nov 2016	7:00 am	RNS	CORPORATE AND OPERATIONAL UPDATE
4th Nov 2016	4:27 pm	RNS	Form 8.3 - Diamondcorp PLC
4th Nov 2016	11:46 am	RNS	Form 8.3 - Diamondcorp Plc
3rd Nov 2016	4:41 pm	RNS	Form 8.3 - Diamondcorp PLC
3rd Nov 2016	3:33 pm	RNS	Form 8.3 - Diamond Corp plc
3rd Nov 2016	10:39 am	RNS	Form 8.3 - Diamond Corp PLC
1st Nov 2016	6:20 pm	RNS	Form 8.3 - DiamondCorp Plc
1st Nov 2016	3:42 pm	RNS	Form 8.3 - DiamondCorp PLC
1st Nov 2016	12:35 pm	RNS	Form 8.3 - Diamondcorp Plc (Amendment)
31st Oct 2016	6:19 pm	RNS	Form 8.3 - Diamondcorp Plc
31st Oct 2016	5:53 pm	RNS	Form 8.3 - Diamondcorp Plc
31st Oct 2016	2:09 pm	PRN	Correction : Form 8 (OPD) - DiamondCorp Plc
31st Oct 2016	8:38 am	PRN	Form 8 (OPD) - DiamondCorp Plc
31st Oct 2016	8:35 am	BUS	Form 8.3 - DiamondCorp
31st Oct 2016	7:00 am	RNS	Form 8 (OPD) offeree - DiamondCorp plc
28th Oct 2016	5:30 pm	RNS	Posting of Circular and Notice of General Meeting
28th Oct 2016	7:00 am	RNS	Form 8.3 - Diamondcorp Plc
27th Oct 2016	6:32 pm	RNS	Form 8.3 - Diamondcorp Plc
27th Oct 2016	6:28 pm	RNS	Form 8.3 - Diamondcorp Plc
27th Oct 2016	7:00 am	RNS	Directorate Change
25th Oct 2016	4:42 pm	RNS	Form 8.3 - Diamondcorp Plc
21st Oct 2016	7:00 am	RNS	Rule 2.9 Announcement
20th Oct 2016	5:38 pm	RNS	Form 8.3 - Diamondcorp Plc
20th Oct 2016	3:00 pm	RNS	Financing Facility and Board Changes
20th Oct 2016	2:57 pm	RNS	Form 8.3 - Diamoncorp
20th Oct 2016	2:28 pm	RNS	Form 8.3 - Diamondcorp
20th Oct 2016	10:53 am	BUS	Form 8.5 (EPT/RI)- DiamondCorp
20th Oct 2016	9:52 am	RNS	Form 8.3 - Diamondcorp Plc
19th Oct 2016	5:28 pm	RNS	Rule 2.9 Announcement
19th Oct 2016	5:02 pm	RNS	Holding(s) in Company

Latest Share Chat

DCP.L Regulatory News (DCP)

Final Results

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending