DCP.L Regulatory News (DCP)

DiamondCorp plcJSE share code: DMCAIM share code: DCPISIN: GB00B183ZC46(Incorporated in England and Wales)(Registration number 05400982)(SA company registration number 2007/031444/10)('DiamondCorp' or 'the Company')

LACE MINE DEVELOPMENT COSTS

DiamondCorp plc, the African diamond mine development and exploration company, is pleased to announce the completion of its detailed review of full-scale mine development costs and estimated life of mine operating costs for the Lace project near Kroonstad in the Free State province of South Africa where underground bulk sampling is now underway.

The results of the review are summarised as follows:

·; Mining of the first block of kimberlite between the 26 and 33 levels (-260m to -330m depth) is scheduled to be undertaken at a rate of 4,000 tonnes per day.

·; The first block containing approximately 4.8 million tonnes of kimberlite will be mined by sub-level stoping, followed by sub-level caving for the estimated 27.5 million tonnes of kimberlite below the 33 level.

·; Ore hoisting will be by conveyor belts to surface and the existing 6.5m x 2.5m vertical shaft will be used for upcast ventilation. This eliminates the requirement to raise bore a new ventilation shaft.

·; The introduction of conveyors has resulted in an increase in development costs, but provides significant savings on life of mine operating costs given the anticipated increases in South African electricity tariffs in the years ahead. It has minimal impact on the development schedule.

·; Three diamond selling prices were considered, all using an initial mining grade of 24 carats per hundred tonnes (cpht) - a base case of US$120 per carat, a middle case of US$140 per carat and an upper case of US$160 per carat.

·; Diamond grade is forecast to rise to 40 cpht after the first eight years of mining when the deeper, higher grade CK (coherent) kimberlite is mined.

·; A grade of 24 cpht results in annual production of 294,000 carats. A grade of 40 cpht results in annual production of 490,000 carats.

·; Approximately 400,000 tonnes of kimberlite is scheduled to be mined from stoping development during the 17 months of mine development through to November 2012 when full-scale commercial production is expected to be reached.

·; Diamond sales revenue from this kimberlite will contribute between R90,000,000 (£8.04 million) and R116,000,000 (£10.35 million) towards mine development costs, depending on grade and carat value.

·; Net capital cost estimates to reach full production range from R100,000,000 (£8.9 million) to R126,000,000 (£11.3 million) depending on revenue from diamond sales during development.

·; Diamond revenue is estimated to be between R196 (£17.50) and R261 (£23.30) per tonne.

·; Operating costs are estimated to be R105 (£9.38) per tonne, resulting in an initial operating margin of between 46% and 60%.

·; Initial project EBITDA is estimated to be between R79,000,000 (£7.1 million) and R159,000,000 (£14.2 million) per annum.

Commenting on the review, DiamondCorp CEO, Paul Loudon said: 'The Lace mine has the potential to be a significant cash generator for DiamondCorp with more than 25 years of mine life.

'At current strong diamond prices, the initial minimum operating margin is expected to be a robust 46%, rising to very high levels if the diamond grade improves with depth as forecast in the geological model.

'The 30,000 tonne bulk sample currently underway at Lace will determine the initial mining grade and carat value at the top of the first mining block.

'We are pleased with the kimberlite we have extracted so far from the 26 level, though initial mining rates have been hampered by the need to relocate the main dewatering pumps from the 16 level to the 24 level and major component breakdowns on a fleet of 30 tonne low profile dump trucks we have hired to supplement our own fleet.

'These delays mean that while a preliminary grade and carat value will be available this month, the final results will not be available until July.'

London

6 June 2011

AIM Nomad: Fairfax I.S. plc

AIM Brokers: Fairfax I.S. plc, Ocean Equities LtdJSE Sponsor: PSG Capital (Pty) LimitedDiamondCorp plc, Paul Loudon +44 20 7256 2651Ewan Leggat/Laura Littley, Fairfax I.S. plc +44 207 598 5368Guy Wilkes, Ocean Equities Limited +44 207 786 4370John-Paul Dicks, PSG Capital (Pty) Limited +27 21 887 9602Charmane Russell/Marion Brower, Russell & Associates +27 11 880 3924

Ana Ribero, Blythe Weigh Communications +44 020 7138 3206