DCP.L Regulatory News (DCP)

11 April 2013 

DiamondCorp plc

JSE share code: DMC & AIM share code: DCP

ISIN: GB00B183ZC46

(Incorporated in England and Wales)

(Registration number 05400982)

(SA company registration number 2007/031444/10)

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

Lace mine development update

Highlights

·; Second US$3 million tranche of the Tiffany loan received finalising R320 million finance package for the Lace mine development.

·; New boxcut excavation and underground development activities commenced.

·; Additional underground loaders and trucks have been secured and rebuilds underway.

·; Plant upgrade work continues on schedule for tailings re-treatment to restart in the current quarter.

·; Key underground and plant personnel recruited.

·; Underground diamond drill rig ordered and awaiting delivery; bulge definition a priority.

DiamondCorp, the Southern African diamond development and exploration company, is pleased to provide the following update on activities relating to the 47 level block cave development at the Lace mine in the Free State province of South Africa.

Funding finalised

On 10 April 2013, the Company received on schedule the second and final tranche of $3 million (£1.96 million) of loan funds from Laurelton Diamonds, Inc., a wholly-owned subsidiary of Tiffany & Co. The combination of funding through the $6 million Tiffany loan, £4.2 million of convertible bonds (issued in December 2012) and R220 million (£15.6 million) from the Industrial Development Corporation of South Africa (as announced on 21 September 2012) completes the R320 million (£23 million) Lace project financing package.

The Main pipe at the Lace mine (DiamondCorp 74% interest) contains 33.1 million tonnes of kimberlite with an indicated and inferred resource to a depth of 855m containing approximately 13.4 million carats at an average grade of 40.1 carats per hundred tonnes. At a carat value of $160 per carat, the resource has an in-ground value in excess of $2.1 billion. The deposit will be mined by block cave mining, with three caves planned over the next 25 years on the 47, 67 and 85 levels (at depths of 470m, 670m and 850m respectively). The kimberlite is open at depth, and also contains a significant bulge between 250m and 360m depth with the potential to add additional tonnage and diamonds not currently included in the resource statement.

Development activities February-March 2013

In February, the Company commenced excavation of a new 66,000 bank cubic metre (bcm) boxcut which will provide the surface entrance to the twin conveyor belt and services declines for the life of the mine. A total of 23,000 bcm of surface sediments and clay material was excavated to the end of March and the boxcut is expected to be completed on schedule in the current quarter.

Underground blasting commenced during March with a vent raise on the 16 level to provide sufficient interim ventilation for continuous blasting of the twin decline development to the 47 level. The raise development is continuing on schedule and is expected be completed in the current quarter. Development also commenced on a tipping arrangement on the 24 level to allow loading of development waste into dump trucks for hauling to surface until such time as the conveyor belts are installed.

During the period, the Company completed the rebuild of a 9.5 tonne underground loader and two underground dump trucks in its on-site heavy equipment workshop. Two additional low profile loaders and three additional underground dump trucks were purchased in February, completing the fleet requirements for the underground development. These units will be rebuilt and commissioned during the next two quarters, in line with the planned development programme.

Essential upgrades are underway on the mine's 1.2 million tonne per annum dense media separation plant to allow smooth transition from tailings to kimberlite processing, and relieve front-end bottlenecks in the re-crush circuit. These modifications are on schedule and plant re-commissioning is planned during the current quarter, allowing tailings re-treatment activities to recommence.

Several key operational personnel were recruited during the period, including a mine overseer with considerable experience in underground kimberlite development and block caving and an experienced diamond processing plant manager. The Company is not experiencing any difficulty in securing personnel with the experience and skills required for the mine development.

The Company has prepared a drilling cubby on the 26 level inside the Main pipe and has ordered a new skid mounted underground drilling rig which is being shipped from Australia and is expected to be delivered and commissioned during the next quarter. A total of 2,000m of underground drilling is then planned in the bulge area as well as the 47 level block cave area to better define the kimberlite margins and facies distribution.

DiamondCorp's CEO, Paul Loudon said: "We are pleased with the progress achieved with operations in the first quarter and remain on target to commence diamond production from tailings re-treatment in the next three months. This will initially be on a one shift basis while the upgraded processing plant is re-commissioned. We will then have the capacity to ramp up to three shifts in the second half of the year depending on diamond prices."

The Company also announces that it will shortly publish an updated corporate presentation on its website.

Contact details:

DiamondCorp plc

Paul Loudon, Chief Executive

Tel: +44 20 3151 0970

+27 56 212 2930

UK Broker & Nomad

Panmure Gordon (UK) Limited

Dominic Morley/Adam James

Tel: +44 20 7886 2500

Joint Broker

SP Angel Corporate Finance LLP

Ewan Leggat/Laura Littley

Tel: +44 207 598 5368

JSE Sponsor

PSG Capital (Pty) Limited

John-Paul Dicks

Tel: +27 21 887 9602