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 INDEPENDENT ENGINEERING AND RESOURCE REPORTS

DiamondCorp plc, the African diamond mine development and exploration company, is pleased to announce the receipt of an Independent Engineering Report on the proposed 47 Level Block Cave development at the Lace mine prepared by SRK Consulting South Africa ("SRK").

HIGHLIGHTS

SRK's key conclusions are that:

·; The continuous trough block caving method proposed for the 47 level (470m depth) mine development is an appropriate mining method for the Lace mine to achieve 1.2 million tonnes a year of kimberlite production.

·; The proposed twin decline access and conveyor system is a sound approach which will be quicker and cheaper than refurbishing the collapsed shaft system.

·; The existing mine engineering infrastructure has been designed, installed and operated to a high standard.

·; Certain modifications will be required to the existing DMS (dense media separation) processing plant recrush circuit to ensure 200 tph of kimberlite can be treated without the scrubber section being overloaded. These modifications are budgeted for in the current capital costs.

·; The capital and operating costs in the Lace financial model for a 1.2 million tonne per annum mining operation are reasonable and within industry norms for block caving operations worldwide. The model forecasts mining costs at R82.65 per tonne, processing costs at R33.44 per tonne and general & administration at R7.61 per tonne. Total cost of R123.7 per tonne ($16 per tonne).

·; Kimberlite will be accessed first on the anti-socket (or slot drive) level, 30m above the production level, 12 months after development commences.

·; The anti-socket level tunnels will be developed across the entire pipe by month 15 and initially allow final cave footprint delineation, the geotechnical model and grade distribution to be finalised. They are later utilised for physical observation of the blasted slots. The total cost to reach this stage of development is estimated at R169 million ($22.2 million).

·; The total development cost (including working capital and a 15% contingency on capital and development costs) is estimated in the Lace financial model at R384 million ($50 million).

·; The peak funding requirement (including working capital) is estimated to be in month 25 at R286 million ($37.6 million) when blasting of the slot drive and doming starts to deliver significant tonnage of kimberlite.

·; The costs of establishing the block cave thereafter are offset by revenues from the sale of diamonds recovered from kimberlite mined and processed during the doming level and production level developments.

·; Approximately 600,000 tonnes of kimberlite will be extracted and processed during the block cave development. Anticipated revenue from this kimberlite is R421 million ($54.7 million) during the 43 months of development before 100,000 tonnes per month of production is achieved.

·; The peak funding requirement is only moderately sensitive to diamond price and grade.

·; A high level review and sensitivity analysis of the life of mine plan and financial model provides positive returns under most scenarios from a project that shows robust cashflows.

·; The project net present value in the agreed LoM financial model using a 10% discount rate is R1,452 million ($188 million). (DiamondCorp 74% share $139 million).

Commenting on the report, DiamondCorp CEO, Paul Loudon said: 'Our development plan has now been validated by SRK which paves the way for discussions with a range of potential project financiers to progress. The key driver for management in these discussions will be to find the optimum financing method which is the least dilutive for existing shareholders.'

A copy of the SRK report will be available for download from the DiamondCorp website, www.diamondcorp.plc.uk.

In conjunction with the SRK report, a geological resource review was undertaken by VP3 Geoservices which has updated the Resources Statement for the Lace Mine in accordance with the SAMREC Code of Diamond Resource reporting. The review concludes that:

·; The Lace Main Pipe contains 33.121 million tonnes of kimberlite indicated and inferred to a depth 855m.

·; The Main Pipe contains approximately 13.291 million carats in both resource categories.

LACE MINE RESOURCE STATEMENT

* VK = massive volcaniclastic kimberlite, previously referred to as TKB or tuffisitic kimberlite breccia.

** CK = coherent kimberlite, previously referred to as hypabyssal kimberlite.

? $/carat on inferred CK and grade on inferred satellite pipe kimberlite cannot be determined until underground mine development intersects these facies and a bulk test is extracted.

BACKGROUND - LACE MINE, FREE STATE PROVENCE, SOUTH AFRICA

The Lace diamond mine is located 25km northwest of the town of Kroonstad within the Free State Province of South Africa. The mine operated from 1896 to 1931, and according to mine records produced approximately 700,000 carats of diamonds from 4.5 million tonnes of kimberlite at a recovered grade of 16 cpht. The production was reported to be high quality, white diamonds, with the biggest stones recorded historically being 122 and 86 carats. The kimberlite was mined by open pit to approximately 100m depth, then by underground methods to 240m depth. In 1920s, higher grade kimberlite was encountered as the workings went deeper, and a decision was taken to develop a 6.5m x 2.5m vertical shaft to the 36 level (360m) and pre-develop the kimberlite between the 24 level and the 33 level with 2m x 2m development drives.

The vertical shaft and development drives were completed in 1930, a year before the mine closed when diamond prices collapsed in the Great Depression. The mine was then kept dewatered until 1939, when it was acquired by De Beers Consolidated Mines Limited. De Beers never operated the mine, but instead let it flood, thereby sterilising the resource as part of their control of the supply side of the diamond industry. Following progressive changes to the mining law in South Africa, DiamondCorp acquired the property from the Christiaan Potgieter Trust in 2006 in conjunction with Black Economic Empowerment partners Shanduka Resources and Sphere Investments.

In 2007, DiamondCorp constructed a 1.2 million tonne per annum dense medium separation plant at Lace and commenced treatment of approximately 3.4 million tonnes of kimberlite tailings from the mining activities which took place between 1896 and 1931. Approximately 1.1 million tonnes of tailings were treated at a recovered grade of 8 cpht. At the same time, a 4.5m x 4.5m decline was commenced to access and bulk test the kimberlite below the previous mining levels. Decline development and tailings re-treatment ceased at the end of 2008 when diamond prices fell by 50 per cent during the credit crisis. Decline development resumed in May 2009 and reached the kimberlite sampling level 25 in May 2010.

London

20 March 2012

The Competent Person with overall responsibility for the Independent Engineering Report is Mr M.L. Wertz (Pr Eng, Engineering Council of SA Registration Number 20010025), who is a partner with SRK Consulting and a mining engineer with more than 20 years experience who has carried out numerous due-diligence reviews in South Africa and internationally during the past 10 years. Mr Wertz and SRK have reviewed the information contained herein and approved the contents of the news release.

The Competent Person responsible for the resource statement contained in this announcement is Mr Paul Zweistra (Pr. Sci. Nat., Registration number 400016/93) a full-time employee of VP3 Geoservices (Pty) Ltd. VP3 and Mr Zweistra have revieved the information contained herein and approved the contents of this news release.

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 3151 0970/+27 56 212 2308Ewan Leggat, 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