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')

OPERATIONAL UPDATE

DiamondCorp plc, the African diamond mine development and exploration company, is pleased to provide an update of mine development at Lace in South Africa.

HIGHLIGHTS

·; After a year's development activity, the new decline at the Lace mine near Kroonstad in the Free State province of South Africa yesterday successfully accessed kimberlite at the -260m bulk testing level.

·; The mine has been dewatered to -280m, some 20m below the sampling level.

·; The 1.2 million tonne per annum dense media separation plant at Lace has been recommissioned and audited in readiness for processing of fresh kimberlite.

·; The Lace mine planning team has been strengthened by the appointment of Mr Bob Harverson as Group Consulting Mining Engineer.

·; Life of mine planning and the definitive cost revision for mine development is well advanced and scheduled for completion at the end of May.

LACE MINE - FREE STATE PROVINCE, SOUTH AFRICA

Since April 2010, development activities at the Lace diamond mine, near Kroonstad 200km southwest of Johannesburg, have focused on completion of the 4.5m x 4.5m decline to access kimberlite resources below any areas stoped in the past. The decline has now accessed the kimberlite at the -260m level, some 20m below previously stoped workings.

Heavy rainfall over Southern Africa and the project area during the first four months of the year has posed challenges for mine dewatering, waste hauling and drilling of a new ventilation raise, and resulted in decline access to the kimberlite being about six weeks behind schedule.

Despite these challenges, the mine has been successfully dewatered to -280m, 20m below the sampling level and extraction of an initial 30,000 tonnes bulk sample of kimberlite is underway. This is expected to be completed in June, at which time an indicative mining grade will be known. The kimberlite sample is being extracted from six 3m x 3m parallel development drives across the extent of the pipe. Simultaneously, the diamonds recovered will be graded and valued to determine the current selling price. The combination of grade and carat value will determine the economics of mining the Lace kimberlite.

In preparation for processing the bulk sample of kimberlite, the dense media separation plant at Lace, with a capacity of 1.2 million tonnes per annum, has been recommissioned with feed from the kimberlite tailings remaining from mining activities which took place between 1900 and 1931. Some 1,321 carats of diamonds recovered during recommissioning were sold at tender in Johannesburg in February 2011 for US$94 per carat. This compares with US$55 per carat received in September 2008, the last time the Company tendered diamonds prior to the price collapse which began in the following month, and US$33 per carat received in May 2009 at the bottom of the market. This strong price for Lace tailings diamonds leads the directors to believe that DiamondCorp's base case of US$120 per carat for diamonds from the Lace pipe is conservative in the current market.

The recovery plant was independently audited during March 2011 and the consulting metallurgist concluded that following replacement of some routine wear components the plant was operating at optimal efficiency.

Over the last four months, a detailed review of life of mine planning has been undertaken by the Lace mine management team led by Mine Manager, Wayne Cloete. The in-house team has been strengthened by the appointment of Mr Bob Harverson as DiamondCorp's Group Consulting Mining Engineer. Mr Harverson is a mining engineer with more than 40 years experience in underground diamond mines in South Africa. He was previously Mine Manager, Kimberley and Project Manager, Finsch for De Beers, then independent advisor to De Beers on block caving and underground mining across all De Beers operations. Also involved in the planning has been Dr Patrick Bartlett, an independent consulting geologist with more than 40 years experience in underground diamond mines in South Africa. He was previously Chief Geologist, Premier Mine and Block Cave School Project Leader for De Beers.

The life of mine review has concluded that initial mining of the block between -260m and -360m depth will be by sub-level stoping, followed by sub-level caving for ore below -360m.

Simultaneously, a detailed revision has been underway on full-scale mine development costs and life of mine operating costs. This review will be concluded before the end of May. One of the interesting outcomes of the review so far is that a forecast 25% increase in electricity costs in South Africa for 2012 has tipped the scales in favour of conveyor belts for ore transport all the way to surface rather than refurbishment of the existing 6.5m x 2.5m vertical shaft. The vertical shaft instead will be used for upcast ventilation, eliminating the need for raise boring a new vent shaft. This change has no impact on mine development time and is anticipated to have a positive impact on life of mine operating costs.

Commenting on the activities, DiamondCorp CEO, Paul Loudon said: 'It is very exciting to start hauling and processing fresh kimberlite from the Lace mine for the first time since mining ceased in 1931.

'By the middle of the year we will know the mining grade and carat value at the top of the first mining block of the estimated 33 million tonnes (SAMREC) of kimberlite remaining below any of the old working areas at Lace, which contains an indicated and inferred resource with an estimated 14 million carats of diamonds to the -855m level.

'With both current diamond prices and the long-term metrics for diamond market looking so strong, our timing looks good in terms of adding value for shareholders.'

London

10 May 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, 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