DCP.L Regulatory News (DCP)

30 Mar 2009 07:30



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" or "the Company")

COMMISSIONING OF PRIMARY CRUSHING CIRCUIT AND DIAMOND SALES

HIGHLIGHTS

- Commissioning of Phase 2 underground mining crushing circuit at Lace commences on schedule.

- Kimberlite mined from the Satellite Pipe stockpiled for processing after commissioning.

- Mining rate for Phase 2 to rise to 3,000 tonnes per day in second half of 2009.

- Main Pipe, high-grade coherent (hypabyssal) kimberlite to be accessed by mid-year.

- 2,265.79 carats of small gem diamonds recovered from Phase 1 tailings re-treatment tendered in Johannesburg for R922,807, representing a price of US$39.51 per carat - up 32% from November.

DiamondCorp plc, the South African diamond mining company, is pleased to announce that commissioning of the new primary crushing circuit at the Lace diamond mine in South Africa has commenced on schedule, completing the plant modifications required for Phase 2 underground mining. 

DiamondCorp managing director and CEO Paul Loudon, said: 'This achievement marks an important step in our development as a long-life underground diamond mining company, and paves the way for processing of kimberlite from the Lace Pipe to commence again for the first time since 1930.'

Over the next month, approximately 50,000 tonnes of kimberlitic material remaining from previous mining will be processed to commission the new crushing circuit. Once the circuit is operating to design specification, the plant will be purged and a bulk sample of freshly mined kimberlite from the Satellite Pipe will be processed to determine grade. Immediately after the Satellite Pipe sample is processed, the plant is scheduled to commence processing potentially high-grade coherent (hypabyssal) kimberlite which is being accessed by a new drive off the 4m x 4m decline. Meanwhile, diamonds recovered from the Satellite Pipe sample will be sold to determine carat value, so that by the second half of 2009 the outstanding grade and carat value questions at Lace under commercial mining conditions will have been answered.

The initial mining rate from Phase 2 underground development at Lace is 1,000 tonnes per day, with plans to increase this to 3,000 tonnes per day in the second half of 2009.

Approximately 35 million tonnes of kimberlite have been outlined in the Main Lace Pipe between the 240m and the 855m level at a predicted average grade of 42 carats per hundred tonnes, containing almost 14 million carats. Up to a further 7 million tonnes of kimberlite exist above the 240m level, but are not taken into account in the Company's resource estimates due to the existence of old workings. Nonetheless, this remnant kimberlite, much of which is expected to be high-grade coherent kimberlite, is available for mining. A further 3.5 million tonnes of kimberlite also exists in the Satellite Pipe 30m to the west of the Main Pipe. The Satellite Pipe was historically a lower diamond grade than the Main Pipe, and no tonnage from this Pipe has been incorporated into resource estimates.

Earlier this month, DiamondCorp sold a small parcel of diamonds recovered late last year from the Phase 1 Lace tailings re-treatment. Some 2,265.79 carats of gem diamonds were tendered in Johannesburg and sold for R922,807, representing a price of US$39.51 per carat. 

Commenting on the tender price, Paul Loudon said: 'We are starting to see some stability returning to the market for small diamonds as a result of the massive supply cuts by the major producers. While our March price is down 40% from the same time last year, it is 32% higher than the price we received last November for similar tailings goods.

'This result provides us with considerable encouragement that the Phase 2 at Lace will be profitable at the current diamond prices.'

30 March 2009

London

Sponsor:

Investec Bank Limited

For further information, please contact:

Paul Loudon

DiamondCorp plc

+44 20 7256 2651 

Joe Nally/Liz Bowman

Cenkos Securities plc

+44 20 7397 8900

Robert Smith/Tanis Crosby

Investec Bank Limited

+27 11 286 7662

Charmane Russell

Russell & Associates

+27 11 880 3924

Gareth Tredway

Conduit PR

+44 20 7429 6606/+44 7922 923 306