DCP.L Regulatory News (DCP)

25 Oct 2007 07:30

Diamondcorp Plc25 October 2007 DiamondCorp plc ("DiamondCorp" or the "Company") Trading Update for the three months ending 30 September 2007 25 October 2007 Highlights • Lace mine diamond recovery plant commissioned.• 9,290 carats of diamonds recovered during commissioning from 120,399 tonnes of tailings, including a 17.72 carat stone and a 13.81 carat stone.• 5,412 carats sold at tender for US$261,105.• More than 80% of the diamonds recovered to date are gem quality, including a high proportion of clear white stones, a significant proportion of fancy yellow stones, as well as more than 300 small pink and vivid purple diamonds and one small intense blue diamond.• As a result of the high quality of the diamonds recovered from the tailings, a programme for accelerated development of the Lace underground mine has been adopted.• After the quarter, the Company's option to purchase Sonop was terminated. As a result, trading in the Company's shares was restored on AIM.• Management worked with Investec Bank during the quarter to progress the process of obtaining a listing for DiamondCorp's shares on the JSE Limited. South African Operations - Lace Diamond Mine (DiamondCorp 74%) During the quarter, commissioning of a 1.6 million tonne per annum dense mediaseparation plant was completed at the Company's 74% owned Lace diamond mine,near Kroonstad, 200km southwest of Johannesburg. During commissioning, 120,399tonnes of tailings were treated for the recovery of 9,290 carats of diamonds,representing a recovered grade of 7.72 carats per hundred tonnes (cpht). Approximately 40% of the tailings treated during commissioning have beenstockpiled awaiting re-crushing to liberate additional diamonds locked up in+6mm to 28mm kimberlite particles. This material is currently being processedthrough the recrush circuit which was not operational during commissioning.Since commencement of the recrush circuit, the recovered grade of run of minetailings has been in excess of the budgeted 10.8 cpht. The recrush material willnow be treated in a campaign to clear the stockpile. Once this is cleared, theplant should achieve a steady state production of approximately 4,000 tonnes oftailings material per day. During the period, 5,412 carats recovered during commissioning were sold attender for proceeds of US$261,105. DiamondCorp will hold another tender of Lacediamonds before the end of the year. In assessing the first tender parcel, the company's independent diamond advisersWWW International Diamond Consultants noted that the colour of the Lace diamondswas above world average and the better-quality parcels contained a healthyproportion of well formed crystal and octahedron sawable shapes. More than 80% of the production is gem quality, and management is pleased withthe significant proportion of fancy coloured stones in the production. More than7% of production comprises fancy intense yellow stones, and to date more than300 small intense pink and vivid purple diamonds have been recovered. One smallintense blue diamond has also been recovered. Commenting on the production, DiamondCorp's managing director Paul Loudon said:"The quality of the stones is exceeding our expectations and the significantproportion of fancy coloured stones including the rarest diamond of them all -an intense blue diamond - augurs well for high quality production fromunderground at Lace. As a result, management has formulated an accelerateddevelopment plan which aims to introduce pipe material into the mine plan by thethird quarter of next year." The accelerated plan involves a sinking decline shaft into the unmined portionof the Lace satellite pipe which was only mined by open pit methods to a depthof 50m. Bulk testing followed by trial underground mining of the satellite pipekimberlite via the decline shaft will be undertaken simultaneously with therefurbishment of the existing 360m deep 4.6m x 2.7m vertical shaft whichaccesses the main Lace pipe. Snowden Mining Industry Consultants Pty Ltd hasbeen engaged to work with Lace management in completing a Scoping Study on theaccelerated development plan during the current quarter. Operations - Other During the quarter, the Company signed an option agreement to acquire SonopDiamond Mining (Pty) Limited, South Africa's largest private diamond miningcompany for 7.5 million DiamondCorp shares and US$45 million in cash. As aresult of signing the option, the company's shares were suspended from tradingon AIM. During October, DiamondCorp and Sonop mutually agreed to terminate theoption and, accordingly, DiamondCorp has requested that trading in its ordinaryshares on AIM be restored. DiamondCorp continues to evaluate the Sonop assets aspart of its ongoing programme to expand its diamond production base in SouthAfrica. During the quarter, management also assessed a number of other diamondproduction opportunities and several of these opportunities are beingprogressed. No activities were undertaken on the Company's explorationproperties during the quarter. Corporate Management worked with Investec Bank during the quarter to progress the processof obtaining a listing for DiamondCorp's shares on the JSE Limited. For further information, please contact: Paul Loudon, Managing Director and CEODiamondcorp plc+44 20 7256 2651 Joe Nally/Simon SouthwoodCenkos Securities plc+44 20 7397 8900 Robert Smith/Cindy StoutjesdykInvestec Bank Limited+27 11 286 7662 This information is provided by RNS The company news service from the London Stock Exchange