Update on operations

27 Jun 2006 11:32

Dwyka Diamonds Limited27 June 2006 Dwyka Diamonds Limited ("Dwyka" or "the Company") Update on De Beers tailings re-treatment project Dwyka, the AIM- and ASX-quoted diamond developer and producer, today announcedthat commercial recovery of diamonds from its De Beers tailings re-treatmentproject - located in Kimberley, South Africa - commenced on 14 June 2006,following commissioning of the plant that day. Dwyka retains 40 per cent equity in the re-treatment operation through Supermix,its 100 per cent owned South African subsidiary, with the balance of the projectheld by Dwyka's preferred BEE partner, Kolong Investments. Originally, Dwyka's state-of-the-art dense media separation plant was designedto process throughput of 50,000 tonnes per month ('tpm'); however, modificationsduring the course of construction have resulted in surplus installed capacity.Initial commissioning tests confirmed that the planned production targets shouldbe easily achieved. The Company will maintain a target of 50,000 tpm for Julyand August before commencing throughput optimisation to realise the additionalinstalled capacity. Primary diamond recovery at Dwyka's plant is achieved by way of x-ray sorting.Following this, more conventional technology - that is, a purpose-built,high-capacity grease belt that processes all the tailings discharge from thex-ray sorters - provides a recovery safety net and maximises the performance ofthe recovery section. Once stable operations at full capacity (scheduled for the end of August 2006)are achieved, a de-bottlenecking programme will be implemented to identifycapacity restrictions. At that stage, a cost-benefit analysis of modificationswill be reviewed, with the aim of increasing output on a regular basis andoptimising operating costs. Under the terms of Dwyka's agreement with De Beers, the Company is paid a fixedamount to treat the material on a contract basis. This means no exposure tooperating costs at designed throughput. Once operating costs are deducted, Dwykashares the diamond revenue with De Beers. Today, Adrian Griffin, Dwyka's CEO, commented that: "We are regularly achievingdesign production rates from the new plant, and the benefits of our constructionmodifications are obvious. These modifications should allow throughput of80,000-100,000 tpm with minimal further adjustments. The commissioning processhas stretched our staff but their dedication is commendable and I would like topublicly congratulate them on their success." For further information please contact: In Australia: In United Kingdom:Adrian Griffin, Melissa Sturgess Laurence Read/ Leesa Peters Dwyka Diamonds Limited Conduit PR(+618) 9324 2955 (+44) 20 7429 6605/ (+44) 7979 955 923 Or visit: http://www.dwykadiamonds.com/ This information is provided by RNS The company news service from the London Stock Exchange