JOHANNESBURG (miningweekly.com) – Southern African diamond development and exploration company Diamondcorp has reported good progress on its 74%-owned flagship Lace diamond mine project, in the Free State, stating that underground development continued to ramp-up close to schedule and on budget, as the company worked toward its 2015 production target.

By the end of December, underground tunnel development was 15% complete and was being achieved at R27 470/m, or 94% of the budgeted cost.

The diamond explorer said on Thursday that the hiring of an additional two mining crews was under way, with the full underground complement expected to be reached by the end of March. 

Surface piling for the life-of-mine vent shaft had started and would be completed by the end of February; well ahead of the mobilisation of the raise bore contractor in the second half of the year. 

Meanwhile, the underground mining fleet continued to provide over 90% availability, with operating costs running at 95% of budget.

The mining fleet rebuild costs were also running at 95% of budget, with the last two rebuilt 20 t low-profile dump trucks, required to achieve maximum underground development rates, commissioned on time.

The last two underground loaders were currently being assembled and were scheduled for completion next month.

Further, twin decline development from the base of the boxcut continued downwards to meet the development tunnels coming up from the 92 m level.

The company stated that, to date, ground conditions in the upper levels were more competent than those experienced in the exploration decline at a similar elevation.

Installation of the steel sets for reinforcement of the portal area were complete and double sets were now being installed up the ramp of the boxcut.

Once installed, timbered and shotcreted, the boxcut would be partially backfilled and profiled with shallow batter angles. 

Further, the design and detail drawings for the underground conveyor belt system were 85% complete, on schedule and under budget, while fabrication of the first leg of the conveyor to be installed had been completed and delivered to site. Fabrication of the second leg was 40% complete.

BULGE DRILLING

Drilling of the bulge area continued from inside the kimberlite and, by the end of December, a total of 1 220 m of diamond core drilling had been completed.

Diamondcorp reported that the nine holes drilled, to date, continued to confirm that the bulge area had the potential to host significant additional kimberlite between the 260 m and 470 m levels, which was not currently in the mine plan.

This drilling would form the basis of a resource upgrade for the bulge area in the first half of the year and, thereafter, a feasibility study on the economics of mining this area.

TAILINGS RETREATMENT

Meanwhile, following adjustments to the bottom screen size, tailings retreatment continued on one shift in October and two shifts in November and December.

During the three-month period ended December 31, the plant processed 138 475 t against a budgeted 140 000 t and recovered 6 522.71 ct at a recovered grade of 4.71 carats per hundred tons (cpht) against a budgeted 5 cpht.

Mining during the latter part of the period was in the oldest lower-grade section of the dump to clear space for the installation of a 400 t/h in-pit high-frequency sand screen. 

The sand screen was installed in January and commissioning by the manufacturer was about to start.

“The screen has the potential to increase tailings throughput to 150 000 t/m and, at an expected average grade of 5 cpht, the screen is forecast to increase diamond recoveries from tailings retreatment to 7 500 ct/m and reduce plant operating costs to R22/t on a three shift basis,” Diamondcorp noted.

DIAMOND SALES

Diamond sales for this year would begin in February, with ten sales scheduled for the year.

The company’s diamontaires in Antwerp reported that demand for rough diamonds had improved and that prices had increased by between 5% and 10% over the prices achieved in December.

Diamondcorp was forecasting an average of $63/ct for its tailings goods in 2014, which would provide revenue of R35/t at an exchange rate of R11 to the dollar. 

Meanwhile, the 20% weakening of the rand since the middle of last year had resulted in potential tailings retreatment margins increasing by 30% from a forecast R10/t to R13/t.

The weaker rand also had a beneficial impact on potential underground operating costs, with forecast operating breakeven-grade falling from 10 cpht to 9 cpht after adjusting for the negative impact on diesel price inputs.

The Lace kimberlite grade ranges from 24 cpht in the upper levels to an estimated 57 cpht in the lower levels of the pipe. 

“The weaker rand and stronger sterling also has a positive impact on the group debt position, as the majority of the company’s project finance is denominated in rand and reported in sterling. Diamond sales being denominated in dollars provide a natural hedge against the weakening rand,” Diamondcorp noted.