Name and Location
Lace diamond mine development project, Free State, South Africa.

Client
DiamondCorp.

Project Description
The 1.2-million-ton-a-year Lace mine is expected to produce more than 500 000 ct/y of diamonds at peak production.

The Main pipe at the Lace mine contains 33.1-million tons of kimberlite, indicated and inferred to a depth of 855 m, containing an estimated 13.4-million carats in both resource categories at an average grade of 40.1 carats per hundred tons.

The resource has an in-ground value of more than $2-billion at $160/ct.

The deposit will be mined through block-cave mining, with three caves planned over the 25-year life-of-mine on the 47, 67 and 85 levels, at depths of 470 m, 670 m and 850 m respectively.

The kimberlite is open at depth and also contains a significant bulge between 250 m and 360 m, with the potential to add additional tonnage and diamonds not currently included in the resource statement.

Value
The total development cost of the project, including working capital and a 15% contingency on capital and development costs, is estimated at R384-million.

The peak funding requirement of R286-million is expected in April 2015, when blasting of the slot drive and doming start to deliver significant tonnage of kimberlite.

The costs of establishing the block cave thereafter are offset by revenues from the sale of diamonds recovered from kimberlite mined during development.

Duration
DiamondCorp plans to recommission the Lace plant with kimberlite tailings  before mid- 2013, after which it would test the market with the sale of the recovered diamonds. DiamondCorp will assess if it is worth increasing tailings production ahead of underground kimberlite mining in 2014, depending on the prices received.

Latest Developments
DiamondCorp is making progress with the development of the 47-level block-cave development at its Lace mine.

Treatment plant modifications have been completed on schedule and within budget.

Plant commissioning is under way, with tailings retreatment to restart shortly. Initial sale of tailings diamonds is planned for September or October

The ramp-up of underground development activities are on schedule and within budget.

The successful recruitment of experienced underground personnel is continuing on schedule, allowing underground development to move to three-shift continuous operations in July.

The new boxcut excavation was about 75% complete at the end of May and costs are significantly under budget.

The owner-operated mining fleet is providing more than 90% availability. Two additional underground loaders and a 20 t dump truck were rebuilt in-house, on schedule and within budget, during the current quarter.

The engineering, procurement and construction management contract for the design, fabrication and installation of the underground conveyor belts has been let and the design work is complete. Major conveyor component orders have been placed and exchange rates on imported items fixed.

The underground diamond drill rig has been delivered and 2 000 m of underground core drilling is planned before year end.  This drilling will be undertaken from inside the kimberlite to better define the margins of the bulge and the 47 level block-cave area.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
DiamondCorp, tel +44 20 3151 0970, fax +44 20 3151 0971 or email info@diamondcorp.plc.uk.