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

Client
DiamondCorp.

Project Description
The 1.2-million-tonne-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
The Lace mine is due to start production in the first half of 2015.

Latest Developments
DiamondCorp subsidiary Lace Diamond Mines (LDM) has signed a diamond beneficiation joint venture (JV) agreement with Johannesburg cutting and polishing factory Distinctive Choice.

Under the terms of the JV, LDM has the option of processing some of the larger, high-quality diamonds that are not included in the offtake agreement with Tiffany & Co subsidiary Laurelton Diamonds.

Diamondcorp agreed to a term loan of $6-million with Laurelton in January this year in exchange for an offtake agreement for diamond production from the Lace mine.

Diamondcorp contends that over the life of the mine, the beneficiation JV has the potential to provide LDM with significant additional income, providing critical insight into the performance of Lace diamonds during polishing and assisting with beneficiation targets under the country's Mining Charter.

Meanwhile, the ramp-up at Lace is on schedule and within budget, with underground tunnel development currently 11% complete.

Until recently, underground development has been limited to two crews operating three shifts, while blasting of the temporary vent raise, which bypasses the blockage in the vertical shaft, has been completed.

With the completion of the vent raise and the installation of surface exhaust fans, multiblast conditions exist underground and the rate of development can increase to more than double the current rate of 200 m a month.

The underground mining fleet continues to provide availability of more than 90%, with operating costs running at 87% of budget.

The mining fleet rebuild costs are running at 95% of budget, with the last of the dump trucks and underground loaders (LHDs), required to achieve maximum underground development rates, being assembled in the workshop. They are scheduled to be commissioned by year-end.

With the completion of these two 20 t dump trucks and two LHDs, the full development and production fleet of five trucks, five LHDs and four face drilling rigs will be in place.

In addition, an order had been placed with Sandvik for a new long-hole drilling rig required for drilling the undercut levels of the block cave. This drilling rig is scheduled for delivery in the second half of next year.

In September this year, the new life-of-mine boxcut was completed and development of the twin declines from the base of the ramp started.

Steel sets for reinforcement of the portal area are installed, with the design and detailed drawings for the underground conveyor belts system on schedule and within budget.

Fabrication of the first leg of the conveyor belt to be installed is 95% complete and installation is about to begin. Procurement and exchange-rate protection on all long-lead time and imported items is complete.

In addition, the 1.2-million-tonne-a-year dense media separation plant at Lace was successfully recommissioned during August, with material from the three-million tonnes of tailings remaining from mining activities that took place from 1902 to 1931.

The refurbished plant will allow “seamless” transition from tailings retreatment to the processing of kimberlite from underground development.

Further, as a result of an increase in the bottom screen cut of the plant, the diamonds being recovered are coarser in size distribution and are, therefore, expected to fetch a higher average price per carat than the diamonds previously recovered from tailings.

Plans were also in place to increase tailings throughput to more than 150 000 t a month in the first half of 2014 by introducing in-pit screening.

If recoveries of five carats per hundred tons are acheived, the in-pit screening has the potential to increase production to 7 500 ct a month, which will allow for a significant proportion of the tailings to be retreated before the underground operations achieve full production.
Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project is on target to start production in 2015.

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