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

Client
Lace Diamond Mines (LDM), a 74% subsidiary of 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 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 ct per hundred tonnes (cpht).

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

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

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

Net Present Value/ Internal Rate of Return
Not stated.

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 will start to deliver significant tonnages 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 second half of 2015.

Latest Developments
The Lace diamond mine is on track for mining operations to start in the second half of this year, DiamondCorp has reported.

In a project update, the dual-listed company notes that it has drilled 3 321 m in 21 holes, which have delineated 2.6-million tonnes of high-grade kimberlite above the 370 m level, an increase of more than two-million tonnes over the original geological model.

Data from bulk testing is scheduled to be completed by the end of the second quarter, while processing of K6 kimberlite, recovered from the production level drives, has started. A 19.83 ct clear white gem diamond has been recovered – the largest gem diamond recovered from underground development to date.

DiamondCorp has pointed out that mine development costs are averaging R38 961/m, higher than the budgeted R37 000/m, as a result of increased operating costs on the company’s underground mining fleet.

“In particular, dump truck breakdowns and repairs have been high, owing to the long haul distances from the UK4 Block development levels to surface,” the diamond miner says.

DiamondCorp will, therefore, prioritise the completion of the tunnels and an underground loading chamber required for the commissioning of the underground conveyor belt system.

The system, which will handle kimberlite and development waste, is 91% complete and on site, 51% installed and on schedule for commissioning ahead of the mining ramp-up.

The conveyor belt can bring 400 t/h to surface – averaging 8 000 t/d – compared with the maximum of 975 t/d being hauled by the company’s five dump trucks.

Once the conveyor belt is installed, load and haul costs will decrease to an estimated R6 200/m, compared with the R13 000/m when using trucks.

Meanwhile, the company’s metallurgical consultants have started preliminary testwork on the potential for installing a high-volume optical and X-ray waste sorter ahead of the dense-media separation plant.

“Such a unit could remove large volumes of internal waste from the kimberlite before processing. The K6 kimberlite contains up to 85% waste in places and the higher-grade K4 kimberlite has up to 25% internal waste,” DiamondCorp says.

Installation of a waste sorter could potentially significantly reduce water and electricity consumption at the processing plant and could also allow for the kimberlite to be processed faster than the current planned rate of 220 t/h. If the testwork is successful, a unit could be installed before the mining ramp-up from the first block cave.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The mine’s ramp-up is expected to start four months ahead of the original schedule.

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