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 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
Underground tunnel development at the Lace diamond mine is proceeding slower than planned, owing to fractured ground close to old workings; however, the development work in the Upper K4 (UK4) block remains close to schedule and mining operations are on track to start in the coming months.

DiamondCorp has indicated that ground conditions around old workings do not pose problems for future mining and could potentially  enhance fragmentation, but requires extra support during development to ensure long-term hanging-wall stability.

The slower-than-planned development rate have resulted in mine development costs averaging R44 193/m to date, compared with a budget of R37 000/m, owing to the impact of fixed labour and electricity costs.

Meanwhile, excavation of the underground loading chamber and the raiseboring of the ore pass to allow UK4 Block kimberlite to be tipped onto the conveyor belt has been completed on time and within budget.

The conveyor belt has been 99% fabricated on site and 75% installed; however, final installation and commissioning has been delayed because the Department of Mineral Resources had instructed that additional antiroll-back idlers in sections of the conveyor belt over and above systems already in place, be installed.

The idlers have been ordered and are scheduled for delivery in the next four weeks. Following installation of the conveyor belt system, load and haul costs are expected to be reduced by more than half.

DiamondCorp has highlighted that processing K6 kimberlite recovered from the production level drives is also continuing, while processing of higher-grade K4 kimberlite has started.

“Diamond recoveries from the development K4 kimberlite processed are exceeding expectations with respect to overall quality and [we are] confident that the UK4 operating margins will exceed 70% as previously predicted from microdiamond analysis,” the company says.

DiamondCorp’s 220 t/h dense-media separation plant operated efficiently, processing 1 000 t of K6 and K4 kimberlite bulk samples extracted from the development tunnels.

Meanwhile, the company’s detailed studies on installing high-volume optical and/or X-ray waste sorting, are expected to be completed before year-end and, if positive, the preferred capital investment recommendation will be presented to management.

“Waste sorting has the potential to significantly reduce plant water and electricity consumption and could also allow for kimberlite to be processed faster than the current planned 220 t/h. If the testwork is successful, a unit could be installed before the mining ramp-up for the first block cave,” it notes.

The company’s management has also studied its options for a tailings retreatment and has concluded that tailings reprocessing will restart only when mining of the kimberlite reaches commercial volumes.

“Then, a small amount of tailings, about 1000 t a week, will be blended into the kimberlite run-of-mine, thereby reducing water consumption and the need for changing screen panels. The dilution impact of this small amount of tailings blending will be minimal and the remaining tailings resource will be treated over the 25-year life of the underground mine,” DiamondCorp states.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The mine’s ramp-up is expected to start six 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