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
DiamondCorp’s first diamond sale from its Lace mine has been scheduled for October, when tunnel and initial slot-drive tonnage will have provided a sufficiently representative parcel of kimberlite diamonds.

The result of initial diamond sales, along with controlled bulk test results from the kimberlite tunnel development, will provide the required information for the release of an updated resource statement, the company communicated to shareholders.

It further notes that underground tunnel development is still proceeding slower than planned in fractured ground close to old workings.

Some zones, particularly on the eastern side of the pipe, contain kimberlite of a quite friable nature.

This has hampered the rate of progress and the installation of additional support, particularly at tunnel crosscuts in the kimberlite, and will continue to impact on the development timetable.

The miner has also noted that ground conditions will be a positive for fragmentation and caving when mining starts.

Meanwhile, additional antirollback idlers for the underground conveyor belt system to meet new Department of Mineral Resources requirements have started to arrive on site, with installation under way.

Most of the installation is expected to be completed this month, ahead of the ramp-up in commercial production from the Upper K4 mining block during the fourth quarter.

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