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 has started commissioning its newly installed 400 t/h underground conveyor belt ahead of the ramp-up in production from the Upper K4 (UK4) mining block at the Lace diamond mine.

DiamondCorp aims to complete commissioning by the end of October.

The new conveyor belt will replace the company’s fleet of dump trucks for the hauling of future kimberlite and development waste mined at Lace, which will reduce the cost per tonne to load and haul rock.

The dump trucks will still be used to transport the kimberlite from the UK4 production level to the conveyor belt at a planned rate of up to 30 000 t/m.

“While mining of the UK4 progresses, the conveyor belt will be progressively extended down to the first block cave level. Development waste from the deeper levels will be loaded directly onto the conveyor belt by underground loaders without using trucks,” DiamondCorp has said.

The company has procured a conveyor belt with double the capacity of the current front-end capacity of the processing plant to ensure the continuation of transporting sufficient ore to surface to allow for a future increase of the underground mining rate.

Investec has commented that it expectes to see imminent cash flows, with the Lace mine set to ramp up now that the conveyor belt is in place.

"We also hope to see success at reducing water consumption that could support increased production, thereby adding value," it adds.

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