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 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.

Duration
The Lace mine is due to start production in the second half of 2015.

Latest Developments
DiamondCorp has achieved another milestone, with the first sale of kimberlite diamonds from the mine at the end of March since 1931, through direct sales and competitive tenders, with all lots on offer sold.

In December, the mine marked the start of the ramp-up process towards commercial production from underground for the first time since October 1930, with full production of 30 000 t/m expected by July.

The company has experienced “good demand” in all size categories, with 8 648 ct of the diamonds recovered during bulk testing sold.

About 6 247 ct of kimberlite diamonds larger than 1.25 mm in diameter have fetched an estimated $1.09-million, at an average of $175/ct, while 2 401 ct of tailings diamonds and fine diamonds smaller than 1.25 mm in diameter were sold for $46 000, representing an average of $19/ct.

Included in the sale was a 22.11 ct diamond that had been sold into DiamondCorp's beneficiation joint venture as an H-coloured stone at $5 000/ct and a 1.08 ct Type II purple stone, which sold at tender for $6 363/ct.

Meanwhile, underground mining and development at Lace resumed in January and remains on trace for production the full production target by July, while tailings retreatment has resumed as an adjunct to the processing of kimberlite from underground.

During the three months to March 31, the mine recovered 3 438 ct of diamonds.

This comprised 6 324 t of K4 kimberlite at an average recovered grade of 36 carats per hundred tonnes (cpht), 8 327 t of K6 kimberlite from ventilation tunnel development at an average recovered grade of 8 cpht and 18 307 t of tailings at an average recovered grade of 5 cpht.

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