Name of the Project
Lace diamond mine development project.

Location
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 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.

The Upper K4 (UK4) block is being mined using longhole open stoping while development of the first block cave on the 50 m level continues.

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 production ramp-up from the Upper K4 (UK4) block started in December 2015.

Latest Developments
DiamondCorp has placed its operating subsidiary Lace Diamond Mines (LDM) into business rescue.

The company reported on November 14 that it was consulting a business rescue practitioner for LDM after heavy rainfall on November 11 overwhelmed the Free State-based Lace mine's pumping systems and flooded the 310 m production level to the hanging wall.

It noted that almost 90 mm of rain had fallen at the mine within an hour, which equated to nearly one-third of average rainful at the mine in a year.

More than 10 000 m³ of water is estimated to have entered the mine through the openpit and access ramps.

A longhole drill rig that was operating at the time of the flood will have to be recovered and the electrics rebuilt – a process that is likely to take 12 weeks to complete. Production at the mine could not resume until then.

LDM will appoint a business rescue practitioner in due course.

This comes only a week after DiamondCorp said it would no longer sell the Lace mine, as it had considered earlier, following various production and financial challenges.Key

Contracts and Suppliers
None stated.

On Budget and on Time?
The project is on time.

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