A watershed year ahead for DiamondCorp, says CEO

JOHANNESBURG (miningweekly.com) – As Aim-listed DiamondCorp wraps up the 2015 financial year, the diamond group is looking ahead to 2016 as a watershed year that will see the company officially transition from a developer into a diamond producer.

DiamondCorp, which posted a net loss of £2.41-million for 2015, also restarted the commercial sale of diamonds from its 74%-owned Lace mine, in the Free State, for the first time since 1931.

“This will be a watershed year for the company as we finally make the long and difficult transition to diamond producer,” said CEO Paul Loudon on Wednesday.

DiamondCorp chairperson Euan Worthington added that the company had hoped that 2015 would be the year Lace mine resumed commercial operation, however, unforeseen “bumps” had set the timeline back one year.

The company had completed its first diamond tender and was now finalising mine development prior to full commercial production of 30 000 t/m of kimberlite from July.

“While taking longer than ever hoped, DiamondCorp has now joined the ranks of diamond miners, with more than 38-million tonnes of kimberlite having been identified for mining,” he said.

DiamondCorp worked hard in the past year to update the group’s confidence in the resource; the first sale from this resource in 85 years occurred during March this year.

Loudon pointed out that, within the 38.49-million tonnes of resource, 2.21-million tonnes of the UK4 Block had been classified as a mineral reserve between the 230 m and 370 m levels.

“This reserve comprises 1.43-million tonnes of K4 in the probable category grading 36.2 carats per hundred tonnes (cpht) and 780 000 t of low-grade K6 kimberlite in the probable category at a grade of 9 cpht,” he noted.

“The whole block could be mined for 60 months at a rate of 35 000 t/m and generate a positive net present value of R133.3-million and a robust internal rate of return of 59%.”

The company intended to focus on mining the high-grade K4 kimberlite within this reserve first, while the first block cave was established on the 500 m level.

“We can now look forward to unlocking the full value of this exciting long-life mine,” Worthington concluded.