DiamondCorp nets R6.5m in run-of-mine diamond sales

JOHANNESBURG (miningweekly.com) – Dual-listed DiamondCorp has achieved its highest prices yet after selling two run-of-mine (RoM) diamond parcels, ahead of a larger diamond tender in Antwerp planned for month-end.

About 1 838 ct of RoM kimberlite diamonds and 1 679 ct tailings diamonds were bought by South African diamantaires at an average price of $189/ct and $53/ct respectively, netting the Southern African diamond mining, development and exploration company proceeds of $436 597, or R6.5-million.

The prices obtained, which exceeded the group’s reserve prices during the South African pretender bidding window in the export process, surpassed the $164/ct base case for Lace diamond mine’s RoM kimberlite diamonds as outlined in the company’s resource statement and financial models.

“The higher price is a reflection both of the increase in the plant bottom screen size from 1 mm to 1.25 mm and the recovery of a higher-than-forecast frequency of diamonds greater than 4 ct in size,” said DiamondCorp CEO Paul Loudon in an update to shareholders on Tuesday.

As the group monitored the rate of rough diamond accumulation from the first month of full production from the UK4 block during July, the tender would be rescheduled to maintain regular cash flow until steady-state monthly tender sales had been achieved.

“It is currently expected that two further tenders will take place before regular monthly sales commence at the end of September and the company remains on track to produce more than 75 000 ct of diamonds from kimberlite in 2016,” Loudon noted.

The early cash received from the diamond sales would aid DiamondCorp’s operational cash flow, which remained “tight” owing to unplanned capital expenditure on mining fleet.

DiamondCorp continued to incur high breakdown and repair costs on the existing fleet while refurbishing the three underground dump trucks acquired in April.

However, two of the machines were on schedule to be fully operational by the end of this month.

“These two dump trucks, combined with an additional near-new dump truck acquired at the same time, will give the company the load and haul capacity to deliver to the conveyor belt 30 000 t/m of kimberlite from the UK4 mining block from July onwards,” Loudon said.

He concluded that the final project to achieve the 30 000 t/m rate target was the completion of the 1 500 t underground ore silo and tipping arrangement onto the conveyor belt, which remained on target for handover from the contractor by the end of June.