Johannesburg - Developent activities at London and JSE-listed dimaond miner Diamondcorp’s (DMC) Lace Mine have commenced for the 47 level block cave.
This follows the receipt of the first US$3 million tranche of loan funds from Laurelton Diamonds‚ Inc. - a wholly-owned subsidiary of Tiffany & Co.
The second US$3 million tranche is scheduled to be paid on 10 April 2013‚ the company said on Thursday.
The combination of funding through the Tiffany loan‚ GBP4.2 million of convertible bonds issued in December 2012 and R220 million (GBP15.6 million) from the Industrial Development Corporation of South Africa‚ announced in September last year‚ completes the R320 million (GBP23 million) Lace project financing package.
The Main Pipe at the Lace mine contains 33.1 million tonnes of kimberlite indicated and inferred to a depth 855m containing approximately 13.4 million carats in both resource categories at an average grade of 40.1 carats per hundred tonnes. The resource has an in-ground value in excess of $2 billion at $160 per carat‚ the company said.
The SRK Independent Engineering Report on the 47 level block cave development published in March 2012 estimated the total development cost‚ including working capital and a 15% contingency on capital and development costs‚ at R384 million.
The first diamonds from development are expected to be recovered in Q3 2014‚ and the peak funding requirement‚ including working capital‚ is expected in April 2015 at R286 million when blasting of the slot drive and doming starts to deliver significant tonnage 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.
Approximately 600‚000 tonnes of kimberlite is expected to be extracted and processed during this period. Anticipated revenue from the mine is forecast at R421 million (GBP30 million) during the 43 months of development before full production of 100‚000 tonnes per month is achieved.
The 1.2 million tonne per annum Lace mine is expected to produce more than 500‚000 carats of diamonds per annum at peak production.
DiamondCorp's CEO‚ Paul Loudon said: “We are delighted to be underway with the 47 block cave development which will mark the transition of DiamondCorp from explorer to underground diamond producer. Diamond production from tailings re-treatment will recommence during Q2‚ initially on one shift while the upgraded processing plant is re-commissioned. We will then have the capacity to ramp up to three shifts in the second half of the year if diamond prices strengthen for small goods.” - I-Net Bridge