DiamondCorp to start underground production next year

| Friday July 2, 2010 00:00

This followed the cessation of surface mining at its Lace mine, owing to the 2009 financial year being dominated by very weak diamond prices. DiamondCorp CEO Paul Loudon said in a statement announcing the company's year-end results, that after Diamondcorp stopped producing diamonds from the old mine tailings at the Lace property, it started focusing on putting into place a number of steps to ease a transition into a fully functioning underground mining operation.

'We remain upbeat about the future sustainability of Lace, and are confident that it will continue to yield real value, especially as we have now seen a recovery in diamond prices and believe in strong market fundamentals going forward.'

The company noted that key to the future success at its Lace mine was the development of a decline to take a 30 000-t bulk sample from the 240-m level.

Independent consultants Snowden had designed the development of the decline and the subsequent sub-level caving mine plan. Loudon said that once the grade had been confirmed, mining activities, planned to go down to 850 m below the surface, would start.About 33-million tons of kimberlite had been outlined in the main Lace pipe between the 240 m and 850 m levels, at a grade of 40 ct for every hundred tons.

'We plan to use sub-level caving at Lace, incorporating 10 000 m of development drives already in place between the 240 and 330 m levels,' explained Loudon.

While the existing vertical shaft was being refurbished, material would initially be hauled to surface up the decline at a rate of about 12 000 t/m.The company noted that activities at Lace during 2010 would concentrate on completing the decline.

In 2011, the 30 000 t bulk sample would be extracted for determination of grade at the initial mining level. 'We will then need to raise additional capital to establish full-scale production from underground at a rate of 1,2- million tons a year during 2011 and to finance further debt repayments and other working capital requirements,' Loudon said. In November, the company raised £600 000 by way of a placement of shares. The funds were applied mainly to complete exploration obligations in Botswana, make an interest payment and cover costs at Lace.

Through the company's 2009 financial year, ended December 31, rough diamond prices started recovering and since then investor and market sentiment had changed completely, said Loudon. 'We were then able to raise a further £7,1-million subsequent to the year-end, through a placement and subscription.' (Miningweekly)