Diamondcorp receives final funding for Kroonstad mine
DIAMONDCORP is targeting a shallow bulge in its Lace kimberlite deposit for exploration drilling to bulk up the resources of its project near Kroonstad.
DiamondCorp, which is listed on the JSE and London’s Alternative Investment Market (AIM), has received the final payment in a R320m funding package to build a mine at Lace.
Lace will be an underground mine, using a block cave method to extract the kimberlite deposit in the Free State. The first block cave will be developed 470m below surface. It will develop three block caves over the 25-year life of the mine up to 850m deep, but there is potential to extend the life.
“The kimberlite is open at depth and also contains a significant bulge between 250m and 360m depth, with the potential to add additional tonnage and diamonds not currently included in the resource statement,” DiamondCorp said yesterday
DiamondCorp CEO Paul Loudon said 2,000m of drilling from an underground platform would be completed by the end of the year when the company could decide what to do with the bulge. If there was a sufficiently rich deposit in the bulge it would have to be mined before the block cave below it is started.
The bulge would be sterilised once the block cave was brought into production, Mr Loudon said. “You have to either mine it first or not at all,” he said. “I’m not going to make out this is more than what it is. On the balance of probability it just may not be mined, but we need the information to hand to make that kind of decision.”
DiamondCorp received the second and final tranche of $3m from Tiffany’s wholly-owned subsidiary, Laurelton Diamonds on Wednesday. The $6m from Tiffany, £4.2m in convertible bonds and R220m from SA’s Industrial Development Corporation have given DiamondCorp the R320m it needs for the mine.
Tiffany has an agreement with DiamondCorp that gives it first right of refusal on diamonds that meet its criteria. This will be once the State Diamond Trader has bought up to 10% of the diamonds to supply the domestic cutting and polishing industry.
Lace has a resource of 13.4million carats, which at a value of about $160 per carat, gives the deposit a value of $2.1bn.
Work started in February on the portal for the decline shafts that will carry a twin-conveyor belt and services. The mine is expected to produce diamonds from the third quarter of next year.
DiamondCorp has bought more equipment and will refurbish it, giving it a mining fleet big enough to complete the development programme.
An existing processing plant at Lace is being upgraded to treat underground material. The plant will be re-commissioned before June and DiamondCorp will treat a large tailings dump at the mine to generate early cash flow.