DiamondCorp, the Southern African diamond mining, development and exploration company, is pleased to provide a project update on activities at the Lace diamond mine in the Free State Province of South Africa.

Highlights


• Production from the first mining block on the 310m underground level at the Lace mine successfully restarted last month and is proceeding at the planned rate of 30,000 tonnes per month.


• August represents the first month of commercial production and processing of kimberlite mined for the month to date is averaging 31 carats per hundred tonnes (cpht), in line with the base case forecast for this first mining block.


• The new rolling stock acquired to ensure production targets could be met is providing excellent availability.


• The quality of the diamonds recovered from fresh kimberlite continues to be impressive, with a good proportion of clean sawable stones in all size fractions, including type IIa diamonds.


• The Company's diamond sales schedule has been revised to commence in Antwerp at the end of August and then continue monthly for the rest of the year.


• A search is underway to recruit a Finance Director and new non-executive directors who can strengthen the Company's Board and deliver improved operational and financial control now that the Company is in commercial production.

Commercial mining has now achieved a rate of 30,000 tonnes per month from the first block on the 310m level of the Upper K4 Block (UK4 Block) at the Lace mine. August is considered the first month of commercial mining after July production was impacted by a two-week shutdown of operations due to a fall of ground accident in a development tunnel, as previously announced.

Management is pleased with quality of the kimberlite being mined and mining for the month of August is averaging 31 cpht, in line with the base case forecast for the first mining block on this level.

In the period from March to July, the Company mined a total of 25,103 tonnes from the west slot between the 290m and 310m levels which provided the open space for blasting of trough material which is now being mined. The west slot is positioned on the contact between the high grade K4 kimberlite and lower grade K8 and K6 material, which for the most part, will not be exploited by the mining method being utilized for the UK4 Block. Approximately 40% of the tonnes mined during slot development was low grade material which had to be moved ahead of commercial mining commencing in the high grade block. Total diamonds recovered from the slot material was 4,601 carats.

Tonnage reconciliation of the slot development indicates that the K4 kimberlite on the contact was averaging 31 cpht, the K6 kimberlite was averaging 9 cpht and the K8 kimberlite was averaging 3 cpht. Mining is now progressing northward predominantly in K4 kimberlite. Mapping of the development tunnels for the trough, and the mined slot area shows that the K4 unit is less diluted with waste rock moving away from the contact and grades should continue to improve as mining of the current block progresses.

The new rolling stock acquired earlier in the year to ensure production targets could be met is providing excellent availability and the older trucks which have been taken out of service will now enter a rebuild programme to ensure back up vehicles are always in place in the future.

The quality of the diamonds recovered continues to be impressive, with a good proportion of clean sawable stones in all size fractions, including type IIa diamonds.

Diamonds recovered from the mining of the slot and diamonds recovered from tailings retreatment operations are currently undergoing the export process to Antwerp for the next diamond sale at the end of August. The sale is expected to be of approximately 7,000 carats, which is slightly lower in total numbers than forecast due to sale of parcels inJohannesburg during the export process in June (which comprised 1,838 carats of run-of-mine kimberlite diamonds and 1,679 carats of tailings diamonds) and the shutdown of operations in July due to the fall of ground accident. Subsequent sales are forecast to be in the order of 9,000-12,000 carats depending on monthly grade fluctuations.

A search is underway to recruit a Finance Director and member of the Board in South Africa who will oversee the existing finance team. Now that the Company is in commercial production, DiamondCorp is also looking to further strengthen the Board through the recruitment of new non-executive directors in each of South Africa and the UK.