DiamondCorp suffer another interim loss

Sep 28 2012 15:13
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Johannesburg - Southern African diamond mine developer and exploration company‚ DiamondCorp (DMC)‚ delivered a headline loss per share of £0.006 in the six months ended June 30 from a loss of also £0.006 in the six months ended 30 June the previous year.

The loss was due to weakening diamond prices in the July-August period in response to macroeconomic challenges in Europe and the US.

The operating loss for the interim period amounted to £1 579 658 from a loss of £1 173 299 in the corresponding period a year ago.

The company said highlights in the six months included SRK Consulting‚ completing an independent engineering report on the proposed 47 level block cave development at the Lace diamond mine.

The report concluded that the continuous trough block caving method was appropriate for the Lace mine to achieve 1.2 million tons a year of kimberlite production.

SRK reviewed DiamondCorp’s capital and operating cost estimates and were satisfied that they were reasonable.

The company said in a JSE announcement that its 74%-owned subsidiary‚ Lace Diamond Mines and the Industrial Development Corporation of SA (IDC) reached an agreement and signed loan documentation whereby the IDC would provide a project loan facility for R220m representing about 77% of the forecast peak funding requirement for the 47 level block cave development.

It said weakening of diamond prices in the July-August period in response to macroeconomic challenges in Europe and the US resulted in management taking a decision to shut down the Lace processing plant and commencing the required plant upgrades while diamond prices were weak.

As a consequence‚ full scale production of diamonds from tailings retreatment will not resume until the first quarter of next year.

“The period under review saw us make significant steps towards our goal of being a long-term diamond producer. Having secured the majority of the project finance required for the Lace underground development‚ we look forward to finalising the balance of the financing and commencing underground development as soon as possible‚" said DiamondCorp CEO Paul Loudon.

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