News

June 17, 2008

Diamondcorp Could Be A Natural Bolt On Acquisition For Existing Producers

By Our Man In The City

Fourteen months ahead of schedule, South Africa-based Diamondcorp is gearing up to initiate underground mining at the Lace diamond deposit. By the end of the third quarter, it will have reached kimberlite rock and be producing at the rate of 1,000 tonnes per day. Financing is close to completion and expansion plans are already under consideration. For managing director Paul Loudon, it’s a welcome relief after Diamondcorp spent the past year struggling in the face of power outages and operational problems with a crusher that’s used to treat tailings.

Mining consultant SRK originally proposed that Diamondcorp should spend R350 million on refurbishing an old shaft at Lace, adding a second access to comply with South Africa mining laws. Bulk tests, said SRK, would take 14 months and then another 12 months would be spent in development before production started. Mr Loudon and his team decided on an alternative strategy. “We were concerned about going underground beneath a water-filled section. We didn’t want to risk any possible water leakage...