DiamondCorp Botswana Drilling Unearths Encouraging Results

DiamondCorp (LON:DCP) this morning revealed that the J-05 kimberlite in Botswana shows similar characteristics to the diamond bearing volcanic rock at the nearby Jwaneng mine.
The discovery comes after the company sank five boreholes into the target area that intersected what the company termed “coherent kimberlite” at vertical depths of up to 218 metres.
Samples are now being shipped to Canada for analysis, while drilling will continue on J-05 to confirm the size of the DiamondCorp kimberlite.

At around two hectares, J-05 is on a similar scale to the company’s Lace mine diamond mine in South Africa.

However management will hope the grade and carat has more in common with Jwaneng, which is just 9 kilometres away.
The Debswana-owned operation is the richest diamond mine in the world on a revenue per tonne basis and produces up to 25 per cent of De Beers’ global production.
And Jwaneng’s grade and carat are five to ten times richer on a revenue per tonne basis than DiamonCorp’s Lace project.
Managing director Paul Loudon said: ‘We are pleased that J-05 is emerging as a kimberlite with the right geological features and potential to carry economic diamond grades.
‘We look forward to updating the market with results from the microdiamond analysis in about eight weeks time.’
The Botswana area was acquired via the ‘use it or lose it’ laws and DiamondCorp earn a 77.5 per cent share once it completes a definitive feasibility study on at least one of the kimberlites over a period of five years.
Of the five targets, the three most prospective were surveyed with ground gravity and magnetics last year.
However the company’s main focus currently is Lace, which was first mined early in the 20th century.
The Lace pipe has been drilled by the company to a depth of some 855 metres, with indications that there are 35 million tonnes of untapped kimberlite between the current 240 metre base level and 855 metres.
Around 500,000 carats are expected to extracted annually once Lace is fully up and running and this should produce a mine life of around 25 years.
During 2011 Loudon says the company will be mining at 13,000 tonnes per month while setting up the sub-level caving underground mine plan and refurbishing the existing vertical shaft, which will be used for hoisting and allow the decline to be used for men, materials and ventilation.
‘By the Q1 next year we will have accessed our resource at the 240-metre level. We will need to raise money in 2011 to bring production up to full scale of 1.2 million tonnes per annum by the end of 2011,’ Loudon said recently.
House broker Cenkos calculates that Lace would generate cash-flows of £3 million from 2012, rising to approximately £15 million from 2015 - assuming annual production of 230,000 carats from 2012 and 400,000 carats by 2015.