KimCor Diamonds plc - Capital Program and Production Update

RNS Number : 4385W
  KimCor Diamonds plc
  11 June 2008


11 June 2008

KimCor Diamonds plc
('KimCor' or the 'Company')


Capital Program and Production Update

KimCor (AIM: KIM), the AIM quoted diamond mining company is pleased to provide
an update and progress report on the expansion programmes at the Company's
mining operations in South Africa.

Highlights

*     Diamond production during May totalled 5,173 carats compared with previous
average monthly production of 1,200 carats;

*     SMI4 production significantly exceeded expectations

*     Newlands and Blaauwbosch mine diamond recoveries were in line with budget

*     SMI4 expansion remains on schedule for a significant further increase in
production rate within 6 weeks

*     Newlands mine to double mining and processing capacity during June

*     Blaauwbosch mine on schedule for a four fold increase in kimberlite mining
during June

*     The Company remains on target to achieve its objective of producing an
annualised diamond production of 150,000 carats for 2008;

*     May production being held in inventory for sale with June production


Martyn Churchouse, CEO of KimCor commented 'The impact of the capital expansion
programmes on the mines is now starting to be reflected in Group diamond
production. The Company remains on schedule to complete further expansions at
SMI4, Newlands and
Blaauwbosch resulting in the production and recovery of 15,000 carats per month.
At this level, we will exceed our target of an annualised 150,000 carats during
the current year.

During May we have also seen a further reduction in operating costs on every
mine and the projected further increases in production and processing rates
should see costs continue to fall'.


SMI4

During May SMI4 diamond recovery averaged 12.23cpht against a budget of 6cpht.

The new equipment required to take SMI4 processing rates up to 150,000 tonnes
per month ('tpm') will be installed and commissioned by the end of July 2008.

Newlands

Newlands mine achieved the budgeted recoverable grades for both kimberlite and
tailings during the month. A new crusher circuit was installed during late May
and the operation is expected to process 7,000tpm of kimberlite and 23,000tpm of
tailings
during June 2008.

Blaauwbosch

The hoisting from underground and processing of kimberlite at Blaauwbosch mine
is expected to increase from 100 to 400 tonnes per shift in June following the
completion of a new ore pass that has been a bottleneck to production. This new
ore pass is
scheduled for completion by 16 June.

Nooitegdacht

The terms of a new strategic alliance are under negotiation with a South African
based diamond mining company with particular expertise in large-scale alluvial
mining. Initially the proposal would see the existing KimCor processing plant
operate at
capacity of 45,000tpm with the introduction of a new fleet of haul trucks and
excavators for mining. The medium-term objective would be to invest in mobile
pan processing plants to replace the existing plant.


Enquiries:

    KimCor Diamonds plc                                Tel: 020 3178 6179
Martyn Churchouse

    Strand Partners                                            Tel: 020 7409 3494
Simon Raggett
Warren Pearce
Victoria Milne-Taylor


Bishopsgate Communications Ltd         Tel: 020 7562 3350~
Maxine Barnes
Nick Rome

This information is provided by RNS
The company news service from the London Stock Exchange

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