Diamcor Mining Inc. [DMI-TSXV; DMIFF-OTCQB] has recovered a 45.15-carat gem-quality rough diamond from the processing of quarry material at the 70%-owned Krone-Endora mine at Venetia project, South Africa.
This 45.15-carat large rough diamond in the specials category (over 10.8 carats) follows the previously recovered 72.53-carat gem-quality rough diamond announced on February 21, 2023. The recovery of this second large gem-quality rough diamond, along with the pending sale of approximately 2,000 additional carats delivered for tender and sale, is expected to positively impact revenues and offset the lower-than-anticipated current processing volumes associated with the continuing power load-shedding currently being experienced in South Africa.
The company is also pleased to provide a further update on the progress on the procurement and installation of a comprehensive long-term supplementary power solution at the project. Various options were evaluated by the company’s operational management team throughout 2022 in anticipation of potential issues with consistent power supply in South Africa, with the main focus being to provide the project with systems to eliminate potential downtime and lost processing time at the project.
The chosen system will incorporate various items, including a large battery energy storage system (BESS) element, power conditioning, switching systems and generator backup systems. The solution has been designed to provide the project with a globally recognized Tier 1 energy management system to provide a long-term seamless uninterrupted transition between traditional grid power supply, battery systems and generator backup systems.
In addition, the system will provide power conditioning to clean all power being supplied to the project’s processing plant, which is expected to provide significant benefits, including increased reliability of electronics while lowering maintenance on the processing plant’s electrical systems. The company is expediting these efforts due to the current elevated issues surrounding the inconsistent supply of power in South Africa by Eskom, the national power supplier. The company is targeting the installation of these systems to be completed prior to the end of the next quarter.
Highlights: Continued tender and sale of rough diamonds: While the total carats of rough diamonds tendered and sold in the current quarter continues to be lower than anticipated due to widely reported increases in daily load-shedding/power outages throughout South Africa, continuing efforts to maximize recoveries and the continued recovery of larger gem-quality rough diamonds in the specials category are expected to offset this issue in the near term.
Average dollar per carat increases in period: The combination of the project’s relatively high percentage of gem-quality diamonds recovered to date, along with the recent recovery of two large gem-quality special rough diamonds, is expected to have a positive impact on the average dollar per carat for the current period. Tender and sales totalling 1,538.62 carats of rough diamonds in the current quarter to date have generated gross revenues of US$980,696.08, resulting in an average dollar per carat of US$637.39.
Recovery of large gem-quality rough diamonds: Even while operating at restricted processing levels, the company’s recovery of the previously announced 72.53-carat gem-quality rough diamond and the recent recovery of the above mentioned 45.15-carat gem-quality rough diamond in the current quarter continue to confirm the potential for these types of large rough diamonds to be recovered from the project’s deposits and provide positive impact to gross revenues.
Continued rough diamond recoveries: The company continues to process material and manage inconsistencies in power supply delivering approximately 2,000 carats of additional rough diamonds for tender and sale. Additional rough diamonds recovered prior to March 31, 2023, will either be tendered and sold in a final tender and sale of the current period, or held as stock on hand at the end of the period, and tendered in the company’s next quarter.
Continued progress on the procurement and installation of power systems: The company’s operational team continues to advance the previously announced installation of comprehensive systems aimed at mitigating the long-term impact any potential load-shedding has had on the project. Installation of this system is targeted for completion at the end of the company’s next fiscal quarter.
“The recent recovery of another larger gem-quality 45.15-carat rough diamond will provide further revenue during the period, and additional confirmation of the project’s potential to continue recovering these larger rough diamonds,” stated Dean Taylor, Diamcor chief executive officer. “We certainly look forward to the near-term implementation of the backup power systems to remove current limitations on processing volumes, and with that, return our focus to efforts aimed at expanding our understanding of the potential deposits on the greater areas of the project.”