KIM Kimcor

RNS Number:0658H
KimCor Diamonds plc
06 November 2007

                                                                06 November 2007


                              KIMCOR DIAMONDS PLC
                          ("KimCor" or the "Company")


                             DIAMONDS SALES UPDATE


KimCor Diamonds Plc, the mid-tier diamond producer, is pleased to announce the
results of diamond sales from the Group's five producing mines together with
various on-going bulk sampling programmes.



Highlights

  * Sales value exceeding budget for Nooitgedacht, Newlands Blow 3 and
    Newlands tailings production - sales of exceptional stones included a 41.7
    carat stone sold for US$7,220 per carat;

  * Sales value in line with budget projections for Blaauwbosch underground
    production, Blaauwbosch tailings and SMI4 tailings reprocessing operations;

  * Sales from Bellsbank in line with recommended sales value per carat
    provided by recent Competent Persons Report ("CPR") published in August 2007
    by Wardell Armstrong International;

  * Expansions at Newlands and Blaauwbosch on schedule for completion in
    December 2007 and April 2008 respectively; and

  * Board to decide on capital expenditure to increase production at SMI4
    following the recent purchase of 15.45 million tonnes of tailings by
    Superkolong Holdings (Pty) Limited, a subsidiary of KimCor.



Based on the planned expansion of mining operations and the increase in
processing rates of both underground ores and tailings at Newlands and
Blaauwbosch, together with increased production at SMI4 and Bellsbank, the Group
is on target to achieve annualised production of approximately 200,000 carats
during 2008 as indicated in the CPR.

Martyn Churchouse, Chief Executive Officer commented, "The expansion programmes
on the various mines are progressing well and remain on schedule and within the
capital budget.

"The effects of the increased production and expansion of the mines will be felt
in January 2008 once the upgraded Newlands processing plant is commissioned and
at regularly intervals thereafter as Blaauwbosch and then SMI4 come on-stream.
The sales value being achieved on diamond production is very encouraging and we
are pushing to complete the capital projects as quickly as possible to
capitalise on this value".



Nooitgedacht mine ("Nooitgedacht")

Mining recently recommenced at Nooitgedacht following a temporary shutdown to
introduce a new mining strategy and to reconfigure the processing plant to
optimise delivery of aggregate to the Group's industrial division for brick and
concrete production; which represents an important synergy for the group.  The
reconfigured plant has a nameplate capacity of 10,000 tonnes per month ("tpm")
of gravels.

Between February 2006 and October 2007, the operation ran for a period of 11
months, returning 2,651 carats sold for a total consideration of US$1.44
million;  an average price of US$542.1 per carat. This average sales price
exceeds the CPR estimates by US$42.1 per carat. Sales of exceptional stones
included: a 41.7 carat stone sold for US$7,220 per carat; a 16.6 carat stone
sold for US$2,154 per carat; and a 10.9 carat stone sold for US$1,621 per carat.
At present, a further 29.1cts remain in the inventory.

Recent production following the restart of operations indicates an average
recoverable grade of approximately 0.7 carats per hundred tonnes ("cpht"). The
occurrence of exceptional stones is an important characteristic of the
Nooitgedacht deposit.



Blaauwbosch mine ("Blaauwbosch")

Blaauwbosch remains in the expansion stage with emphasis on underground
development to access additional working faces. KimCor is also embarking on an
expansion of the existing processing plant with a view to treating upwards of
11,000tpm of primary ore by Q1 2008 plus 10,000tpm of stockpiled tailing
resource.

The plant upgrade is expected to be completed by the end of Q1, 2008 and will be
commissioned in April 2008.



Sales of underground production

Despite the emphasis on development, a small but continuous tonnage of
underground ore is being mined and processed. For the period January to October
2007, a total of 2,886 carats have been sold for a total consideration of
approximately US$320,107, an average sales price of US$110.9 per carat, in line
with CPR estimates. Sales of exceptional stones included: a 9.7 carat stone
valued at US$2,500 per carat, a 2.93 carat stone valued at US$2,000 per carat,
and a 27.9 carat stone awaits valuation. In addition, a further 179.8 carats
remain in the inventory.

The CPR reports an average recoverable grade of 30cpht for the kimberlite.



Sales from tailing reprocessing

The CPR projects that, with the addition of a crushing plant in the tailings
reprocessing circuit, recoverable grades from tailings will rise to 8cpht from
the present 5.1cpht. A total of 962.6 carats were generated from test work
undertaken over a seven month period up to and including October 2007.  This
production has been sold for a total consideration of approximately US$47,200 at
an average sales value of US$49 per carat; in line with the CPR estimate of
US$50 per carat.

At full production of a planned 120,000 tonnes of tailings per annum, the
upgraded processing plant is projected to recover an additional 9,600 carats per
year for a consideration of approximately US$480,000.


Newlands mine ("Newlands")

The bulk of new underground development has been completed, allowing the mine to
double mining rates. Work is due to commence shortly on the upgrade of the
existing processing plant to accommodate an increase in underground production
to approximately 7,000tpm of ore plus 15,000tpm of tailings material.



Sales from underground production

Multiple sources of underground ore will contribute to a combined tonnage of
7,000tpm, with an average projected grade of 23cpht once the plant upgrade has
been completed.

An 8 month trial mining period at Newlands on Blow No 2 has resulted in sales of
3,793 carats for a total consideration of approximately US$381,440, at an
average sales price of US$100.6 per carat which is significantly higher than the
CPR estimated average sales price of US$85 per carat. Sales of exceptional
stones included: a 6.0 carat stone sold for US$4,314 per carat; a 5.2 carat
stone valued at US$984.6 per carat; a 2.71 carat stone valued at US$2,000 per
carat selected for cutting and polishing; and 2.25 and 2.66 carat stones valued
at US$1,850 and US$1,684 per carat respectively, and both removed from tender
for cutting and polishing.

In addition, bulk sampling of the recently accessed Blow 3, has produced 398.1
carats, generating US$35,275 at an average sales value of US$88.60 per carat,
again in line with CPR expectations.

A further 475.7 carats remain in the inventory awaiting sale.



Sales from tailing reprocessing

The current processing circuit only crushes kimberlite ore down to -16mm in size
with the result that diamonds remain locked in the oversized (+16mm) ore
fragments. Processing test work carried out on tailings produced from recently
processed underground ore has returned an additional 7-9cpht over and above the
recovery achieved through the processing of the +16mm ore fraction.

A total of 438.9 carats generated from bulk test work sampling of tailings have
been sold for a consideration of approximately US$26,960, at an average sales
price of US$61.4 per carat, significantly in excess of the CPR estimated sales
value of US$50 per carat. Based on the grades achieved during test work, the
15,000tpm of tailing scheduled for processing from stockpiles as from January
2008, are projected to yield an additional 14,400 carats per annum, generating
approximately US$792,000 of additional revenue at an average sales price of
US$55 per carat.



SMI4 Superkolong ("SMI4")

During the 10 month period ending August 2007, SMI4 produced 14,760 carats
generating US$641,458 at an average sales value of US$43.5 per carat. Between
May and August 2007, prices improved to an average of US$60.2 per carat,
reflecting a global uplift in diamond prices.

The average recoverable grade during the review period was 4.8cpht with a peak
of 8.8cpht. Improvements in the processing plant design were made in June 2007,
with the result that grades for the last 3 months rose to an average of 6.8cpht,
in line with the CPR.

Further improvements in plant design are to be implemented and KimCor plans to
increase production rates from the historical 32,000tpm to 150,000tpm with the
result that diamond production will increase approximately fivefold to 108,000
carats per annum. Further sales price improvement is expected reflecting the
ability of the Group to sell significantly larger parcels on a regular and
reliable basis to preferred buyers.

The recent acquisition of a 26.4% share of diamondiferous Tailing Mineral
Resources (TMRs) in Kimberley from De Beers Consolidated Mines Limited gives
SMI4 a minimum additional life of 10 years.



Bellsbank mine ("Bellsbank")

KimCor has incorporated a Dense Media Separation Unit ("DMS") into the plant
circuit that will increase processing rates.

At present the DMS unit is being commissioned and a total of 75 tonnes of
diamond bearing concentrate has been stockpiled awaiting final processing. This
processing will take place as soon as the on-going expansion of the Group's
centralised final recovery section in Kimberley has been completed. The
expansion is required to accommodate both the current and projected further
increase in diamond bearing concentrates generated from the Group's mining
operations. A total of 179.85 carats remain in inventory awaiting sale.

Following the introduction of the new mining programme at Bellsbank, and up to
the date of closure of the plant for the installation of the DMS unit, the
operation processed 81,098 tonnes of tailings and recovered 3,141 carats at an
average recoverable grade of 4.0cpht, in line with the recommendations made in
the CPR.

Since commissioning, the Bellsbank operation has produced a total of 4,475
carats of gem quality diamonds at an average sales value of US$110.8 per carat
generating revenue of US$495,676. A further 1,770cts of 'industrial' product
derived from the processing of waste material realised US$30,618. Sales of
exceptional stones included a 14.9 carat stone sold for US$2,320 per carat and a
5.75 carat stone that sold for US$2,931 per carat.

The Board believes that the modest diamond output from Bellsbank caused by water
shortages and, therefore, limited opportunity for continuous uninterrupted
production will become an historic problem once the DMS unit is fully
commissioned. In addition, the ability to sell large quantities of smaller, gem
quality diamonds from the combined production of Bellsbank and SMI4 on a regular
and consistent basis will enable the Company to partner with buyers specifically
seeking small stones in larger quantities which could command a premium.


                                   ---ENDS---

Enquiries:

KimCor Diamonds plc                                       Tel: 020 7290 1400
Martyn Churchouse


Strand Partners Limited                                   Tel: 020 7409 3494
Simon Raggett
Warren Pearce


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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