KIM Kimcor

RNS Number:2236R
KimCor Diamonds plc
01 April 2008

                                                                    1 April 2008



                              KimCor Diamonds plc

                          ("KimCor" or the "Company")



                               Operations Update



KimCor is pleased to announce that a number of capital programmes have been
completed and diamond mining and tailings recovery operations that have been
idle for some time have been re-started.



Highlights



*        Phase one modifications to the Company's largest tailings reprocessing
plant ("SMI4"), completed under budget, and the plant re-started;



*        Modifications to increase the capacity and efficiency of the processing
plant at the Newlands mine completed under budget and ahead of schedule;



*        Nooitgedacht alluvial mine expansion completed with both production and
diamond recovery exceeding  expectations;



*        The underground mine development programme at the Blaauwbosch mine is 3
months ahead of schedule. Hoisting of kimberlite ore is expected to commence in
April;



*        Anmic, the Group's cutting and polishing business is achieving a
value-added margin of 10 per cent on all processed rough;



*        Exploration shafts sunk on the 2.33 hectare Itanana pipe in Tanzania
have intersected kimberlite at shallow depths. The Company considers this target
to be highly prospective and intends to expand this work with a view to
obtaining bulk samples;



*        Supermix, the Group's industrial division producing bricks and concrete
has been operating on a cash positive basis for the past 3 months and the trend
is projected to continue.







Martyn Churchouse, CEO of KimCor, commented: "We are delighted with the progress
made across all our operations. The Company is continuing to ramp up production
with a focus on those mines expected to make the largest contribution to diamond
production. Recoverable diamond grades are in line with expectations and the
average sales prices achieved to date have generally achieved or exceeded budget
".



SMI4 tailings reprocessing plant update



Tailings processing using the recently reconstructed plant commenced in March
2008.



Initially the plant will process at a rate of up to 50,000 tonnes per month ("
tpm") to recover an estimated 3,000 carats per month ("cpm") based on an average
recoverable grade of 6 carats per hundred tonnes ("cpht").



During April the second phase of plant construction will be completed following
which the production rate is scheduled to increase to 100,000tpm generating
6,000 cpm.



The Company plans to increase production to approximately 150,000tpm by mid-year
to generate 9,000 cpm.





Newlands mine update



A comprehensive five year mine plan has been designed and has received the
Board's approval.



An underground development programme to provide additional working faces
permitting a substantial increase in mining rates has been on-going since the
start of the year.



As a result, mining rates have increased from 2,500tpm to 5,000tpm. By the end
of April an increase by a further 40 per cent to 7,000tpm is planned.



The Newlands processing plant has been reconstructed and expanded to meet the
increased production rate. The plant has been commissioned and is scheduled to
process up to 32,000tpm comprising 7,000tpm of underground ore and 25,000tpm of
tailings.



At capacity, the plant is expected to generate 19,320 carats per annum from
underground ores based on an average recoverable grade of 23cpht and a further
21,000 carats per annum from reprocessed tailings.



During the development phase, a total of 4,471.3 carats from underground
production have been sold at an average sales price of US$88.51 and  1,998.23
carats from dump reprocessing have been sold at an average sales price of US$70
per carat.





Nooitgedacht Update



The Company has two mining and processing operations running at Nooitgedacht
which have increased the production rate from 10,000tpm to 35,000tpm. Further
increases are planned to take total production to 50,000tpm.



Diamond grades have improved from 0.55cpht to 1.40cpht following modifications
to the KimCor processing plant. The average sales price has been maintained at
US$464.50 per carat. The budget sales price of US$500 per carat is expected to
be exceeded as soon as the Company sells recent diamond production that includes
two stones of notable quality weighing 31.4 carat and 18.5 carat respectively.



Blaauwbosch Update



The rate of progress made on the major underground development programme at the
Mine has been excellent. As a result, the hoisting and processing of kimberlite
ore is expected to recommence 3 months ahead of schedule in late April.



Ore to be hoisted will initially come from the mining of remnant pillars
situated between the 145 level and surface. An estimated 120,000 tonnes of ore
from these levels is expected to return an average recoverable grade of between
16 and 18cpht. The balance of the mine's 1.09 million tonne resource is budgeted
to return an average recoverable grade of 30cpht.



Mining below the 145 Level is scheduled to commence during the third quarter and
is expected to result in the mining rate rising to between 11,000tpm and
14,000tpm.



The board has approved the capital budget for the reconstruction and expansion
of the existing Blaauwbosch processing plant to treat the anticipated increase
in the mining rate. This new plant will also have the capacity to process the
estimated 900,000 tonnes of tailings located at within the mine boundary.



During the period under review, the mine has sold 2,340 carats from underground
ores at an average sales value of US$133.8 per carat and a further 1,402.52
carats at an average sales value of US$47 per carat from tailings reprocessing.



Tanzania Update



The De Beers Joint Venture in Tanzania centres around two kimberlite pipes,
Mahene and Itanana with a combined surface area of more than 9 hectares.



Work has commenced on the Itanana pipe (2.33 hectares) and exploration shafts
have been sunk on 3 sites. Two of the shafts have intersected kimberlite at
shallow depths whilst the third shaft has been deliberately sited on the margin
of the pipe to provide access to mineralisation at depth.



Emphasis remains on the collection of sufficiently large representative bulk
samples to test the pipe.



On the 7 hectare Mahene pipe, 2 exploration shafts have been sunk to 6 and 10
metres. Based on drill data, kimberlite is expected to be intersected at depths
of around 50m below overburden. The current plan remains to establish horizontal
tunnels from the exploration shafts to provide a representative sample for bulk
test work.



Bellsbank Update



Since the commissioning of a dense media separation unit in January, the mine
has produced and sold 1,616 carats at an average sales price of US$54 per carat.
Whilst the Mine now receives a constant supply of water, there remain
limitations on the volume available which in turn affects production rates. As a
result, both the mining and processing strategy at Bellsbank are under review.



Anmic Cutting & Polishing Update



The average sales value per carat for stones processed since January is US$1,346
per carat. Cutting and polishing of mine production continues to generate
healthy value added gross margins. In January this amounted to 45.7 per cent and
in February 38.2 per cent.



Supermix - Industrial Division update



Demand for construction materials continues to rise which is reflected in the
Industrial Divisions improving performance, supplying 32,000 cubic meters of
ready mix concrete and 6.5 million bricks and pavers since the start of the
financial year. Since being acquired in September 2007, Supermix had become
cashflow positive which is projected to continue.





Enquiries:

KimCor Diamonds plc                                           Tel: 020 3178 6179
Martyn Churchouse

Strand Partners Limited                                       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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