KIM kimberley diamond company nl.

kimberley announces ellendale expansion

  1. 4,756 Posts.
    Media Release - Kimberley Announces Ellendale Expansion

    KIMBERLEY DIAMOND COMPANY NL. 2002-11-29 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    Kimberley Diamond Company NL (ASX: KIM) today announced plans for a
    $21 million expansion of its Ellendale Diamond Project in Western
    Australia including the installation of a new 2.2 million tonne per
    annum production plant to significantly upgrade its production
    capacity.

    The expansion project will see diamond output from Ellendale increase
    to 176,000 carats in calendar 2003 and further to 390,000 carats in
    2004. Production will then continue at a sustainable level averaging
    in excess of 295,000 carats per annum until 2008.

    This is based on newly classified resources in the South East Lobe of
    Ellendale Pipe 4 only (which were vetted by Snowden Mining Industry
    Consultants Pty Ltd) and resources to a depth of 70 metres in
    Ellendale Pipe 9.

    Production is likely to continue for at least 10 years with the
    mining of other ore zones within Pipe 4 and potentially resources
    below 80 metres in Pipe 4 South East Lobe. Kimberley's current Group
    Production Summary forecasts diamond production of 167,000 carats and
    156,000 carats respectively in 2009 and 2010.

    Kimberley said the expansion plan and associated 5-year Production
    Plan is based on a Study which involved a range of independent
    consultants including Rockwater, Australian Tailings Consultants, BEC
    Engineering, DJ Claassen and others.

    Kimberley commenced Stage 1 mining and processing operations at
    Ellendale in July this year with a 700,000 tonne per annum treatment
    facility which is currently treating near-surface resources from
    Ellendale Pipe 9.

    The Stage 2A expansion will see the installation of a new production
    plant at Ellendale Pipe 4, 15 kilometres to the south, capable of
    treating over 2.2 million tonnes per annum which will yield over
    335,000 carats in its first year of operation.

    The new production facility will process a resource inventory for
    Pipe 4 totalling 21.9 million tonnes at an average grade of 9.3
    carats per hundred tonnes (9.3 cpht) and containing 2.04 million
    carats (with an in-situ value of A$277 million).

    This resource includes very high grade near surface zones of up to
    18.5 cpht for Pipe 4 N-NW, 16.1 cpht for Pipe 4 NE and 25.2 cpht for
    Pipe 4 SE, providing an ideal cash flow scenario with the mining
    sequence to be scheduled accordingly. The Stage 2A operation will be
    extended from 3.8 years to at least 10 years by subsequently mining
    the Pipe 4 North West Lobe and Pipe 4 satellite, using the Stage 2A
    plant and infrastructure.

    Production will continue at the present Pipe 9 operations at the
    current rate of 700,000 tonnes per annum until September 2004, when
    this plant may be replaced by a production facility capable of
    processing 2.2 million tonnes per annum. The existing 700,000 tonne
    per annum plant would then be relocated to bulk sample
    diamond-bearing alluvial gravels from the nearby Terrace 5 and
    J-channel areas.

    This would increase Kimberley's total processing capacity at
    Ellendale to approximately 5 million tonnes per annum by the end of
    2004. The new pipe 9 production plant would treat a resource
    inventory totalling 14.7 million tonnes grading 5 cpht to 70 metres
    in Pipe 9.

    Kimberley's Chairman, Mr Miles Kennedy, said the Stage 2A Study
    showed that economies of scale achieved through the Stage 2A
    expansion would result in a significant reduction in direct cash
    operating costs at Ellendale following the expansion to A$7.72 per
    tonne mined and processed. This compares with an in-situ value of
    A$17.19 per tonne.

    "We expect to achieve operating costs of A$61 per carat produced
    following the expansion, against a forecast average diamond value of
    A$136 per carat," Mr Kennedy said. "This represents a strong margin
    which underpins the robust economics of the expansion project."

    Kimberley's Group Production Summary, based on the results of the
    Stage 2A Study, shows revenue from the Ellendale operation increasing
    from A$31.4 million for calendar 2003 to A$58.8 million in 2004, and
    sustained at an average of A$45 million per annum until 2008. (This
    is based on diamond values of US$140 per carat from Pipe 9 and US$79
    per carat from Pipe 4, and an A$/US$ exchange rate of 0.58).

    The study also concludes that a pay back period of nine months can be
    achieved on the estimated $21 million capital cost for expansion
    project, key components of which include:

    ? installation of a new 300 tph Dense Media Separation (DMS) plant at
    Pipe 4;

    ? expansion of the existing Final Diamond Recovery unit at Pipe 9,
    which will treat all concentrates from Pipes 4 and 9;

    ? upgrading the all-weather Roberts Road between Pipes 4 and 9;

    ? upgrading the accommodation village at Ellendale 9 to accommodate
    175 people;

    ? construction of a new office block at Ellendale 9;

    ? lengthening the existing all-weather air strip at Ellendale 9; and

    ? development of a new borefield at Ellendale 4 and other services as
    required.

    Mr Kennedy said two separate South African financiers had expressed
    interest in providing the finance required for the Stage 2A
    expansion, subject to completion of their due diligence of the Study,
    which can now be provided.

    "Pending the finalisation of financing arrangements, we plan to
    commence detailed planning and procurement of the expansion project
    during the first quarter of 2003," he said.

    "The implementation of this expansion represents a key step for
    Kimberley," Mr Kennedy said. "The benefits that will flow in terms of
    reduced operating costs and increased cash flows will significantly
    enhance Kimberley's position as an independent diamond producer."


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    Fig Jam

    I don't hold Kim, this company has huge potential IMHO
 
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