DiamondCorp says development work has started at the 47 level block cave at the Lace mine after it received the first US$3 million in loans from Laurelton Diamonds, Inc., a wholly-owned subsidiary of Tiffany & Co.
DiamondCorp, a Southern African diamond development and exploration company, said the second US$3 million from the loan is due to be received on April 10.
The Tiffany loan is part of an overall US$36.4 million (£23 million) Lace project financing package.
The main pipe at the Lace mine contains approximately 13.4 million carats of diamonds and a value of more than US$2 billion at an average price per carat of US$160.
The deposit will be mined by block cave mining, with three caves planned over the 25 year lifespan of mine on the 47, 67 and 85 levels (at depths of 470m, 670m and 850m respectively.
The first diamonds from the 47 level block cave development are expected to be recovered in Q3 2014, and the peak funding requirement, including working capital, is expected in April 2015 of US$32 million (£20.3 million).
The costs of establishing the block cave thereafter are offset by revenues from the sale of diamonds recovered from kimberlite mined during development. Approximately 600,000 tonnes of kimberlite is expected to be extracted and processed during this period.
The forecast for revenue from the mine is US$47 million (£30 million) during the 43 months of development before full production of 100,000 tonnes per month is achieved. The 1.2 million tonne per annum Lace mine is expected to produce more than 500,000 carats of diamonds per annum at peak production.
DiamondCorp Chief Executive Officer Paul Loudon says: "We are delighted to be underway with the 47 block cave development which will mark the transition of DiamondCorp from explorer to underground diamond producer. Diamond production from tailings re-treatment will recommence during Q2, initially on one shift while the upgraded processing plant is re-commissioned. We will then have the capacity to ramp up to three shifts in the second half of the year if diamond prices strengthen for small goods."