Kopane Diamond Developments Plc wishes to announce the following information to its shareholders.
Investment in Liqhobong
The Company announced on 26 November 2009 that it had extended the terms of an Exclusivity Agreement with an interested party until 15 December 2009 because the party wished to progress to terms regarding their potential investment in the Liqhobong Project. During the second half of 2009, the diamond market has shown strong signs of recovery and the Company has recently received expressions of interest at a corporate level from other organisations which will be further investigated to determine whether they would better serve the development of the Main Pipe and the interests of shareholders. Therefore, the Board of Kopane does not believe it to be appropriate to further extend the Exclusivity Agreement at this time.
The Company believes its outlook for 2010 to be favourable due to the following factors:
The market price for rough diamonds has improved considerably since the first quarter of 2009, at which time prices had fallen to approximately 50% of those achieved in the previous year and, subject to resilience of price recovery, it is likely to be economic to recommence diamond production at the small scale Satellite Plant at Liqhobong. Production would focus on the K2 and K5 facies of the Main Pipe which are known to contain high value and bonanza stones. Production would also provide further value-adding information better to allow the Company to understand pricing and the incidence of high value stones. A significant proportion of sales revenues received from production until early December 2008 were from high value diamonds. The $86 per carat run of mine valuation obtained in September 2008 does not include the positive impact of large and bonanza stones, which could provide material economic enhancement to the project value.
The project to connect grid electricity to Liqhobong is essential to the ability of the Company to expand production and it is planned that construction of the power line will commence in 2010, to allow connection of electricity to site in 2011. This power supply will greatly enhance the project value of Liqhobong.
The Main Pipe kimberlite of 90.7 million tonnes, with a recently announced increased overall grade of 34.3 carats per hundred tonnes, is considerably larger than previously estimated and the Company is therefore reviewing the optimum way of mining and recovering the diamonds, as part of the remaining work required under the Definitive Feasibility Study.
Frank Scolaro Chairman of the Company commented today: "The continued interest from various organisations in the Company and its main asset at Liqhobong is further independent support to its potential as a significant producer of diamonds. The Company is continuing and opening new discussions to explore the best way of funding and developing its assets to maximise shareholder value."
About Kopane
Kopane is a diamond producer, developer and explorer with core projects at Liqhobong in Lesotho, Southern Africa. As a result of the successful development of the operations at Liqhobong and the delineation of a substantial geological resource in the Main Pipe, LMDC was, in February 2007, granted a 20 year mining licence for the Main Pipe by the GoL. The Liqhobong operations are operated by Liqhobong Mining Development Company ("LMDC") which is 75% owned by Kopane and 25% by the Government of Lesotho ("GoL").
LMDC produced over 350,000 carats of diamonds since operations commenced at the end of 2005 until suspension of production in December 2008. The principal development project is the Main Pipe which has the potential to produce at a rate of one million carats per annum.
Kopane also has a joint venture to explore for diamonds in Finland, managed and financed by Mantle Diamonds Limited.
The Company is listed on AIM (and is also traded through the Plus Market), ticker symbol: KDD.
For further information contact:
For further information contact: Kopane Diamond Developments Plc
Frank Scolaro, Chairman
James Cable, Finance Director
+44 (0) 20 7963 9590
FinnCap
Matthew Robinson/Ed Frisby
+44 (0) 20 7600 1658
