P I P E T O P R O S P E R I T Y February · PDF file-240m level for sub level cave development...

P I P E T O P R O S P E R I T Y

February 2010

DisclaimerThe document attached hereto and the presentation of which it forms part (together the “Materials”) have been prepared by DiamondCorp plc (“DiamondCorp” or the “Company”) and are confidential and personal to you and the Materials are furnished to you as background information to provide a basis for potential investors to consider whether to pursue an acquisition of shares in the Company and do not constitute an offer or invitation for the sale or purchase of any securities, nor do they, nor do they purport to, set out or refer to all or any of the information an investor might require or expect in making a decision as to whether or not to deal in shares in the Company.

The Materials do not constitute and are not a prospectus or listing particulars (under either the Prospectus Regulations 2005 (as amended), the Financial Services and Markets Act 2000 (“FSMA”) or the Prospectus Rules of the Financial Services Authority) nor do they comprise an AIM admission document for the Rules of AIM, a market operated by the London Stock Exchange plc and should not be construed as such. No representation or warranty or other assurance, express or implied, is made by or on behalf of the Company or any of their respective directors, officers, employees, advisers or any other persons as to the fairness, accuracy or completeness of the information or estimates or opinions or other statements about the future prospects of the Company or any of their respective businesses contained in the Materials or referred to in the presentation given in connection therewith and no responsibility, liability or duty of care whatsoever is accepted by any such person in relation to any such information, projection, forecast, opinion, estimate or statement.

The Company’s Nomad Cenkos Securities plc (“Cenkos”) has not approved the Materials as a financial promotion for the purposes of section 21 of FSMA or otherwise.

Members of the public are not eligible to take part in the presentation or be provided with the Materials. In the United Kingdom, the Materials are only being directed at persons (i) reasonably believed by the Company to be investment professionals within the meaning of paragraph (5) of Article 19 or to high net worth companies or unincorporated associations within the meaning of paragraph (2) of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529), as amended and (ii) who are “qualified investors” within the meaning of section 86(7) of FSMA or otherwise in circumstances that will not have resulted and will not result in an offer of transferable securities to the public in the United Kingdom within the meaning of section 102B of FSMA. The investment or investment activity to which the Materials relate are available only to such persons and will be engaged with only with such persons. If you are not such a person (i) you should not take part in the presentation and nor should you have received the Materials, (ii) please return this document to the Company’s registered office or representative at the presentation as soon as possible and take no other action, (iii) please leave the presentation immediately after returning the Materials and (iv) you may not rely on or act upon the matters communicated by the Materials.

Neither this presentation nor any copy of it or any of the Materials may be (i) taken or transmitted into the United States of America, (ii) distributed, directly or indirectly, in the United States of America or to any US person (within the meaning of regulations made under the Securities Act 1933, as amended), (iii) taken or transmitted into or distributed in Canada, Australia, the Republic of Ireland or the Republic of South Africa or to any resident thereof, or (iv) taken or transmitted into or distributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this document in other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

The Materials are being made available on the basis that the recipients keep confidential any information contained therein, whether orally or in writing, in connection with the Company. The Materials are confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of Cenkos, as agent for the Company.

By attending the presentation and/or accepting a copy of the Materials you agree to be bound by the foregoing provisions.

Forward-looking Statements

The Materials contain forward-looking statements. These statements relate to the future prospects, developments and business strategies of the Company and its subsidiaries (the “Group”). Forward-looking statements are identified by the use of such terms as “believe”, “could”, “envisage”, “estimate”, “potential”, “intend”, “may”, “plan”, “will” or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements contained in the Materials are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or uncertainties materialises, or if underlying assumptions prove incorrect, the Group’s actual results may vary materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward-looking statements. These forward-looking statements speak only as at the date of the Materials.

At a Glance47.52 million shares on issue

AIM-listed and Alt-X (JSE).

Market cap. £4.51 million at 9.5p per share (as at 12.02.09)

Lace Mine, South Africa (74% interest)

– BFS completed on 36Mt kimberlite to 855m– 13.4 million carats at 40cpht– NPV14.3% R460 million (£40 million) at US$90ct– + 400,000 carats p.a in peak production with +25 year mine life– R122 million (£10 million) development cost– Tailings retreatment ceased 2009 due to diamond price fall

Botswana exploration (earning 77.5% JV interest from Geoperspectives (Pty) Limited)

– three licences totaling 109.2km², and containing nine identified kimberlites– DFS on one project to be completed by May 2014 for DCP to earn JV interest– Kimberlite J1 - 9km south of De Beers Jwaneng mine 10ha– Initial drilling intersected kimberlite from 17m to 340m depth– Microdiamond analysis shows J1 diamondiferous but larger sample required to

determine grade.– J5 and J12 each 4-5ha return positive geochemistry and intention to drill 2010

Merger approach rejected as inadequate

£600,000 working capital raised in October 2009

Rough diamond prices recovering from lows of 2009

£7m in capital being sought to complete decline and access -240m level for sub level cave development at Lace (£4m), pay down debt (£1.3m), drilling in Botswana (£0.5m) and working capital (£1.2m).

Diamond Prices

Source: WWW International Diamond Consultants Ltd, November 2009

VP3 BFS base case US$75/ct.

Last Lace diamond sale US$90/ct. July 2009

Supply and Demand

Source: WWW International Diamond Consultants Ltd, May 2009

Supply and Demand in Rough Terms(at Jan 2009 values)

$9bn

$11bn

$13bn

$15bn

$17bn

$19bn

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

SupplyDemand

World Mine Reserves

Corporate Structure

through joint venture

The Lace Mine

Project Timeline

1896 Lace discovered

1900 1920 1940 2005 2010 2020

1931 Lace mine placedon care and maintenance

1939 De Beersbuys Lace and allows workings to flood

2005 DiamondCorpacquires Lace.Raises £9.3mseeks permits

2007 AIM Admission raises £2m. Constructs1.2m tpa recovery plant

2007 Tailingsre-treatmentcommissioned

2008 decline starts

2008 JSE Listingraises R26m (£2m)

2009 Mining Right granted.Tailings re-treatment shutsdue to diamond price collapseDecline accesses Main pipe BFS completed. - 32.5% IRR on base case of US$75/ct diamonds- R122m (£12m) capital cost- 500,000ct/yr at peak production

2012 Completion of sublevel cavedevelopment to mine 1.2m tpa+25 year mine life to 855m

2011 Initial mining from 240m levelProduction ramp up

The Lace Kimberlite

Resource Statement

Depth (m)Type &

CategoryTonnage (Mt) Grade (cpht) Carats (Mct)

Main Pipe Satellite Pipe Total Main Pipe Satellite

PipeMain Pipe

Satellite Pipe Total

73-345 VK Indicated 5.879 1.375 7.254 24.4 7.1 1.435 0.098 1.533

345-855 VKInferred 11.163 - 11.163 24.4 - 2.723 - 2.723

345-855 CKInferred 16.079 - 16.079 56.8 - 9.133 - 9.133

345-600 VKInferred - 0.025 0.025 - Unknown - Unknown -

345-600 CKInferred - 1.066 1.066 - Unknown - Unknown -

Total 33.121 2.466 35.587 40.12 13.389

Resource statement prepared September 2009 by VP3 Geoservices (Pty) Limited in accordance with the SAMREC Reporting Code.

1.2m tpa recovery plant

• Separate fines and coarse DMS to maximise small diamond recovery

• ≈ £14.5m (R190m sunk cost) inc. full underground mining fleet

• 220tph DMS recovery unit fully commissioned 2009 awaiting mine development

High quality gems

• High quality gem diamonds.• 35 carat, 18 carat and 14 carat

stones recovered from dumps.• History of large stones: 122ct, 72ct,

53ct and 47ct

Snowden mine planSurface

-240m level (below surface)

-330m level

-600m level (primary extraction)

-855m level (future second block cave)

New mine plans

Planned block cave (1st block)

Planned block cave (2nd block)

Source: Crown Diamond Mining & Exploration Co. historical level plansConceptual Lace Mine Plan prepared for DiamondCorp plc by Snowden Mining Industry Consultants, September 2009.

Snowden mine plan

Vent pass

Old workings

Decline

Production Levels

Sub-level caving design 240m – 330m£9.5m (R122m) capital budget of which ≈£2m already invested

Source: Conceptual Lace Mine Plan prepared for DiamondCorp plc by Snowden Mining Industry Consultants, September 2009.

Proposed development


Year 1Complete decline to -240mAccess Main PipeCross cut pipe and extract30,000t mining sample

Budget £4m

Year 2Establish sub-level cavebetween -240m and -330m.Refurbish 6m x 2.7m verticalshaft to -360mCommence commercial mining

Budget £3.5m

New collar 6m x 2.7m vertical shaft to -360m

R700/ct (US$90/ct)

Grade/cpht

Revenue/Tonne R

15 10624 16830 21035 24540 28045 31550 35055 38560 420

Mining & Processing cost(Snowden Mine Plan)

Grade of VK(VP3 Resource Statement)

Lace average grade(VP3 Resource Statement)

CK grade kimberlite(VP3 Resource Statement)

Sources: Conceptual Lace Mine Plan prepared for DiamondCorp plc by Snowden Mining Industry Consultants, September 2009.

Resource Statement, Lace Mine Bankable Feasibility Statement prepared for Lace Diamonds (Pty) Limited by VP3 Geoservices (Pty) Limited, September 2009.

Production

Lace Mine – Potential Diamond Production (carats per annum)

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

Year 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033


Botswana JV

Earning 77.5% interest from Botswanan company Geoperspectives (Pty) Ltd by completing DFS within five years.

J-01 – 9.9ha kimberlite.

Less than 9km from Jwaneng mine. (13m cts pa at 150cpht)

J1 Kimberlite

J1 Kimberlite

Two hole programme completed• Kimberlite to 300m - 340m.• 17m – 20m sand cover.• Open pit resource potential.• Mining & processing costs in

this region <$15/t (14cpht @ $110/ct).

• Microdiamond analysis demonstrates kimberlitediamondiferous.

• Larger sample required for grade determination.

Shareholders

7.1%3,375,000Aktiva Diversified Holdings Ltd

Existing Shares 47,516,995

Warrants (majority expire 2012 90p exercise price) 6,066,665

Options (majority expire 2017 135p exercise price)

Significant shareholders

3,465,000

European Islamic Investment Bank plc 10,720,555 22.6%

Management, directors and founders 7,038,031 14.8%

JPMF Natural Resources Fund 4,705,000 9.9%

MLP Investments (Caymans) Ltd 3,710,250 7.8%

Dromen Securities Limited 2,200,000 4.6%

Lynville Holdings Limited 1,500,000 3.2%

Euan A. Worthington

(54) - Non-executive Chairman

Mr Worthington has been involved in exploration, mining project development, analysis and corporate finance in the City of London for more than 25 years. He commenced his corporate finance career as mining analyst with Hoare Govett stockbroking in 1983, and has held positions as senior mining analyst with Shearson Lehman, divisional director and head of mining Research for S.G.Warburg Securities, head of mining Corporate Finance for BZW and head of the Metals & Mining team at ABN Amro. He has worked as an independent mining finance consultant since 2001, and is a non-executive director of African Eagle Resources plc and European Nickel plc, also listed on AIM. Mr Worthington holds a B.Sc. Geology (Hons) from Kings College, London, a DIC (Mineral Resources Engineering) and M.Sc. (Mineral Production Management) from Royal School of Mines, Imperial College, London. He is registered with the Engineering Council as a chartered engineer, a member of the Society for Mining, Metallurgy and Exploration, a Fellow of the Institute of Materials, Minerals and Mining, an associate of the Securities Institute and a past chairman of the Association of Mining Analysts.

Paul R. Loudon

(47) – Managing Director

Mr Loudon has more than 20 years experience in stockbroking, corporate finance and management of junior mining and exploration companies. He commenced his career as a mining journalist for the Australian Financial Review before entering stockbroking as the mining analyst for Intersuisse Limited in Sydney. He was partner in mining corporate advisory firm JSL Pacific Ltd before joining Indomin Resources Limited of Toronto as vice-president corporate development. He has been President of Battlefield Minerals Corporation of Toronto and non-executive chairman of BDI Mining Corp. before joining Loeb Aron & Company Ltd, a London corporate finance house specialising in the mining sector, as head of equities where he was responsible for raising significant sums of equity capital for resource companies listed in the UK, Canada and Australia. Mr Loudon is a non-executive director of Loeb Aron & Company and an associate of the Securities Institute.

Directors

Nick Allen

(73) - Non-executive Director

Mr Allen has worked in the mining industry for over 40 years, primarily in diamond mining and marketing, including lengthy periods with Consolidated African Selection Trust Limited, D. Drukker & Zn NV, George Evens of Antwerp and BenguelaConcessions Limited. He is a non-executive director of MercatorGold plc.

Dr Jonathan Willis-Richards


Dr Willis-Richards holds a Bachelor's degree in Geology from Oxford University and a Master's Degree in Mining Geology from Camborne School of Mines. His PhD work and subsequent research made him internationally known for numerical modelling in the areas of mineralised and fractured geothermal systems. In 1996 he was a founding director of London-based mining corporate finance house Loeb Aron & Company Ltd where he is an executive director.

Directors

Robin Henshall


Mr Henshall has more than 22 years experience as an investment banker, mainly with UBS, SG Barr Devlin, Donaldson, Lufkin & Jenrette/Credit Suisse and County NatWest. He is currently Head of Private Equity and Corporate Advisory at European Islamic Investment Bank plc.

Steve West

Head of Business Development (55)

Mr West is a mechanical engineer with more than 30 years experience in the mining industry, predominantly in diamonds. Hecommenced his career with De Beers Consolidated Mines in Kimberley and held a number of senior positions with the Trans Hex Group Limited, including Group Marine Manager and Group Project Manager. Prior to joining DiamondCorp, Mr West was Mine Manager of Gem Diamonds Limited's Cempaka diamond mine in Indonesia.

John Forrest

Finance Director (62)

Mr Forrest is a CPA with more than 30 years experience in public company administration and financial management. He commenced his career with Pricewaterhouse Coopers and currently acts as finance director of several listed and unlisted public companies.

Senior Management

Advisors

Barclays Bank plcBankers

Snowden Mining Industry ConsultantsVP3 Geoservices (Pty) Limited

Technical Advisors

Deloittes LLPAuditors

Cobbetts LLPWerksmans Inc.

Legal Advisors

Investec Bank LimitedJSE Sponsor

Cenkos Securities plcNomad

Cenkos Securities plcFairfax I.S. plc

AIM Brokers

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