The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR").
Karelian Diamond Resources
plc
(“Karelian” or “the Company”)
1 August 2017
PRELIMINARY
ECONOMIC ASSESSMENT OF THE LAHTOJOKI DIAMOND PROJECT
-
2.11M Carats Recoverable with a Gross
Value of US$211M
-
Mining Operation Recommended
-
Nine Year Mine Life: Payback Year
2
-
IRR 55% and NPV (8%) US$39.1M
Karelian Diamond Resources plc (“Karelian”) (AIM: KDR, ESM:
KDRI), is pleased to announce that it has received a Preliminary
Economic Assessment (“PEA”) on its 1.6 hectare Lahtojoki
diamondiferous kimberlite pipe in the Kuopio – Kaavi district in
south eastern Finland
(“Lahtojoki”) over which the Company holds a Mining Concession. The
PEA study was carried out by Michael
Brennan of Brennan Mining Services Limited, a consultant to
the Company.
The PEA states that analysis of combined microdiamond and
mini-bulk sample data suggests a +1mm recoverable grade of 39.7
Carats Per Hundred Tonnes (cpht) and indicates the presence of high
quality stones within the diamonds that have been recovered to
date.
Drilling indicates 5,603,584 tonnes are present to a depth of
160 metres below surface. For the purposes of the PEA US$100/carat has been used in the economic
evaluation and mine design.
A total resource (Non JORC) estimate is of 2,225,000 carats and
a contained value of US$222.5
million. Pursuant to the PEA, it is appropriate to classify
the resource into the inferred category based on the current
available grade and diamond value data. Currently it is not
possible to attribute reserves to Lahtojoki. Based on resource
available and an appropriate technical and economic assessment it
is possible to consider those resources that are likely to become
mineable and economically viable subject to further exploration and
feasibility work being undertaken.
An open pit mining operation is recommended.
Plant recovery of diamonds was estimated at 95% (2.11M carats
recoverable) giving a gross value of US$211
million.
The key economic indicators for the Lahtojoki kimberlite project
are estimated as follows:
Mine Life
(yrs) |
Recoverable Carats
(M) |
NPV (8%) US$
(M) |
IRR (%) |
Payback
(yrs) |
9 |
2.11 |
39.1 |
55 |
2 |
Capital cost estimates total US$22
million including process plant costs of US$14 million, infrastructure US$3 million and working and sustaining capital
US$5 million.
This release has been approved by Michael Brennan (MSc., SAIMM), who is a
Consultant to Karelian Diamond Resources plc, in accordance with
the guidance note for Mining, Oil & Gas Companies issued by the
London Stock Exchange in respect of AIM Companies, which outlines
standards of disclosure for mineral projects.
The work carried out by Michael
Brennan of Brennan Mining Services Limited and the derived
estimate of the reported diamond resource has been undertaken using
acceptable international practice, with consideration of the
relevant CIM Best Practice Guidelines. However, in its current
format, the contents of the report provided to Karelian are not
JORC Code compliant and the diamond resource estimate should be
viewed as indicative of the resource potential.
Professor Richard Conroy, Chairman, Karelian Diamond
Resources plc commented:
“I am delighted that a mining operation has been recommended.
Clearly much work remains to be done but this report is a major and
very encouraging step forward in our assessment of the Lahtojoki
Diamond project and of its potential for development as a
mine.”
Further Information:
Professor Richard
Conroy, Chairman, Karelian Diamond Resources plc |
Tel: +353-1-479-6180 |
Virginia Bull /
James Thomas / Nick Harriss, Allenby Capital Limited
(Nomad) |
Tel: +44-20-3328-5656 |
Ger Heffernan / Jan
Fitzell, IBI Corporate Finance Limited (ESM Adviser) |
Tel: +353-7662-34800 |
Jon Belliss /
Elliot Hance, Beaufort Securities Limited (Broker) |
Tel: +44-20-7382-8300 |
Michael Padley,
Lothbury Financial Services Limited |
Tel: +44-20-3290-0707 |
Don Hall, Hall
Communications |
Tel: +353-1-660-9377 |
www.kareliandiamondresources.com