Quarterly Activities and Cashflow Reports
October 31 2008 - 1:39AM
UK Regulatory
Quarterly Activities and Cashflow Reports
DiamonEx Limited
AIM Release
31 October 2008
QUARTERLY ACTIVITIES REPORT
FOR THE QUARTER ENDING 30 SEPTEMBER 2008
* Plant nearing latter stages of commissioning
* Ramping to full production expected during the next
quarter
* First diamond sale to be completed today
* Second diamond sale scheduled for mid November
* Update on diamond sales will be provided at end of
November
THE LERALA DIAMOND MINE (Diamonex 100%)
The 100% owned Lerala diamond mine in eastern Botswana has an
established 3.7 million carat diamond resource and is scheduled to
produce an average of 330,000 carats per year for 10 years.
During the quarter commissioning of the Lerala diamond plant
continued with the rectification of a number of issues which have
hampered running the plant to full capacity. The remaining
restriction on full production is now mainly confined to the Final
Recovery Room where re-engineering has led to a by pass of the grease
belts which were not performing.
All recovery is now being carried out through the two existing X-Ray
Flowsorts and two additional X ray machines which have been brought
to site to retreat the concentrate that passed over the grease belt.
A further Flowsort with a greater throughput capacity will be
delivered to site shortly to accelerate the recovery process. This
recovery process is now performing well with all concentrate from the
DMS now passing through the Diamond X-Ray recovery section prior to
passing over grease tables which will recover the non fluorescent
diamonds. Once the re-engineering and tuning of the Final Recovery
Section of the plant is completed, it is expected that the Plant will
be operating at its designed 200tph capacity.
Minor difficulties have also been experienced due to the generation
of larger than anticipated amounts of fines from the ore which is
being mined from the K3 pipe. This has caused some minor problems in
the degrit and thickening circuits. However these problems are
currently being addressed and at present are not affecting
production.
A parcel of diamonds totalling 10,613 carats was transported to
Diamonex's secure facility in
Gaborone towards the end of October to start the sales process. This
process is undertaken for Diamonex by highly regarded diamond
valuation agents, WWW International Diamond Consultants, who
represent and act for the world's leading diamond companies and
Governments. Under its mining lease conditions, Diamonex must offer
its diamond goods to Botswana registered cutters and polishers.
Botswana cutters were given two days to view the goods prior to them
being Kimberly Certificated and transported to Antwerp where the
Company will be offering its goods for sale internationally, with the
best price in a closed tender process securing the diamonds.
This sale will be completed today, achieving an average price of
US$20 per carat for the whole run of mine parcel. This is much less
than the preliminary valuation of the parcel and reflects the current
difficult market conditions. WWW reported that the value achieved for
the first tender of Lerala production was deeply disappointing but
not surprising in the context of the overall market where trading in
rough diamonds has effectively ground to a halt as the general
economic uncertainties and in particular the liquidity shortages have
taken effect. However, once the extraordinary and unforeseen economic
turmoil has worked its way through the system, WWW's confidence in
the long term prognosis for the diamond industry remains favourable
A further diamond sale is scheduled to commence in mid November.
EVALUATION
Sloan Mineral Rights, Northern Colorado, USA (Diamonex 100%)
The permitting process allowing work to proceed at Sloan required
Diamonex to hold a public meeting such that landowners who thought
they could be affected by Diamonex activities could voice their
concerns.
This meeting was held on the 20th September with the minutes
submitted to the county as part of the overall permitting process.
EXPLORATION
Exploration activities continued on the company's Jwaneng and Tuli
properties in Botswana.
CORPORATE
During the quarter the company raised A$3.6 million through the
placement of 18 million shares at A$0.20 to institutional investors
in Botswana.
OUTLOOK FOR THE NEXT QUARTER
The company's primary focus for the last quarter of this calendar
year is to attain full production at the Lerala Mine and to be cash
flow positive by the end of 2008.
For and on behalf of the Board
Paul Crawford
Company Secretary
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
30/9/2001.
Name of entity
DIAMONEX LIMITED
ABN Quarter ended ("current quarter")
26 091 951 978 30 SEPTEMBER 2008
Consolidated statement of cash flows
Year to
Cash flows related to operating activities Current date
quarter (3
$A'000 months)
$A'000
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration and (427) (427)
evaluation (3,694) (3,694)
(b) development
(c) production (847) (847)
(d)
administration
1.3 Dividends received
1.4 Interest and other items of a similar nature 47 47
received
1.5 Interest and other costs of finance paid (364) (364)
1.6 Income taxes paid
1.7 Other (provide details if material)
(5,285) (5,285)
Net Operating Cash Flows
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects
(b)equity investments (123) (123)
(c) other fixed assets
1.9 Proceeds from sale of: (a)prospects
(b)equity investments
(c)other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
(123) (123)
Net investing cash flows
1.13 Total operating and investing cash flows (carried (5,408) (5,408)
forward)
1.13 Total operating and investing cash flows (5,408) (5,408)
(brought forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 3,600 3,600
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings 1,353 1,353
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other:
Cost of share issue (175) (175)
Net financing cash flows 4,778 4,778
Net increase (decrease) in cash held (630) (630)
1.20 Cash at beginning of quarter/year to date 1,674 1,674
1.21 Exchange rate adjustments to item 1.20 164 164
1.22 Cash at end of quarter 1,208 1,208
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the
related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties 100
included in item 1.2
1.24 Aggregate amount of loans to the parties Nil
included in item 1.10
1.25 Explanation necessary for an understanding of the transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a
material effect on consolidated assets and liabilities but did
not involve cash flows
nil
2.2 Details of outlays made by other entities to establish or
increase their share in projects in which the reporting entity
has an interest
nil
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$A'000 $A'000
3.1 Loan facilities 15,726 15,726
3.2 Credit standby arrangements Nil Nil
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation 200
4.2 Development -
Total 200
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current Previous
shown in the consolidated statement of cash flows) quarter quarter
to the related items in the accounts is as follows. $A'000 $A'000
5.1 Cash on hand and at bank 1,138 1,604
5.2 Deposits at call 70 70
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22) 1,208 1,674
Changes in interests in mining tenements
Tenement Nature of Interest at Interest
reference interest beginning at end of
(note (2)) of quarter quarter
6.1 Interests in mining EL6595 Exploration 100% 0%
tenements tenement -
relinquished, Jugiong, NSW
reduced or lapsed
6.2 Interests in mining
tenements acquired
or increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or
conversion rights together with prices and dates.
Total number Number Issue Amount
quoted price per paid up
security per
(see note security
3) (cents) (see note
3) (cents)
7.1 Preference
+securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs,
redemptions
7.3 +Ordinary 173,424,196 173,424,196
securities
7.4 Changes during
quarter 18,000,000 18,000,000 20 cents 20 cents
(a) Increases 6,506,121 6,506,121 23.5 cents 23.5 cents
through issues
(b) Decreases
through returns
of capital,
buy-backs
7.5 +Convertible Convertible bonds issued in Botswana. Up to 10%
debt securities of the bonds are convertible to up to 50,000
(description) ordinary shares of the Company at BPW1.83 on 3
September 2011. (Note 1)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Exercise Expiry
422,850 nil price date
2,000,000 nil 37 cents 16 January
1,000,433 nil 35 cents 2011
Options 1,000,000 nil 37 cents 28
(description and 1,550,000 nil 30 cents December
conversion 37 cents 2011
factor) 22 October
2010
1 November
2010
17 April
2013
7.8 Issued during - - cents -
quarter
7.9 Exercised during
quarter
7.10 Expired during
quarter
7.11 Debentures
(totals only)
7.12 Unsecured notes
(totals only)
Note 1: Application has been made to the Botswana Stock Exchange for
listing of these securities.
Compliance statement
1 This statement has been prepared under accounting policies
which comply with accounting standards as defined in the Corporations
Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the
matters disclosed.
Paul Crawford
(Director/Company Secretary)
Date: 30 October 2008
Notes
1 The quarterly report provides a basis for informing
the market how the entity's activities have been financed for the
past quarter and the effect on its cash position. An entity wanting
to disclose additional information is encouraged to do so, in a note
or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes
options in respect of interests in mining tenements acquired,
exercised or lapsed during the reporting period. If the entity is
involved in a joint venture agreement and there are conditions
precedent which will change its percentage interest in a mining
tenement, it should disclose the change of percentage interest and
conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and
amount paid up is not required in items 7.1 and 7.3 for fully paid
securities.
4 The definitions in, and provisions of, AASB 1022:
Accounting for Extractive Industries and AASB 1026: Statement of Cash
Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the
use of International Accounting Standards for foreign entities. If
the standards used do not address a topic, the Australian standard on
that topic (if any) must be complied with.
== == == == ==
For further information contact:
Dan O'Neill
Managing Director
Tel: +61 7 3720 8944
Mob: +61 407 596 942
Email: diamonex@diamonex.com.au
Mark Gray
Corporate Development
Tel: +61 7 3720 8944
Mob: +61 412 899 979
Email: diamonex@diamonex.com.au
Will Souter or Rob Adamson
RFC Corporate Finance Ltd (Nomad)
Tel: +61 2 9250 0050
+61 2 9250 0041
Email: will.souter@rfc.com.au
rob.adamson@rfc.com.au
Richard Hail
Fox-Davies Capital Ltd (AIM Broker)
Tel: +44 20 7936 5200
Email: Richard.Hail@fdcap.com
Jos Simson or Leesa Peters
Conduit PR - Investor Relations
Tel: +44 20 7429 6603
+44 78 9987 0450
Email: jos@conduitpr.com
About DiamonEx:
DiamonEx is an emerging diamond producer having developed a 330,000
carat per year diamond mine at Lerala, in eastern Botswana. The mine
is 100% owned and is located in an area that produces up to 30% of
the worlds diamonds by value. The company also owns 15,000 sq km of
mineral rights in Botswana which it is actively exploring for
diamonds, as well as a 9.3 hectare diamondiferous kimberlitic pipe in
northern Colorado, USA, which it is currently evaluating for grade
and value. DiamonEx is listed on the Australian Stock Exchange
(ASX), the Alternative Investment Market in London (AIM), and the
Botswana Stock Exchange (BSE).
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