Karelian Diamond Res. Preliminary Economic Assessment of Lahtojoki
August 01 2017 - 2:00AM
UK Regulatory
TIDMKDR
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$211 million.
The key economic indicators for the Lahtojoki kimberlite project are estimated
as follows:
Mine Life (yrs) Recoverable Carats NPV (8%) US$ (M) IRR (%) Payback (yrs)
(M)
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 Tel: +353-1-479-6180
Resources plc
Virginia Bull / James Thomas / Nick Harriss, Allenby Tel: +44-20-3328-5656
Capital Limited (Nomad)
Ger Heffernan / Jan Fitzell, IBI Corporate Finance Tel: +353-7662-34800
Limited (ESM Adviser)
Jon Belliss / Elliot Hance, Beaufort Securities Tel: +44-20-7382-8300
Limited (Broker)
Michael Padley, Lothbury Financial Services Limited Tel: +44-20-3290-0707
Don Hall, Hall Communications Tel: +353-1-660-9377
www.kareliandiamondresources.com
END
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