Quarterly Activities Report For The Quarter Ended 30 September 2007
* Production at Lerala diamond mine on schedule to commence early
* DiamonEx listed on AIM
Construction at the Lerala diamond mine in eastern Botswana advanced
towards proposed production in early 2008. Lerala, 100% owned by
DiamonEx Limited (DiamonEx, the Company), 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.
On 29 October 2007, DiamonEx was listed on the Alternative Investment
Market (AIM) in London.
Lerala Diamond Mine (DiamonEx 100%)
Construction of the project continued during the quarter and is
entering the final stages.
The foundations of the processing plant and other civil works are 90%
All but 2% of the structural steel has been fabricated, and the
structural and mechanical erection on site is more than 35%
Design work still outstanding is limited to certain pumps, pipe
supports and conveyor trestles.
Close attention is now being given to the manufacture and
installation of conveyors and piping in order to maintain the
completion and production schedules.
The electrical generators are due to be installed by year's end.
Work on the water bores, pumps, pipes and holding dam proceeded
during the quarter; water supply should commence by year's end.
Strata Mining, the experienced mining company engaged as the Lerala
mining contractor, has been involved in the water supply and other
infrastructure. Mining is due to commence in the current quarter,
with first ore to provide a stockpile for commissioning in the
lead-up to production.
Initial production is scheduled to commence in early calendar 2008.
Full production will be achieved with the use of special equipment,
the High Pressure Grinding Roller Crusher (HPGR), designed to
increase diamond recoveries.
Delivery of the HPGR has been fast tracked so that it can be
installed and commissioned earlier than anticipated.
Currently the HPGR is expected to be delivered during February with
installation to be completed by mid March. Commissioning of the HPGR
is expected toward the end of March.
With the earlier arrival of the HPGR the plant commissioning process
is now under detailed review as instead of the staged commissioning
build up awaiting the arrival of the HPGR(Tertiary crushing circuit)
as currently planned it maybe more efficient to complete full
commissioning during March.
However this will not affect full diamond production being attained
during May 2008.
Martin's Drift Prospecting Licence (Diamonex 100%)
The company is actively exploring four Prospecting Licences covering
350sq km surrounding the Lerala Mining Licence.
Four areas of positive grain recoveries from previous sampling have
been identified and sampled (namely Area 2, Area 3, Area 5 and Area
6). A total of 421 samples were collected and concentrated.
All concentrate samples from Areas 2, 3 and 5 were sorted or examined
for kimberlitic grains. Only one kimberlitic garnet from Area 5 was
recovered. From Area 6, 104 samples out of a total of 176 have been
sorted to date and no kimberlitic grains recovered. Sample sorting
in this area has been suspended until strip sampling sorting is
Strip sampling was also initiated in an area south of K002, where
previous 50m follow-up sampling by De Beers returned some kimberlitic
garnets. Twelve strip lines, at 100m apart and a sampling interval
of 10m along strips, were completed. A total of 4,150 strip samples
were collected .Sorting work is underway at the Gaborone sorting
laboratory. Trenching has already commenced in areas of high grain
Spectral survey anomalies that have been followed up to date have not
shown kimberlitic characteristics.
Tuli Project ( Diamonex 100%)
Sampling work is yet to commence over the airborne spectral targets
defined earlier in the year.
Final funding arrangements to take the Lerala project into production
were announced in July 2007 and summarised in the previous quarterly
report on 31 July 2007.
As part of the arrangements, on 20 August 2007, a meeting of DiamonEx
shareholders approved a placement of approximately A$7.1 million to
international investors through London-based broker Fox-Davies
Major global resource investment house J P Morgan Asset Management
became the largest shareholder in DiamonEx when it acquired 13
million shares, representing 9.9% of the company's issued capital,
for an investment of A$4 million, as part of the placement.
On 29 October 2007, DiamonEx was listed on the Alternative Investment
Market (AIM) in London. The listing is intended to broaden
DiamonEx's shareholder base, offering investors in the UK and
European markets easier access to the Company's securities. The
Company has appointed Australian-based RFC Corporate Finance Ltd as
its Nominated Adviser and Fox-Davies Capital Limited as its broker in
relation to the AIM listing. DiamonEx's ordinary shares will
continue to be listed on the Australian Stock Exchange (ASX) and the
Botswana Stock Exchange (BSE).
Outlook for the December 2007 quarter
Construction of the Lerala diamond mining project will continue
towards completion, with mining due to commence during the quarter
ahead of first production in early 2008.
Dan O'Neill (Managing Director) Greg King (Chairman)
+61 7 37208944 (Office) +61 7 37208944 (Office)
+61 7 37208988 (Fax) +61 7 37208988 (Fax)
+61 407596942 (Mobile) +61 411473730 (Mobile)
Email: email@example.com Email:
Will Souter or Rob Adamson Richard Hail
RFC Corporate Finance Ltd (Nomad) Fox-Davies Capital Ltd (AIM
Tel: +612 9250 0050/+612 9250 Telephone: +44(0) 20 7936 5200
Email: firstname.lastname@example.org Email: Richard.Hail@fdcap.com
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
Name of entity
ABN Quarter ended ("current quarter")
26 091 951 978 30 SEPTEMBER 2007
Consolidated statement of cash flows
Cash flows related to operating activities Current date
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration and evaluation (208) (208)
(b) development (5,070) (5,070)
(d) administration (801) (801)
1.3 Dividends received
1.4 Interest and other items of a similar nature received 44 44
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
Net Operating Cash Flows
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects
investments (72) (72)
(c) other fixed assets
1.9 Proceeds from sale of: (a)prospects
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
Net investing cash flows
1.13 Total operating and investing cash flows (carried (6,107) (6,107)
1.13 Total operating and investing cash flows (6,107) (6,107)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 7,216,246 7,216,246
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings 9,260,000 9,260,000
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide details if material) (488) (488)
Net financing cash flows
Net increase (decrease) in cash held 9,881 9,881
1.20 Cash at beginning of quarter/year to date 878 878
1.21 Exchange rate adjustments to item 1.20 (7) (7)
1.22 Cash at end of quarter 10,752 10,752
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the
1.23 Aggregate amount of payments to the parties 184
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
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
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
3.1 Loan facilities Nil Nil
3.2 Credit standby arrangements Nil Nil
Estimated cash outflows for next quarter
4.1 Exploration and evaluation 190
4.2 Development 8,200
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current Previous
shown in the consolidated quarter quarter
statement of cash flows) to the related items in the $A'000 $A'000
accounts is as follows.
5.1 Cash on hand and at bank 1,560 878
5.2 Deposits at call 9,012
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22) 10,752 878
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
6.2 Interests in mining
tenements acquired or
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
(see note security
3) (cents) (see note
7.2 Changes during
7.3 +Ordinary 131,391,075 131,391,075
7.4 Changes during
quarter 23,278,212 23,278,212 31 cents 31 cents
7.5 +Convertible Convertible bonds issued in Botswana. Up to 10%
debt securities of the bonds are convertible into ordinary
(description) shares of the Company at BPW1.83 on 3 September
7.6 Changes during
quarter 50,000 Nil BWP1,000 BWP1,000
(a) Increases (Note 1) AUD185 AUD185
7.7 Options Exercise Expiry
(description and 2,000,000 nil price date
conversion 35 cents 28
7.8 Issued during
7.9 Exercised during
7.10 Expired during
7.12 Unsecured notes
Note 1: Application will be made to the Botswana Stock Exchange for
listing of these securities.
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
Date: 31 October 2007
Print name: Paul Crawford
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