Lace Mine flood plunges Diamondcorp back into uncertainty

Southern Africa-focused diamond mining, development and exploration company DiamondCorp was facing some serious issues with its Lace Mine again, it announced on Monday.

The AIM-traded company said in the late afternoon on 11 November, two extreme thunderstorms passed over the mine, dropping almost 90mm of rain in just over an hour.

That equates to almost one-third of the mine's annual rainfall, according to DiamondCorp’s board.

“This overwhelmed the mine's pumping systems and flooded the 310m production level to the hanging wall,” the board said in a statement.

“In total, more than 10,000 cubic metres of water is estimated to have entered the mine through the open pit and access ramps.”

All personnel were successfully evacuated from the mine without injury, the board confirmed, however to pump the production level dry will take at least a week assuming no further material rainfall.

“Once the level is dry no production will be possible in the short-term as the longhole drill rig which was operating at the time of the flood will need to be recovered and the electrics rebuilt.

“This could take up to 12 weeks from the time of recovery.”

The company’s management said it is investigating all options as a consequence of the flood and its impact on the group's financial position, and is consulting a business rescue practitioner for DiamondCorp’s operating subsidiary, Lace Diamond Mines, under Chapter 6 of the Companies Act 2008 in South Africa.

DiamondCorp requested a suspension of its shares from trading on both the AIM Market of the London Stock Exchange and on the Alternative Exchange of the JSE with effect from Monday morning while it clarified its financial position.