Karelian Diamond Res. Preliminary Economic Assessment of Lahtojoki

 
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: [phone] 
Resources plc 
 
Virginia Bull / James Thomas / Nick Harriss, Allenby        Tel: [phone] 
Capital Limited (Nomad) 
 
Ger Heffernan / Jan Fitzell, IBI Corporate Finance             Tel: [phone] 
Limited (ESM Adviser) 
 
Jon Belliss / Elliot Hance, Beaufort Securities            Tel: [phone] 
Limited (Broker) 
 
Michael Padley, Lothbury Financial Services Limited       Tel: [phone] 
 
Don Hall, Hall Communications                                  Tel: [phone] 
 
www.kareliandiamondresources.com 
 
 
 
END 
 

(END) Dow Jones Newswires

August 01, 2017 02:00 ET (06:00 GMT)