Technical Report on the Lace Diamond Mine Free State, Republic of South Africa for Diamondcorp Plc
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TECHNICAL REPORT ON THE LACE DIAMOND MINE FREE STATE, REPUBLIC OF SOUTH AFRICA FOR DIAMONDCORP PLC P. Sobie, P.Geo. JJ Ferreira PhD Pr. Sci. Nat. February 1, 2016 P.G. Allan, BSc Hons. Toronto, Canada P.Loudon, BSc (Hons),MSAIMM 2016 Technical Report LACE DIAMOND MINE, REPUBLIC OF SOUTH AFRICA ii TABLE OF CONTENTS SUMMARY .................................................................................................................................... vi 1.0 INTRODUCTION .............................................................................................................. 1-1 1.1 Authorization and Terms of Reference ......................................................................... 1-1 1.2 Qualifications of Authors .............................................................................................. 1-1 1.3 Scope of Work and Sources of Information ................................................................. 1-2 2.0 RELIANCE ON OTHER EXPERTS ................................................................................. 2-1 3.0 PROPERTY DESCRIPTION AND LOCATION .............................................................. 3-1 3.1 Mineral Policy South Africa ......................................................................................... 3-1 3.2 Lace Diamond Mine Title, Location and Demarcation of Mining Permit ................... 3-1 3.3 Permitting Rights and Agreements Related to the Lace Diamond Mine ...................... 3-4 3.3.1 Surface Rights ...................................................................................................... 3-4 3.3.2 Taxes and Royalties ............................................................................................. 3-4 3.3.3 Obligations ........................................................................................................... 3-4 3.3.4 Environmental Liabilities..................................................................................... 3-4 3.4 Permits .......................................................................................................................... 3-6 4.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY.............................................................................................................. 4-1 5.0 HISTORY ........................................................................................................................... 5-1 5.1 Summary of Pre-Great Depression Period 1896-1931 ................................................. 5-1 5.2 De Beers Period 1931-1996 .......................................................................................... 5-5 5.3 Christian Potgeiter Trust 1996-2005 ............................................................................. 5-6 5.3.1 Delineation Drilling and Sampling Programme .................................................. 5-8 5.3.2 Tailings Bulk Sampling Programme .................................................................. 5-10 5.4 DiamondCorp plc 2005-2014 ..................................................................................... 5-12 5.4.1 General ............................................................................................................... 5-12 5.4.2 Tailings Reprocessing and Plant Construction .................................................. 5-14 5.4.3 2009 Satellite and Main Pipe Bulk Sampling .................................................... 5-14 5.4.4 2011 Main Pipe Bulk Sampling ......................................................................... 5-15 5.4.5 2012-2014 Development and Underground Delineation Drilling ..................... 5-19 6.0 GEOLOGICAL SETTING AND MINERALIZATION .................................................... 6-1 6.1 Regional and Local Geology ........................................................................................ 6-1 6.2 Lace Kimberlite Geology .............................................................................................. 6-1 6.2.1 K2 (Hypabyssal now called Coherent) Kimberlite .............................................. 6-1 6.2.2 K4 (Hypabyssal now called Coherent Kimberlite) .............................................. 6-2 6.2.3 K6 (TKB now called Fragmental) Kimberlite ..................................................... 6-4 6.2.4 K8 (Lava-Rich Kimberlite Breccia) ..................................................................... 6-4 6.2.5 Country Rock Breccia (Lava Breccia, Shale Breccia, CRB) ............................... 6-4 6.2.6 Ventersdorp Lava (LV) ........................................................................................ 6-4 6.3 Internal and Pipe Margin Geometry ............................................................................. 6-5 6.4 Mineralization – Lace Kimberlites ............................................................................... 6-6 6.4.1 General ................................................................................................................. 6-6 6.4.2 The Satellite Pipe ................................................................................................. 6-6 6.4.3 The Main Pipe ...................................................................................................... 6-7 2016 Technical Report LACE DIAMOND MINE, REPUBLIC OF SOUTH AFRICA iii 6.4.4 Commercial Potential........................................................................................... 6-8 6.4.5 Main Pipe Upper K4 Mine -230m to -370m ........................................................ 6-8 6.4.6 Block Caves 1, 2 and 3 -370m to -900m ............................................................. 6-8 7.0 DEPOSIT TYPES ............................................................................................................... 7-1 8.0 EXPLORATION ................................................................................................................ 8-1 9.0 DRILLING.......................................................................................................................... 9-1 10.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY .......................................... 10-1 10.1 Delineation Core Microdiamond Sampling ................................................................ 10-1 10.2 Bulk Sample Microdiamond Sampling ....................................................................... 10-3 10.3 Bulk Sample Macrodiamond Sampling ...................................................................... 10-4 10.3.1 Bulk Sample Mining and Stockpiling ................................................................ 10-4 10.3.1 Bulk Sample Processing and Security ............................................................... 10-5 11.0 DATA VERIFICATION .................................................................................................. 11-1 11.1 Geological Model........................................................................................................ 11-1 11.2 Drill Core Logs ........................................................................................................... 11-2 11.3 Internal Dilution Data ................................................................................................. 11-2 11.4 Bulk Density Data ....................................................................................................... 11-2 12.0 MINERAL PROCESSING AND METALLURGICAL TESTING ................................ 12-1 13.0 ADJACENT PROPERTIES ............................................................................................. 13-1 14.0 MINERAL RESOURCE ESTIMATE.............................................................................. 14-1 14.1 Evaluation Databases .................................................................................................. 14-1 14.1.1 Drill Hole Database............................................................................................ 14-1 14.1.1 Bulk Sample Database ....................................................................................... 14-5 14.2 Geological Modelling ................................................................................................. 14-5 14.2.1 Geological Continuity ...................................................................................... 14-10 14.2.2 Volume and Tonnage Estimates ...................................................................... 14-13 14.2.1 Confidence Level of Geological Model ........................................................... 14-13 14.3 Block Model.............................................................................................................. 14-14 14.3.1 Bulk Density Data ............................................................................................ 14-14 14.4 Bulk Dilution ............................................................................................................ 14-16 14.4.1 Bulk Dilution Data ........................................................................................... 14-16 14.4.2 Bulk Density and Dilution Estimation ............................................................. 14-17 14.4.3 Confidence Level of Bulk Density and Tonnage Model ................................. 14-19 14.5 Diamond Grade ......................................................................................................... 14-20 14.5.1 Approach and Sampling ..................................................................................