Growth focused South African diamond mining company
May 2007
Page 1 Disclaimer
The document attached hereto and the presentation of which it forms part (together the “Materials”) have been prepared by DiamondCorp plc (“DiamondCorp” or the “Company”) and are confidential and personal to you and the Materials are furnished to you as background information to provide a basis for potential investors to consider whether to pursue an acquisition of shares in the Company and do not constitute an offer or invitation for the sale or purchase of any securities, nor do they, nor do they purport to, set out or refer to all or any of the information an investor might require or expect in making a decision as to whether or not to deal in shares in the Company.
The Materials do not constitute and are not a prospectus or listing particulars (under either the Prospectus Regulations 2005 (as amended), the Financial Services and Markets Act (“FSMA”) or the Prospectus Rules of the Financial Services Authority) nor do they comprise an AIM admission document for the Rules of AIM, a market operated by the London Stock Exchange plc and should not be construed as such. No representation or warranty or other assurance, express or implied, is made by or on behalf of the Company or any of their respective directors, officers, employees, advisers or any other persons as to the fairness, accuracy or completeness of the information or estimates or opinions or other statements about the future prospects of the Company or any of their respective businesses contained in the Materials or referred to in the presentation given in connection therewith and no responsibility, liability or duty of care whatsoever is accepted by any such person in relation to any such information, projection, forecast, opinion, estimate or statement.
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Page 2 At a Glance
34.00 million shares on issue
AIM-listed. Trading symbol “DCP”
Market capitalisation £30.6 million at 90p per share
£9.3 million raised pre-IPO since 2005. £2.5 million raised at IPO for additional working capital Feb 2007
Lace mine Phase 1 - to start June 2007 Estimated 370,000 carats at $63/carat from tailings
Lace mine Phase 2 - potential 13.7 million carats at $125/carat More than 400,000 carats per annum in peak production Potential 20 year mine life from underground mining Strong BEE partners – Sphere and Shanduka
Adjoining exploration properties
Experienced team with proven track record Page 3 Page 4 Corporate Structure
Page 5 Corporate Structure
Economic rights to Lace maintained through shareholders’ agreement R13 million to be paid by each BEE partner after Diamondcorp has contributed R74 million and completed bankable feasibility study BEE equity returns in trust to Diamondcorp if payment is not made Payment can be satisfied by the introduction of additional diamond properties of appropriate value at the election of DiamondCorp Lace board controlled by DiamondCorp Page 6 Black Economic Empowerment (BEE)
“Use it or Lose it” policy under new South African mining act BEE partner required to gain access to mining assets South African government initiative to empower historically disadvantaged individuals in South Africa Five strands to BEE: ownership, employment, procurement, upliftment and beneficiation Ownership satisfied through 26 per cent. economic right to mining assets Shanduka Vehicle for Cyril Ramaphosa Multi-faceted holding company Significant resources experience Sphere Specific diamond focus in resources Rosy Blue diamond marketing Old Mutual, Ethos, Babcock
Page 7 Directors and Senior Management
DiamondCorp Plc Lace Diamond Mines (Pty) Ltd Euan Worthington Alistair Holmes Non-executive chairman Operational manager Broad City and resources experience Considerable experience in the diamond industry in the RSA Paul Loudon Former operations manager of Sonop Delweray CEO and managing director Pulane Kingston Significant resources and corporate finance experience Non-executive director Nick Allen Sphere Holdings Non-executive director Karabo Tshailane Diamond marketing Gerry Robbertze Dr. Jonathan Willis-Richards Non-executive director Non-executive director Mining engineer, ex-Anglovaal Geologist and corporate finance John Forrest Secretary and CFO Central China Goldfields plc
Page 8 Assets and Strategy
Page 9 Location
Located 200km southwest of Johannesburg and 20km from Kroonstad
9km SW of Voorspoed, where De Beers is developing a new 4Mtpa (800,000 carat pa) mine
Page 10 The Lace Property
Plant site
Original open pit
Tailings dumps
Source: MPH Consulting Page 11 The Lace Assets
ESTIMATED RESOURCES GEOLOGICAL MODEL OF THE LACE KIMBERLITES
Source: MPH Consulting, SRK RESOURCE SUMMARY Tailings ~370,000 cts Shallow Underground >1,820,000 cts Underground ~11,910,000 cts Satellite ? Total ~14,100,000 cts
Page 12
Src: MPH Consulting Phase One - Tailings Retreatment
1.6 Mtpa DMS plant
3.6 million tonnes to be treated over 27 months
Revenue of US$6.50/t, costs of US$2.50/t
Cash positive US$14.4 million Source: Consulmet
Page 13 Phase One - Tailings Retreatment
Tonnes Grade Resource Category Tonnes (%) (000’s) (cpht)
Measured 2 853.2 72 10.7
Indicated 742.3 19 8.7
Total 3 595.5 91 10.31
Inferred 390.8 9 4.3
1 weighted average. +1mm bottom cut-off screen size
Page 14 Phase Two – Underground bulk sample
Source: MPH Consulting, SRK
Page 15 Phase Two – Underground mining
Upper Block Cave Preliminary Mine Design
Source: MPH Consulting, SRK
Page 16 Phase Two – Underground mining
Underground feasibility targeting end 2008 Final feasibility and mining approvals to be sought before completion of tailings retreatment Addition of primary crushing circuit and third DMS to tailings re-treatment plant will allow 1.6 Mtpa of primary ore to be treated Potential production of 400,000 cts/yr at 25 cpht. Potential 20 year mine life Estimated potential US$50M/yr revenue
Hypabyssal Macrocrystic kimberlite at US$125/ct Potential mining plan Primary block caving to 600 metres Secondary block caving to 855 metres Mining plan to be optimised to maximise cash generation and return for all shareholders
Page 17 Page 18 Project economics
Page 19 25-Year Production Potential
800000
700000
600000
500000
400000
300000 Carats per annum per Carats
200000
100000
0 12345678910111213141516171819202122232425 Years
Tailings Block Cave 1 Block Cave 2 VCR
Based on MPH Consulting, SRK scoping studies
Page 20 Potential project economics
After-tax cashflow Lace diamond mine
500,000,000
400,000,000
300,000,000
200,000,000
Rand 100,000,000
0
-100,000,000
1234567891011121314151617181920212223242526 -200,000,000 Years
Based on MPH Consulting, SRK scoping studies, ungeared
Page 21 Kimberlite comparison
Kimberlite Country Production cpht Carat Revenue (2005) cts Value / Tonne US$ US$ Very high revenue / Diavik Canada 8,270,000 459 96 441 tonne Jwaneng Botswana 12,339,000 138 152 210
High Ekati Canada 3,685,000 100 144 144 revenue / Venetia South Africa 8,515,000 144 95 136 tonne Luzamba Angola 418,000 58 210 121 The Oaks South Africa 86,000 34 180 62 Letlhakane Botswana 1,021,000 28 180 51 Medium Orapa Botswana 13,056,000 83 50 41 revenue / tonne Jubilee Russia 5,500,000 61 65 40 Lace South Africa *(e) 400,000 28 125 35 Finsch South Africa 2,216,000 37 70 26 Voorspoed South Africa *(e) 800,000 20 125 25 Letseng Lesotho 37,000 2 1250 25 Low Namaqualand South Africa 808,000 13 180 24 revenue / tonne Cullinan South Africa 1,150,000 28 80 23 Argyle Australia 26,000,000 172 11 19 Kimberley South Africa 549,000 15 110 16 Koffiefontein South Africa 123,000 7 225 15 Williamson Tanzania 191,000 7 145 10 Source: De Beers, Aber, BHP, Rio Tinto web sites and presentations, Fox-Davies Capital, RBC Capital Markets.* (e) Estimated 2010 production Page 22 Peer group comparison
Market Attributable Mkt Cap/ Cap Carats In-Situ Value In-Situ Value (US$MM) (meas, ind & inf) (US$MM) %
Aber Diamond Corp TSX 2405.05 36,120,000 3,467.5 69.36 African Diamonds AIM 180.23 6,180,000 927.0 19.44 Brazilian Diamonds TSXV 27.05 110,000 14.3 189.14 Diamond Core Resources JSE 66.91 1,125,000 587.3 11.39 DiamondCorp AIM 60.88 10,428,820 1,289.0 4.72 Elkedra Diamonds ASX 32.52 270,000 76.7 42.41 European Diamonds AIM 41.79 6,330,000 443.1 9.43 Firestone Diamonds AIM 144.23 600,000 120.0 120.19 Gem Diamonds LSE 1277.03 24,815,000 4,151.9 30.76 Kimberley Diamond Company ASX 249.50 4,980,000 1,025.9 24.32 KimCor Diamonds AIM 9.27 290,000 32.2 28.79 Mountain Province Diamonds TSX 280.66 16,743,000 1,239.0 22.65 Pangea DiamondFields AIM 148.99 10,770,000 1,895.5 7.86 Petra Diamonds AIM 451.37 4,980,000 752.0 60.02 Rockwell Diamonds TSX 114.30 447,108 670.7 17.04 Shore Gold TSX 881.97 42,500,000 5,737.5 15.37 Sierra Leone Diamond Co AIM 289.63 25,000,000 2,350.0 12.32 Southern Era Diamonds TSX 79.53 9,600,000 950.4 8.37 Tahera Diamonds TSX 146.34 8,251,000 618.8 23.65 Target Resources AIM 52.27 2,070,000 207.0 25.25 Trans Hex Group JSE 182.45 2,923,000 1,952.6 9.34
Source: Hanson Westhouse, Company websites, Thomson Financial
Page 23 Page 24 The Diamond Market
Page 25 Overview
“2006 outlook remains positive, with Diamonds are luxury goods not commodities market growth expected to be similar Prices historically controlled by De Beers to 2005 in line with expectations for De Beers stockpile diminished global economic growth”
Src: De Beers Annual Report 2005 Significant Canadian and Australian mines not controlled by De Beers Purchases from ALROSA restricted by European Commission Market developed for smaller diamonds Kimberley process to authenticate diamonds Forecast diamond supply is well analysed Diamond demand is forecast to exceed supply New markets for diamonds continue to develop as countries benefit from economic involvement in the world economy e.g. Shanghai Diamond Exchange
Page 26 Diamond prices
Rough and Polished Prices Jan 2003=100 170.0
160.0 Rough 150.0 Polished 140.0 130.0 120.0 110.0 100.0 90.0 2002 2004 2006 2008 2010 2012
Source: WWW International Diamond Consultants Limited
Page 27 Page 28 Exploration
Page 29 Exploration
Silverbank PROSPECTING RIGHTS APPLIED FOR AND GRANTED Prospecting right granted 4,419 ha to the west of Lace
Moregroet Prospecting right granted 1,959 ha to the east of Lace
Initial Prospecting Airborne magnetics Sampling
Voorspoed De Beers owned 9km NW of Lace $177 million budget
Page 30 Exploration
Page 31 Page 32 Further Information
Page 33 Capital Structure
Existing Shares 34,003,744
Warrants 6,999,990 At 90p-121.5p
Options 3,000,000 At 135p
Fully diluted 44,003,734
Significant shareholders
Management, founders and directors 9,008,031 26.5%*
MLP Investments (Caymans) Ltd 5,950,000 17.51%
Aktiva Diversified Holdings Ltd 3,375,000 9.93%
JPMF Natural Resources Fund 3,350,000 9.86%
* Subject to a 36 month progressive release lock-in.
Page 34 Consultants & Advisers
AIM Broker and Nomad – Cenkos Securities Limited
Reporting accountant and auditor – Deloitte & Touche
Legal advisers, UK – Cobbetts LLP
Legal advisers, South Africa – Werksmans Inc.
Page 35 Page 36 Appendices
Page 37 Resource Estimate
Tonnage (Mt) Grade (cpht) Carats (Mct)
Depth Main Satellit Total Main Satellite Main Satellite Total Pipe e Pipe Pipe Pipe Pipe Pipe
Potential Diamondiferous Kimberlite1 0-240m - 1.75 1.75 - unknown - unknown -
240-345m 6.57 0.63 7.20 27.7 unknown 1.82 unknown 1.82 Inferred Resources2 345-600m 14.26 1.06 15.32 38.0 unknown 5.42 unknown 5.42
600-855m 12.88 - 12.88 50.3 unknown 6.49 unknown 6.49
Total Inferred Resources 345-855m 28.243 1.092 29.33 42.2 11.91 11.91 Total Potential Diamondiferous Kimberlite plus Inferred Resources 0-855m 34.814 3.472 38.28 39.4 13.73 13.73 1 estimated by MPH based on inferred kimberlite volumes, historical diamond recoveries and the drilling of resources below this level, but requiring additional testing before it could be classified as an “inferred resource” under any reporting code 2 in accordance with the SAMREC Code for reporting mineral resources and reserves 3 includes approximately 1.1Mt of country rock xenoliths between depths of 345 metres and 855 metres assigned zero grade 4 includes approximately 0.3Mt of country rock xenoliths between depths of 345 metres and 600 metres assigned zero grade
Page 38 Lace History
Lace Diamond Mining Company Crown Diamond Mining and Exploration Company Limited
1896 1899 1903 1907 1939 1996
1896: Kimberlite identified 1931: Great Depression rendered 1899: Reportedly listed on JSE mine uneconomic 1902: Production began 1939: Sold to De Beers 1939-1996: Mothballed by De Beers 1907: Sold to Crown Diamond Mining 4.5Mt treated from 1902-31 701,346 carats at a recovered grade of 15.7 cpht Gems up to 82 carats Partially mined out to 240m Lowest development level at 330m 4.6m by 2.9m shaft developed to 362m
Page 39 Lace History (2)
Christiaan Potgieter Trust
1996 1998 2002 2005 2006 2007 2008 2009 2029
1996: Sold to the Christiaan Potgieter Trust 2006: Prospecting right granted 1997-1998: Reviewed by MPH 2007: Scheduled tailings retreatment 1997-1998: Hypabyssal kimberlite discovered starts at depth 2007-2008: Exploration of Silverbank and New Mining Act Moregroet Sold to DiamondCorp, Sphere and Shanduka 2008: Feasibility on underground mining 2009: Anticipated start of underground mining
Page 40 Shanduka
Page 41 Sphere Holdings
Page 42 Funding & Development Timeline
2006 / 2007 Build 1.6 Mtpa treatment plant and initiate tailings retreatment Initiate pre-feasibility on underground mining Initiate local exploration programme
2007 / 2008 / 2009 Complete underground feasibility, upgrade plant and obtain approvals for underground mining Complete tailings retreatment
2009 Potential to commence underground mining Tailings plant capable of producing +400,000 carats after addition of crushing circuit Optimise mining plan to maximise cash generation and return for all shareholders
Page 43 Appendix - DiamondCorp directors
Euan A. Worthington Paul R. Loudon (51) - Non-executive Chairman (44) – Managing Director Mr Worthington has been involved in exploration, mining project Mr Loudon has more than 20 years experience in stockbroking, development, analysis and corporate finance in the City of London corporate finance and management of junior mining and for more than 25 years. He commenced his corporate finance exploration companies. He commenced his career as a mining career as mining analyst with Hoare Govett stockbroking in 1983, journalist for the Australian Financial Review before entering and has held positions as senior mining analyst with Shearson stockbroking as the mining analyst for Intersuisse Limited in Lehman, divisional director and head of mining Research for S.G. Sydney. He was partner in mining corporate advisory firm JSL Warburg Securities, head of mining Corporate Finance for BZW Pacific Ltd before joining Indomin Resources Limited of Toronto as and head of the Metals & Mining team at ABN Amro. He has vice-president corporate development. He has been President of worked as an independent mining finance consultant since 2001, Battlefield Minerals Corporation of Toronto and non-executive and is an executive director of AIM-listed Celtic Resources Holdings chairman of BDI Mining Corp. before joining Loeb Aron & Company plc, and a non-executive director of African Eagle Resources plc Ltd, a London corporate finance house specialising in the mining and European Nickel plc, also listed on AIM. Mr Worthington holds sector, as head of equities where he was responsible for raising a B.Sc. Geology (Hons) from Kings College, London, a DIC (Mineral significant sums of equity capital for resource companies listed in Resources Engineering) and M.Sc. (Mineral Production the UK, Canada and Australia, including the initial public offering Management) from Royal School of Mines, Imperial College, and AIM listing of Mercator Gold plc, where he served as a London. He is registered with the Engineering Council as a founding director. Mr Loudon is a non-executive director of Loeb chartered engineer, a member of the Society for Mining, Aron & Company and an associate of the Securities Institute. Metallurgy and Exploration, a Fellow of the Institute of Materials, Minerals and Mining, an associate of the Securities Institute and a past chairman of the Association of Mining Analysts.
Page 44 Appendix - DiamondCorp directors
Dr Jonathan Willis-Richards Nick Allen (52) - Non-executive Director (70) - Non-executive Director Dr Willis-Richards holds a Bachelor's degree in Geology from Mr Allen has worked in the mining industry for over 40 years, Oxford University and a Master's Degree in Mining Geology from primarily in diamond mining and marketing, including lengthy Camborne School of Mines. His PhD work and subsequent periods with Consolidated African Selection Trust Limited, D. research made him internationally known for numerical Drukker & Zn NV, George Evens of Antwerp and Benguela modelling in the areas of mineralised and fractured geothermal Concessions Limited. He is a non-executive director of Mercator systems. After some time with the UK "Hot Dry Rock" Gold plc. geothermal energy project as geologist, reservoir modeller and finally as earth science manager with CSM Associates Ltd, he joined the Resources Engineering Faculty of Tohoku University in Japan to continue computer modelling and research as part of the Japanese geothermal research programme. In 1996 he returned to the UK as a founding director of London based mining corporate finance house Loeb Aron & Company Ltd where he is an executive director. He served as non-executive director of AIM listed Host Europe plc, a profitable web site hosting company, in the period prior to its trade sale for more than £30m in 2004.
Page 45 Lace Diamond Mines – senior management
Alistair Holmes John Forrest Managing Director Finance Director Mr Holmes has more than 20 years experience in mining industry in Mr Forrest is a CPA with more than 30 years experience in Australia, Zimbabwe and South Africa. Alistair has supervised the public company administration and financial management. He construction and operation of several large scale diamond plants. commenced his career with Pricewaterhouse Coopers and For the past 7 years he has managed the operations of Sonop currently acts as finance director of several public companies, Delweray, South Africa’s largest private diamond producer. This including AIM-listed Central China Goldfields plc. involves the mining and rehabilitation of more than 25 million tonnes of diamond bearing gravel per annum. He has constructed four large DMS plants and sort houses, and managed all the associated security. He has had direct responsibility for managing a workforce of 1,200 personnel.
Page 46 Lace Diamond Mines – non-executive directors
Ms Pulane Kingston Gert J. (Gerry) Robbertze Ms Kingston graduated from the University of Wales with an LLB Mr Robbertze graduated Camborne School of Mines with an ACSM (Hons) and from the University of Nottingham with an LLM in (First Class) in 1972. Has held various management and engineering International Law. She is an executive director and one of the positions in Namibia and South Africa on copper, lead, zinc, chrome, founder shareholders of Sphere Holdings. She was previously an manganese, tin and gold mines and on projects with Tsumeb associate at White & Case (Johannesburg) and prior to that an Corporation Limited, Gold Fields of South Africa and Assore until associate partner at Edward Nathan & Friedland Inc, specializing in 1987, when he joined Anglovaal Limited as chief consulting engineer. corporate and commercial law. She has been involved in Was senior vice-president, technical services of the Anglovaal Group privatizations, mergers, acquisitions, listings, restructurings and before joined The Mineral Corporation consultancy in September various empowerment transactions. 2003.
Ms Karabo Tshailane
Karabo Tshailane has been with Shanduka Group from January 2004. She is a Financial Analyst for Shanduka Resources and has worked both as a Financial Analyst for the Group and as Professional Assistant to the Executive Chairman of the Group. She currently serves on the Board of Netgroup Holdings (Pty) Ltd, as well as on Netgroup’s Audit sub-committee, on behalf of Shanduka Energy. She also serves on the board of Inyanga Consolidated Investments (Pty) Ltd, representing Shanduka Resources. Prior to joining Shanduka, she was serving her Accounting articles with PriceWaterhouseCoopers. She qualified as a Chartered Accountant in 2003 and holds a Bachelor of Accounting degree (Natal University) and Higher Diploma in Accounting (Wits).
Page 47