DiamondCorp (LON:DCP) was one of the sector's biggest fallers after reporting that tunnel work had been slower than planned. DiamondCorp says its 74%-owned subsidiary Lace Diamond Mines (Pty) had continued with the implementation of the revised development schedule and budget for the ramp up of commercial production from underground kimberlite mining in the coming months. But it said tunnel development was slower than planned during the period due to the need to drain water from old workings in fractured ground near the kimberlite contact, the requirement for additional support to be installed and cover drilling for safety on the 290m level doming tunnel as the mining proceeded near old workings. Ground conditions around old workings pose no problem for future mining and actually have the potential to enhance fragmentation but require extra support during development to ensure long term hanging wall stability. Kimberlite development was also delayed while dust suppression systems were installed. The combination of these factors has resulted in approximately a four week delay on the development plan. While the delay is frustrating, management's prime concern is the strict adherence to safe underground working practices and it is imperative that safety is not compromised. There is limited scope for making up the lost time but management is investigating options for accelerating blasting of the slot drive to keep the tonnage ramp-up closer to schedule. Slower tunnel development had a consequential impact on development costs as labour and electricity costs are fixed irrespective of metres drilled and blasted. Development costs averaged R44,193/m against a budget of R37,000/m. It says that pleasingly, operating costs on the underground mining fleet improved during the period as a consequence of the significant expenditure in the previous quarter on OEM exchange-rebuild engines and torque converters. A concerted effort at underground roadway maintenance has also resulted in a reduction in tyre wear. During the period, the upper leg of the conveyor belt tunnel was successfully joined up with the tunnel proceeding downwards from the surface boxcut, providing clear tunnel access for the conveyor belt installation from the production level to surface. Excavation of the underground loading chamber and raise boring of the ore pass to allow UK4 Block kimberlite to be tipped onto the conveyor belt was also completed on time and within budget. The conveyor belt is 99% fabricated, on site, and 75% installed. Final installation and commissioning has been delayed as a result of instructions from the Department of Mineral Resources to install additional anti-roll back idlers in sections of the conveyor belt over and above systems already in place. The additional anti-roll back idlers have been ordered and are scheduled for delivery in the next four weeks. Following installation of the conveyor belt system, load and haul costs are expected to be reduced by over a half, as previously disclosed. K6 and K4 kimberlite processing: Processing of K6 kimberlite from development tunnels in the UK4 Block continued during the period and processing of higher grade K4 kimberlite from production level drives commenced. The delays in kimberlite development outlined above means insufficient K4 kimberlite has yet been processed to complete the requirements of the controlled bulk test being monitored by the company's independent geological consultants. This test will continue during the current period until such time as the recovered diamonds are valued and sold, thereby providing the required grade and diamond value data for the completion of an upgraded resource statement. During the period, the company reported the first recovery of a Type IIa white diamond, which has potential value implications for the entire Lace resource. Management is pleased to report that so far, diamond recoveries from the development K4 kimberlite processed are exceeding expectations with respect to overall quality and the Company is confident that the UK4 operating margins will exceed 70% as previously predicted from microdiamond analysis. * * * Antofagasta (LON:ANTO) has agreed with Barrick Gold to take a 50% stake in CompaÃ±ia Minera ZaldÃvar Limitada. Antofagasta - which will become the operator of the Zaldivar copper mine - will pay a total of $1,005m in cash consisting of US$980m upon closing, subject to customary adjustments, and five annual payments of US$5m per year, starting in 2016. Zaldivar is an open-pit, heap-leach copper mine located in Northern Chile with over 20 years of operating history. In 2014, Zaldivar produced approximately 100,000 tonnes of copper at a net cash cost of US$1.79/lb, and generated US$244 million of income before income tax. As reported by Barrick, as of December 31, 2014, Zaldivar has 2.5 million tonnes of contained copper in proven and probable reserves, which supports a current reserve life of approximately 14 years, with further upside potential through exploration. In addition, as of the same date, Zaldivar has gross assets of US$1.4 billion. * * * Ormonde Mining (LON:ORM) has confirmed that all resolutions proposed at its annual general meeting today were passed. * * * Anglesey Mining (LON:AYM) posts a pre-tax loss of Â£1.7m for the year to the end of March - down from Â£7.2m last time. Revenues edged up to Â£355,071 from Â£353,455 while the company booked an impairment of investment of Â£1.2m compared with Â£5.4m in 2014. Chairman John F. Kearney said: "The expected resurgence in the resources sector that we discussed this time last year has generally not yet materialised and indeed there have been some areas in which confidence has been badly eroded. These matters have made it very difficult for all junior companies operating in the sector, including our own. "The general economic malaise in Europe has now spread somewhat to the US and importantly to China. Whilst there are some areas in which blue sky is appearing the lack of confidence of the investment sector in resources has made raising funding quite difficult." * * * Vedanta Resources (LON:VED) has released to the market its latest production update. Tom Albanese, its chief executive officer, Vedanta Resources, said: "In Q1 we saw continued volatility in commodity prices, but zinc has held up quite well in view of its strong fundamentals and is now the largest contributor to our EBITDA. "We continue to focus on improving efficiency, costs, and enhancing production across our well-invested asset base. We have broken ground at the Gamsberg Zinc project in South Africa, improved production at Konkola mines in Zambia and remain on track to re-start iron ore production at Goa following the monsoons. "Our diversified business model supported by strong operating strengths and structurally low cost assets will enable robust long term returns to stakeholders." At 4:02pm: (LON:ANTO) Antofagasta PLC share price was -14p at 566.5p (LON:AQP) Aquarius Platinum Ltd share price was +0.38p at 6.62p (LON:AYM) Anglesey Mining PLC share price was -0.62p at 1.38p (LON:BEM) Beowulf Mining PLC share price was +0.11p at 1.63p (LON:BKY) Berkeley Resources Ltd share price was 0p at 17.5p (LON:CEY) Centamin PLC share price was -0.55p at 55.15p (LON:CHL) Churchill Mining PLC share price was -1.5p at 33p (LON:CZA) Coal of Africa Ltd share price was +0.05p at 4.2p (LON:DCP) Diamondcorp PLC share price was -0.75p at 11.13p (LON:FDI) Firestone Diamonds PLC share price was 0p at 28.25p (LON:FRES) Fresnillo PLC share price was +1p at 646p (LON:GEMD) Gem Diamonds Ltd share price was +1.38p at 127.38p (LON:HOC) Hochschild Mining PLC share price was -0.62p at 77.63p (LON:KMR) Kenmare Resources PLC share price was -0.05p at 3.55p (LON:ORM) Ormonde Mining PLC share price was +0.01p at 2.38p (LON:VED) Vedanta Resources PLC share price was +13.15p at 398.15p
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