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Goodrich Resources finalises WA diamond mine acquisition  Join our daily free Newsletter

MENAFN - ProactiveInvestors - Australia - 04/02/2013

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(MENAFN - ProactiveInvestors - Australia) Goodrich Resources (ASX: GRX) has added the Ellendale Diamond Mine to its portfolio with the completion of the acquisition of the mine's operator, Kimberley Diamond Company, from Gem Diamonds Limited (LSE: GEM).

The Ellendale Mine, which covers 123.9 square kilometres, is located around 120 kilometres east of Derby in the West Kimberly Region of Western Australia.

The purchase of the Ellendale Mine delivers immediate revenues from production and adds substantial value to Goodrich's portfolio of assets.

For the financial year ending 31 December 2012, Kimberley Diamond Company will report EBITDA of 16.5 million, based on unaudited management accounts and excluding the effects of non-recurring items.

Goodrich has acquired 100% of the share capital of Kimberley Diamond Company, which holds a 100% interest in Ellendale.

Additionally, Kimberley Diamond Company holds an 8.4% interest in Blina Minerals (ASX: BDI), which holds exploration ground adjacent to Ellendale.

Ellendale Diamond Mine

Ellendale is the world's leading source of rare fancy yellow diamonds and contributes an estimated 50% of the world's supply.

The mine hosts an Indicated and Inferred Resource of 91.3 million tonnes at an average grade of 4.35 carats per hundred tonne (cpht), as well as Probable Reserves of over 6 million tonnes at 4.38cpht.

A recent increase in the floor price of fancy yellow diamonds enabled the tonnes remaining in the existing E9 pit to be increased from 3.1 million tonnes to 4.2 million tonnes.

Processing of E9 stockpiles is scheduled to continue until February 2015.

Production upside

Several potential sources of additional ore have been identified that may enable operations to be extended beyond 2015.

At the previously-mined E4 pipe, 1.2 million tonnes of high grade ore remains on the run of mine pad and a further 1 million tonnes of ore is exposed in the pit. A further 1.8 million tonnes is available at E4 via a cut-back.

To the immediate east, the E4 Satellite pipe contains an Inferred Resource of 15.3 million tonnes, and sampling to date suggests this pipe is mineable at present diamond prices.

At E9, the current operation, an Indicated and Inferred Resource of about 12 million tonnes may be mineable via a cut-back with modest improvements in diamond prices and mining costs.

Additionally, a surface stockpile consisting of processed residues and unprocessed oversize ore, variably estimated at 10 to 14 million tonnes, will be evaluated as a potential low-cost resource.


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