DIAMOND RESOURCE AND RESERVE REPORT - Firestone .firestone diamonds plc liqhobong mine expansion

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  • FIRESTONE DIAMONDS plc

    LIQHOBONG MINE EXPANSION PROJECT

    DIAMOND RESOURCE AND RESERVE

    REPORT

    October 2015

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    TABLE OF CONTENTS

    1. INTRODUCTION ................................................................................................. 8

    1.1 Purpose of Report ....................................................................................................... 8

    1.2 Project Outline ............................................................................................................ 8

    1.3 Project Location......................................................................................................... 10

    1.4 Topography and Climate ........................................................................................... 12

    1.5 Legal Tenure .............................................................................................................. 13

    1.6 History ....................................................................................................................... 13

    2. PROJECT DATA ............................................................................................... 19

    2.1 Primary Data Elements .............................................................................................. 19

    2.2 Spatial Data Accuracy ................................................................................................ 22

    2.3 Data Management .................................................................................................... 23

    2.4 Data Verification........................................................................................................ 23

    2.5 Geological data .......................................................................................................... 24

    2.6 Density data .............................................................................................................. 25

    3. SAMPLING ........................................................................................................ 27

    3.1 Sampling Method ...................................................................................................... 27

    3.2 Sample Preparation and Treatment .......................................................................... 28

    3.3 Sampling Recovery .................................................................................................... 30

    3.4 Sampling Governance ............................................................................................... 31

    4. DIAMOND RESOURCE ESTIMATE ................................................................. 33

    4.1 Geological Solids and Block Models .......................................................................... 33

    4.2 Density Estimate........................................................................................................ 36

    4.3 Grade Estimate .......................................................................................................... 37

    4.4 Diamond Resource Inventory .................................................................................... 44

    4.5 Revenue Estimate ...................................................................................................... 45

    4.6 Classification .............................................................................................................. 48

    4.7 Reasonable Prospects for Eventual Economic Extraction ......................................... 49

    4.8 Reconciliation against previous Diamond Resource estimate .................................. 50

    5. MINE PLAN ....................................................................................................... 55

    5.1 Introduction............................................................................................................... 55

    5.2 Mining Method.......................................................................................................... 57

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    5.3 Modifying factors ...................................................................................................... 59

    5.4 Mine Design ............................................................................................................... 70

    5.5 Staffing ...................................................................................................................... 83

    5.6 Economic Criteria ...................................................................................................... 86

    5.7 Mine Plan Reconciliation ........................................................................................... 92

    6. TREATMENT PLANT AND ASSOCIATED INFRASTRUCTURE .................... 93

    6.1 Process Design ........................................................................................................... 93

    6.2 Process Description ................................................................................................... 94

    6.3 Process Water Management Strategy ...................................................................... 96

    6.4 Product Security ........................................................................................................ 97

    6.5 Production Planning Parameters .............................................................................. 97

    6.6 Process Operating Costs ............................................................................................ 98

    7. MINE INFRASTRUCTURE AND UTILITIES ..................................................... 99

    7.1 Design Considerations ............................................................................................... 99

    7.2 Power Generation and Site Electrical Reticulation ................................................. 100

    7.3 Roads and Terracing ................................................................................................ 100

    7.4 Accommodation and Offices ................................................................................... 100

    7.5 Maintenance Complex and Fuel Storage ................................................................ 101

    7.6 Explosives Storage and Mixing ................................................................................ 101

    7.7 Potable Water and Sewage Treatment ................................................................... 101

    7.8 Residue Storage Facility (RSF3) ............................................................................... 102

    8. ENVIRONMENTAL AND SOCIAL CONSIDERATIONS ................................. 104

    9. GOVERNMENTAL CONSIDERATIONS ......................................................... 105

    10. MARKETING ................................................................................................... 106

    11. RISKS .............................................................................................................. 108

    12. DIAMOND RESOURCE AND RESERVE STATEMENTS .............................. 109

    13. COMPLIANCE STATEMENTS ....................................................................... 112

    13.1 Diamond Resource Statement of Competence and Compliance ........................... 112

    13.2 Diamond Reserve Statement of Competence and Compliance ............................. 113

    REFERENCES ....................................................................................................... 114

    APPENDIX 1. Annual LoM plan ........................................................................... 116

    APPENDIX 2. Ore Dressing Study summary information ................................. 117

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    LIST OF FIGURES

    Figure 1. Geology map with kimberlite occurrences (Leroux, 2010) ...................................................... 9

    Figure 2. Location of Liqhobong kimberlite bodies (Leroux, 2010) ...................................................... 10

    Figure 3. Location map (Leroux, 2010) ................................................................................................. 11

    Figure 4. Mining Lease area map .......................................................................................................... 12

    Figure 5. Pilot Plant at Liqhobong Mine. ............................................................................................... 17

    Figure 6. Bulk sampling and WDD locations ......................................................................................... 20

    Figure 7. Section through Main Pipe showing a number of delineation and WDD holes .................... 21

    Figure 8. Down hole facies characteristics of the Main Pipe drill holes (Rapopo, 2015). .................... 25

    Figure 9. Plan view of the 2014 (outlines) and 2009 (solid) geological model ..................................... 34

    Figure 10. Section looking east through the 2009 (black) and 2014 geological solids ......................... 35

    Figure 11. Fitted variogram model for K2. ............................................................................................ 38

    Figure 12. Fitted variogram model for K5. ............................................................................................ 38

    Figure 13. Bench profile plot of composite sample data compared to optimised first pass kriged

    estimates for the K2 and K4 facies. ....................................................................................................... 40

    Figure 14. Bench profile plot of compo