KimCor provides operational update

KimCor Diamonds plc, a diamond producer and exploration company, provides shareholders with an operational update for the Company’s projects in South Africa.

The Company remains on schedule for completion of the Phase 1 upgrade of the SMI4 tailing plant by the end of February. The plant will process tailings at a rate of up to 60,000tpm during March, up from the previous volume of 25,000tpm in 2007. During March, eight 16ft diamond recovery pans will be installed allowing production rates to increase further to a minimum level of 100,000tpm from April this year with an expected production output of 6,000 carats per month. Phase 2 of the upgrade will commence post April 2008 and is expected to further increase the plant’s production capacity to 150,000tpm in August this year.

The underground development programme initiated in September 2007 has advanced well and Newlands is expected to achieve a steady rate of underground ore production at an initial level of 5,000tpm with an average recoverable grade estimated at 23 carats per hundred tonnes (’cpht’). Increased production at this rate is expected to commence early to mid March 2008, following completion of processing plant expansion. The plant expansion will improve recoveries and enable the simultaneous processing of an additional 25,000tpm of tailing material that is stockpiled close to the plant. Test work on this tailing material has returned an average recoverable grade in excess of 7cpht.

Following a detailed review of the geology and resource at Nooitgedacht, the Company has invested in additional heavy plant and machinery to mine and transport diamondiferous gravel for processing through the Nooitgedacht processing plant. Production levels are to be gradually increased from 12,500tpm to the target level of 50,000tpm. In addition, the Company has engaged the services of a new contractor to commence processing an additional 50,000tpm from 20 February 2008. The combined volumes mean that processing plants are operating at capacity, and the operation is expected to process up to 1.2 million tonnes per annum of alluvial gravel.

The Company is currently considering a proposal to contract out both mining and processing at its Bellsbank tailings operation. The proposal would further reduce the already low level cost of the operation and release key personnel to take over the day to day management of the SMI4 plant scheduled for commissioning at the end of February 2008.

Commenting on progress, Martyn Churchouse CEO of KimCor said, we are pleased with the progress being made across all of our operations. The SMI4 plant should be back production by the end of February, and the additional pans will increase production to 100,000tpm. At Newlands, the management has made excellent progress and remain confident that they can maintain the new mining rate, which is double that previously achieved. At Nooitgedacht we will start increasing production towards the target of 50,000tpm. The new contractor is now on site and has completed plant construction and preliminary stripping, and is due to start mining within the week.

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