bullet point Feasibility completed - targeting initial production in late 2007
  bullet point Profitable, low capex, low operating cost project
   
  bullet point 330,000 carats/yr
  bullet point Low capital cost - approx. A$24 million (assumes contract mining)
  bullet point US$100m operating cashflow on US$230m revenue over 10 years
  bullet point Rapid capital payback
  bullet point Five diamondiferous kimberlite pipes ranging up to 2.34 hectares in surface area - all exposed at surface
  bullet point Estimated Indicated Diamond Resource of 13.5 million tonnes at an average grade of 27.41 carats per hundred tonnes, to a depth of 110 metres below surface, based on a +1mm bottom cut-off screen. There is considerable potential to further increase the total resource both at Lerala and in the surrounding area.
  bullet point Indicated Diamond Resource Table
   
   
 
Kimberlite pipe
Tonnes (millions)
Grade (cpht)
K2
3.4
24
K3
6.7
29.86
K4
1.5
28.4
K5
1.9
24.14
TOTAL
13.5
27.41
     
  bullet point DiamonEx estimates the weighted average diamond value to be US$53 per carat using a bottom cut-off of 1mm increasing to US$59 per carat using a cut-off of 1.5mm. (Estimates based on work by independent diamond valuer WWW International Diamond Consultants Ltd, October 2005.)
  bullet point Heavy mineral sampling at the Martin's Drift Prospecting Licence area which encompasses the Lerala mine has indicated the presence of further diamondiferous kimberlites close to the Lerala mine.
  bullet point Identification of a significant number of magnetic anomalies which have signatures similar to those generated by kimberlite pipes and dykes within the adjoining Tuli exploration tenement provides upside potential for the discovery of further regional diamond resources.
  bullet point HISTORY
   
  bullet point DiamonEx was awarded the exploration concessions over the Martin's Drift project area by the Botswana Government in August 2002.
  bullet point The Lerala kimberlites which lie within the Martin's Drift project area were originally discovered by De Beers in 1991 and 1992.
  bullet point Following a period of trial mining between 1997 and 2001 it was concluded that the pipes could not be mined economically. However, a detailed review of the trial mining report indicated that the project failed to achieve the expected diamond recovery partially through sustained plant inefficiencies, partially through unquantified theft and partially through inaccurate assumptions as to the nature of the kimberlites being mined.
  bullet point DiamonEx has since processing tailings material from the trial mining operation and recovered diamonds which confirms its thoughts on the deficiencies of the earlier trial mining operation and it incorrect conclusion on project economics.
  bullet point Since being granted the concession in 2002, DiamonEx has added significantly to the extensive work completed by previous owners. The result was a 27% increase in the estimated diamond resource and independent verification of diamond value. Work completed by DiamonEx included:
  bullet point DiamonEx has completed a feasibility study into the development of the Lerala project and is targeting initial production in late 2007. The study indicates a profitable, low capex, low operating cost project.
   
  bullet point Drilling of 17.5" diameter sampling holes over all 5 diamondiferous pipes to provide samples for grade determination and valuation work
  bullet point Drilling of 6.5" diameter evaluation holes to define the pipe dimensions for resource confirmation work
  bullet point Extraction of bulk samples totalling 5,000 tonnes for grade and diamond valuation purposes
  bullet point Processing of samples through an on-site test plant using dense media and x-ray diamond separation techniques - the resultant parcel of 1100 carats of diamonds was used for valuation
  bullet point DiamonEx has completed a feasibility study into the development of the Lerala project and is targeting initial production in late 2007. The study indicates a profitable, low capex, low operating cost project.