DIAMCOR MINING INC. TSX.V Symbol (DMI)
KELOWNA, BC, Dec. 4, 2014 /PRNewswire/ - Diamcor Mining Inc. (TSX-V.DMI / OTCQX-DMIFF), (the "Company") achieved a significant milestone during its second fiscal quarter ended September 30, 2014: a full Mining Right from the South African Department of Minerals and Resources was granted in respect of the Company's Krone-Endora at Venetia project (the "Project").
The Mining Right has a 30 year term and grants the Company, subject to customary terms and conditions, the sole and exclusive right to mine and recover minerals on the mining area encompassing 657.71 hectares within the Project's total area of 5,888 hectares. The Project is located directly adjacent to De Beers' flagship Venetia Diamond Mine in South Africa, and the associated deposits have been identified as being the result of the direct-shift and erosion of material from the higher grounds of the adjacent Venetia Kimberlite areas. The near surface nature of the deposits provide the potential for a low-cost mining operation with near-term diamond production from a known high-quality diamond source. An additional application for a Mining Right over the remaining areas of the Project has also been submitted by the Company. To date, the Company has financed, developed and completed the design, construction and installation of extensive infrastructure at the Project to support the Project's advancement. During the current fiscal quarter, preparations continued in connection with updating the Company's initial NI43-101 technical report. Once filed, the updated report is expected to reflect the nature and extent of the infrastructure development achieved at the Project, as well as other relevant data available to this point. The Company plans to complete trial mining exercises, and additional bulk sampling and exploration exercises, on various areas including those areas surrounding the current areas of focus, and the results of these exercises will be incorporated into subsequent NI43-101 report(s) and will be used to assist the Company in arriving at final production decisions for the Project.
For the fiscal quarter ended September 30, 2014, the Company sold 3,449.32 carats of rough diamonds generating gross revenues of $609,058, net of commissions and fees, for an average price of US $168 per carat. The Company recovered an additional 1,534 carats during the quarter which were held in inventory at the end of the fiscal quarter.
During the fiscal quarter ended September 30, 2014, the Company incurred operating expenses of $239,339, a 62% reduction when compared to $637,675, realized in the same period during the prior fiscal year. Operating expenses are primarily management, contracted labour, equipment, utilities, fuel, and other expenses incurred at the Project. The significant reduction in operating expenses is primarily attributable to reduced labour, contracted equipment and fuel requirements in the current quarter, as compared to the same period during the previous fiscal year due to infrastructure expansions to the Company's dry screening and treatment plants during the current fiscal year which have resulted in the automation of several processes that were previously manual. The Company realized net income from operating activities of $369,719 during the quarter ended September 30, 2014.
Total general and administrative expenses for the fiscal quarter ended September 30, 2014 were $785,808, as compared to $2,928,259 realized in the same period during the prior fiscal year. The significant reduction in general and administrative expenses is primarily attributable to the recognition of stock based compensation expenses of $2,170,000 realized in the same period during the prior fiscal year ended September 30, 2013. There were no stock based compensation expenses in the current fiscal quarter ended September 30, 2014. General and administrative expenses during the fiscal quarter included accretion and depreciation expenses of $228,401, and interest and bank charges of $171,277 which primarily relate to the Company's financings with Tiffany & Co.
For the fiscal quarter ended September 30, 2014, the Company incurred a net loss before income tax of $409,896 or $0.01/share, as compared to a net loss before income tax of $2,476,662, or $0.07/share, realized in the same period during the prior fiscal year ended September 30, 2013. Net cash flow used in operating activities for the recent fiscal quarter was $132,917.
The recovery of all rough diamonds during the fiscal quarter ended September 30, 2014, was incidental to the ongoing commissioning and testing exercises performed at the Company's Krone-Endora at Venetia project. The above-noted testing exercises and incidental recoveries do not form part of the initial NI43-101 Technical Report filed by the Company on July 30, 2009, and thus no general grade, price, or quality determination is intended by the Company at this time due to the nature and purpose of the processing of this material.
The Company's complete financial results and associated Management Discussion and Analysis for its second fiscal quarter ended September 30, 2014, can be accessed at www.sedar.com, or on the Company's website at www.diamcormining.com.
About Diamcor Mining Inc.
Diamcor Mining Inc. is a fully reporting publically traded junior diamond mining company which is listed on the TSX Venture Exchange under the symbol V.DMI, and on the OTC QX International under the symbol DMIFF. The Company has a well-established operational and production history in South Africa and extensive prior experience supplying rough diamonds to the world market.
About the Tiffany & Co. Alliance
The Company has established a long-term strategic alliance and first right of refusal with Tiffany & Co. Canada, a subsidiary of world famous New York based Tiffany & Co., to purchase up to 100% of the future production of rough diamonds from the Krone-Endora at Venetia Project at then current prices to be determined by the parties on an ongoing basis. In conjunction with this first right of refusal, Tiffany & Co. Canada also provided the Company with financing to advance the Project. Tiffany & Co. is a publically traded company which is listed on the New York Stock Exchange under the symbol TIF. For additional information on Tiffany & Co., please visit their website at www.tiffany.com.
About Krone-Endora at Venetia
The deposits which occur on the properties of Krone and Endora have been identified as a higher-grade "Alluvial" basal deposit which is covered by a lower-grade upper "Eluvial" deposit. The deposits on Krone-Endora occur in two layers with an average total depth of less than 15.0 metres from surface to bedrock, allowing for a very low-cost mining operation with the potential for near-term diamond production from a known high-quality source. Krone-Endora also benefits from the significant development of infrastructure and services in place due to its location directly adjacent to the Venetia Mine.
Qualified Person Statement:
Mr. James P. Hawkins (BSc., P.Geo), is Manager of Exploration & Special Projects for Diamcor Mining Inc., and the Qualified Person in accordance with National Instrument 43-101 responsible for overseeing the execution of Diamcor's exploration programmes and a Member of the Association of Professional Engineers and Geoscientists of Alberta ("APEGA"). Mr. Hawkins has reviewed this press release and approved of its contents.
On behalf of the Board of Directors
Mr. Dean H. Taylor
President & CEO
Diamcor Mining Inc.
DTaylor@diamcormining.com
Tel (250) 864-3326
www.diamcormining.com
This press release contains certain forward-looking statements. While these forward-looking statements represent our best current judgement, they are subject to a variety of risks and uncertainties that are beyond the Company's ability to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Further, the Company expressly disclaims any obligation to update any forward looking statements. Accordingly, readers should not place undue reliance on forward-looking statements.
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SOURCE Diamcor Mining Inc.
