2009


Diamcor Announces Filing of Independent National Instrument 43-101 Technical Report for Pending Krone-Endora Acquisition



July 30, 2009

July 30, 2009, KELOWNA, BC – Diamcor Mining Inc. (TSX-V:DMI) (the “Company”) is pleased to announce it has received the required NI43-101 independent technical report (the “Technical Report”) for the Krone-Endora Alluvial Diamond Project (the “Krone-Endora Project”) and will be filing the Technical Report on SEDAR concurrently with this news release.

The Company, through its subsidiary DMI Minerals South Africa (Pty) Limited (“DMI Minerals”), and in conjunction with its 30% Black Economic Empowerment partner Nozala Investments (Pty) Ltd., is in the process of finalizing its acquisition of the Krone-Endora Project from De Beers Consolidated Mines Ltd. (“De Beers”), the details of which were originally announced on December 22, 2008. The Technical Report being filed as part of the acquisition process was authored by the Independent Qualified Person (as defined by NI43-101), J.F. Grobbelaar [Pr.Sci.Nat] MGSSA, of Geo-Rock International (Pty) Ltd. (“Geo Rock”) of South Africa. De Beers had completed various exploration programmes on the Krone-Endora Project over an extended period of several years including a number of different types of drilling programmes, an initial bulk sampling programme and the procurement of their own non-NI43-101 compliant mineral resource estimate report for their internal use only. The Company was provided with all relevant reports, information and the datasets from the various exploration efforts under an executed License Agreement and as part of its acquisition due diligence efforts. This information was then independently reviewed, re-interpreted and re-analysed by Geo-Rock, thus facilitating the provision of the Technical Report being filed.


TECHNICAL REPORT HIGHLIGHTS

  • Inferred resource estimate of 54,258,600 tonnes of diamond-bearing gravels occurring in two near-surface litho-stratigraphic units.
  • Inferred resource estimate of 1.3 million carats of diamonds.
  • Conclusion deposit is not only an “alluvial” deposit, but a combination of an alluvial and eluvial deposition indicating an expected “direct shift” of basal or lower source material from the higher grounds of Venetia area.
  • Due to above, the diamond deposit mineralization appears generally uniform throughout deposit which is unique, as opposed to that of a typical higher risk alluvial deposit whereby large areas can be barren with only intermittent individual trap sites bearing diamonds.
  • Historic exploration provides significant understanding of deposit formation and an ability to define three main deposit areas of project, consisting of two primary areas, termed after their expected originating sources as the K1 and K3 areas, as well as the confluence area in which the two primary deposits merge.

Classification of project as late-stage exploration, with recommendation for additional closer grid drilling to obtain more detailed contact depths and gravel thicknesses, locate possible positions for small-scale trap-sites, and outline enriched mining zones for desired near-term trial mining exercise.

Summary of Current Independent Resource Estimate

 
K1 Zone
K3 Zone
Confluence Zone
Total
Upper Gravel Zone
       
Estimated diamond value (US$/carat
$70.00
$70.00
$70.00
$70.00
Estimated grade (carats per hundred tonne)
3.45
0.07
1.09
1.63
Estimated total tonnes
16,467,000
14,751,000
12,870,000
44,088,000
Estimated diamonds within zone (carats)
568,000
10,000
140,000
718,000
Basal Gravel Zone
Estimated diamond value (US$/carat)
$130.00
$130.00
$130.00
$130.00
Estimated grade (carats per hundred tonne)
12.74
0.13
1.20
5.86
Estimated total tonnes
4,402,200
3,139,400
2,629,000
10,170,600
Estimated diamonds within zone (carats)
561,000
4,000
31,000
596,000
Total Estimated Diamonds (carats)
1,129,000
14,000
171,000
1,314,000

PROJECT INFORMATION

The Krone-Endora Project is located on the De Beers owned farms of Krone 104MS and Endora 66MS which are located directly adjacent to the De Beers owned Venetia Diamond Mine in the Limpopo province of the Republic of South Africa, approximately 500 km north-northeast of Johannesburg. Based on published reports, the Venetia mine is widely accepted to be South Africa’s largest diamond producer. The Krone-Endora Project’s location, being directly adjacent to Venetia, is of significant relevance in the resulting alluvial / eluvial deposit identified, as it is proposed to have been formed as a direct result of the erosion of a significant quantity of material from the higher grounds of the Venetia kimberlite clusters onto the lower grounds of Krone and Endora.

The Krone-Endora Project area has been divided into three major deposit zones in all previous exploration efforts and reporting to date, namely the K1 Zone, the K3 Zone and the Confluence Zone. The names are based on each Zone’s relationship to the corresponding ancient (paleo) drainage systems which appear to have created the deposits in each area. The K1 Zone lies primarily over the identified paleo-drainage channel sourcing material from the Venetia K1 kimberlite pipe, while the K3 Zone has been identified as relating a paleo-drainage channel sourcing material from the Venetia K3 kimberlite pipe. The Confluence Zone represents the Zone where these two paleo-drainage channels are believed to have converged.

Each of the three zones identified has been subjected to various drilling and exploration programmes in an effort to determine initial estimates on the location and depths of both Upper, and Lower (Basal) Gravels which occur in each Zone. Datasets from 133 drill holes, and three bulk sample pits were independently reviewed, re-interpreted and re-analysed by the Independent Qualified Person to calculate the resulting inferred resource estimates in the Technical Report. Methods of diamond recovery from the samples were done using a purpose-built, on-site sampling plant to treat the 1995 Large Diameter Auger (LDA) samples during which samples were collected in 1 metre lifts. Each sample was passed though a 150 mm grizzly (screen) before entering a scrubber to remove any soils/mud from the material. After further screening, material that was under 12 mm but over 1 mm was put through a Dense Media Separation (DMS) plant with a 200 mm cyclone with a 40 mm spigot (the oversize material (greater than 12 mm in size) was stored for crushing and re-treatment at a later stage). Final recovery of the diamonds took place at the De Beers Diamond Research Laboratories. Bulk samples from the test pits were treated to the point where a DMS concentrate was obtained for each sample. A mobile DMS plant was then used with a 250 mm cyclone with 57 mm spigot. Each sample passed through a 100 mm grizzly. Oversize material was broken down and the remainder passed into a primary scrubber-trommel with 16 mm apertures. The under 16 mm but over 1 mm material was subjected to secondary scrubbing before passing over a prep screen and then processed using the DMS to obtain the concentrate. The over 16 mm material was crushed down and treated as a separate sub-sample. Final recovery of the diamonds from the samples of Pit 1 took place at De Beers’ GEMDL (Group Exploration Macro Diamond Laboratory) in Johannesburg while the diamonds from the samples of Pit 2 were recovered at De Beers’ KMSP (Kimberley Mines Sampling Plant) in Kimberley. All samples were based on a bottom cut-off size of 1mm (+2 sieve).

The initial assessment of diamond price for the inferred resource estimate was provided by the Independent Qualified Person who considered detailed historical comparisons of size-frequency distribution (SFD) models from Venetia against sample data from both the 1995 LDA exploration results (for the Upper gravels), and the sample data from bulk Pits 1 and 2 (for the Basal gravels), in which all data yielded very similar results. Diamond valuation estimates provided were based on the review of a total parcel size of 368.69 carats of rough diamonds recovered which was made up of 336.87 carats recovered from sample Pits 1 and 2 during the bulk sampling programme and a further 31.82 carats recovered during the LDA drilling programme. The initial diamond valuation estimates provided were determined to be reasonable for use as a guideline for the resource estimate and were based on a review of the credible historical information available, and the more than two decades of past experience in the assessment of rough diamonds from both kimberlites and alluvial properties throughout Southern Africa by the Independent Qualified Person.

All historical information provided and the conclusion of the Independent Qualified Person both support the theory that the manner and time-frame in which Upper and Lower (Basal) Gravels were deposited are different resulting in their different corresponding characteristics. Due to these characteristic differences they were reported separately when determining the size and scope of the property’s potential gravel deposit.

The independent resource estimate done by Mr. Grobbelaar in the Technical Report has identified potentially higher value areas based on the following criteria:

  • the K1 paleo-drainage system (the Venetia K1 kimberlite pipe being a higher grade source than the Venetia K3 kimberlite pipe)
  • the basal unit (better mobile trapsite development and flow energy than upper unit)
  • the more proximal (eastern) reaches of the deposit (coarser sediment and therefore improved mobile trapsite potential)

the diamonds found in the basal gravels have a higher estimated average diamond value than those in the upper gravels (US $130.00/carat, as compared to US $70.00/carat)

Readers are cautioned that the inferred resource estimate contained in the Technical Report is a resource estimate only in respect of which no economic analysis has been undertaken. Certain assumptions have been made in respect of diamond prices, values and grades. Estimates of diamond grades and values are based on limited sampling that may not be representative of actual diamond production. Interested parties can access more detailed general project information by reviewing both the Company’s press release dated March 3, 2009, and the above mentioned full NI43-101 Technical Report which will be filed concurrently with this release on SEDAR at www.sedar.com.


ACQUISITION STATUS AND FUTURE WORK

As announced on December 22, 2008, the parties to the Acquisition negotiated and executed a definitive sale of assets agreement (the “Agreement”) at that time, and the payment of a required initial R1 500 000.00 (approximately CAD$200,000.00) deposit was provided by the Company. The Acquisition was considered a reviewable transaction and therefore subject to regulatory approval by the TSX Venture Exchange (the “Exchange”), and the Company submitted all appropriate related information to receive conditional approval to proceed with the Acquisition. The NI43-101 compliant Technical Report was submitted, reviewed, and accepted by the Exchange thus satisfying that element of the Acquisition process.

The companies continue to collectively work to satisfy the remaining closing conditions. These include; the signing of a sole, royalty-free license for the use of the geological data by the Company, which has now been completed; the signing of a Rights of Access Agreement to the properties by the parties, which is now in final draft form; the preparation, submission, and acceptance of the renewals of the associated prospecting rights by De Beers, which has now been completed, thus clearing the way for the submission of applications for acceptance to secure ministerial consent in terms of section 11 of the Minerals and Petroleum Resource Development Act, No. 28 of 2002 for the transfer of the associated prospecting rights and environmental and rehabilitation liabilities from De Beers to DMI Minerals; De Beers conclusion of their due diligence of the direct and indirect shareholders of DMI Minerals to ensure such shareholdings will be acceptable to the South African Department of Minerals and Energy as set forth by the Broad-Based Socio-economic Empowerment objectives, which is currently in process; the granting by the Department of Water Affairs of a water license to DMI Minerals with respect to a suitable water allocation, and a suitable solution for the conveyance of that water allocation to the prospecting area on terms acceptable to both parties, which the parties have been working together on to secure with several options currently being investigated; and, upon completion of all remaining conditions of closing, the final payment of R12 500 000.00 (approximately CDN$1,750,000 as at July 28, 2009).

“We are very pleased to now be in a position to file the required NI43-101 Independent Report, which confirms our own internal due-diligence with regards to the potential of the Krone-Endora Project and its very positive long term impact for the shareholders of our Company”, stated Mr. Dean H. Taylor, CEO of Diamcor Mining Inc. “The collective efforts and co-operation of all parties involved from both sides to date has been excellent, and we look forward to working through the remaining closing conditions without delay”, added Taylor.

Upon successful completion of the Acquisition, the Company plans to immediately proceed with the recommended work programmes as outlined in the Technical Report. The Company believes that the recommended additional drilling at 100 x 100 meter intervals will further enhance the already promising information gathered from previous efforts, and allow it to identify and target areas for the more extensive recommended initial trial mining exercise and future production planning.


ABOUT THE COMPANY

Diamcor Mining is a junior resource company with established operations and production history in South Africa. The Company is determined to use this established operating history and industry knowledge to achieve economic production of diamonds through the development and/or acquisition of quality properties in the region.

On behalf of the Board of Directors

Mr. Dean H. Taylor
CEO
Diamcor Mining Inc.

Requests for additional information may contact:

Mr. Dean Taylor
CEO
Diamcor Mining Inc.

E-mail: dtaylor@diamcormining.com
Website: www.diamcormining.com

Phone: 1 (250) 862-3212 Ext 206
Fax: 1 (250) 862-3214


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 programs and a Member of the Association of Professional Engineers, Geologists, and Geophysicists of Alberta (“APEGGA”). Mr. Hawkins has reviewed this press release and approved of its contents.

Mr. J. F. Grobbelaar (Pr.Sci.Nat) MGSSA of Geo-Rock International (Pty) Limited, is the independent Qualified Person who prepared the Technical Report on the Krone-Endora Project. Mr. Grobbelaar has over 22 years experience as geologist, with the last 10 years focused on the alluvial diamond fields of central South Africa, Namibia, and in the Democratic Republic of the Congo (DRC) as a consultant to various small, medium, and large-scale companies. Mr. Grobbelaar has reviewed this press release and approved of its contents.


This press release contains certain forward-looking statements. While these forward-looking statements represent our best current judgment, 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. This news release is not for dissemination in the United States, to “U.S. Persons” or to United States of America news services.

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