The Newlands mine is located about 60 kilometres northwest of Kimberley, on the Harts River. The mine was re-commissioned in August 2005 and production, involving the processing of both tailings and underground ore, commenced in September of that year.

Newlands is a producing underground mine undergoing expansion. The resource comprises a number of kimberlite fissures connecting a series of five kimberlite pipe structures known as 'Blows', of which two are currently being mined.

The mine infrastructure includes two operating shafts and a fully functional processing plant. In addition, a small test shaft has been sunk and horizontal development excavated to connect Blows 3 and 5 from where bulk samples are currently being tested.

At present production is focused on the No.2 shaft with ore being mined between the 110m and 120m levels. Future production will concentrate on the mining of ore around the No.2 shaft from the 110m level through to surface as well as from depth below the current 120m level. Additional production may be generated from blows 3 and 5 depending on the results of on-going bulk sampling.

Diamond grades in the Blows range from 14.4-25.0cpht. The stones have traditionally been small (1 to 5 carats) but of high relative value. The Group intends to capitalise on diamond production by adding value through cutting and polishing of the majority of 1 to 5 carat stones recovered.

KimCor has implemented a capital programme on the mine which will achieve the following:

• Expansion and upgrade of the existing processing plant to accommodate an increased tonnage of up to 6,000 tonnes of underground ore per month. With planned expansion of underground development and production from additional working faces, the plant will need to double capacity;
• Additional underground development to provide future production capacity, a deepening of the shaft and therefore access to the lower levels of Blow 2 and exploratory and evaluation development into known fissure extensions and the remaining 4 Blows already identified with the objective of generating long-term feed for the mine. The Company is conscious of the fact that it must invest capital in the on-going commitment to further shaft deepening and horizontal development to access more of Blow 2. In addition, it is essential to commence exploratory development on Blows 3 and 5 to ensure that evaluation is sufficiently far ahead of future production needs such that adequate lead-time exists for future mine development;
• Increased diamond recovery through a combination of increased production rates and improved plant operating efficiency. Presently, the crushing infrastructure at Newlands makes provision for the reduction in the size of kimberlite to approximately a 12 to 15mm fraction. The Company is of the opinion that installation of a tertiary crusher and the reduction of the coarse component of the tailings to a -6mm fraction will result in the liberation of additional diamonds;
• A future emphasis to be placed on the processing of the estimated 282,000 tonnes of tailing material located at surface as a potential low cost feed; and
• A reduction in operating costs attributable to the increase in production and associated economies of scale.