Perth, July 10, 2006 AEST (ABN Newswire) - A move to rapidly boost its African diamond production with the installation of a larger processing plant has been announced by Perth-based Mineral Commodities Limited (ASX: MRC).

ASX-listed Mineral Commodities has awarded a A$2 million contract to ProMet Engineers Africa (Pty) Ltd to manufacture and delivery a new 60 tonne per hour (tph) diamond pan plant to the Australian producer's Karibo Kono No 11 Oversize Tailings Dump project near Sefadu, in the Kono district of eastern Sierra Leone.

In addition, Mineral Commodities is to acquire the remaining half share it does not own in another tailings dump just a kilometre away from No.11 and from where diamonds have been recovered from hand mining.

Both decisions closely follow Mineral Commodities' completion last month of the A$2.8 million acquisition of the remaining 73.7% shares it did not own in Karibo Kono's previous owner, UK-based public company, Erebus plc.

"Delivery of the larger plant is expected by mid September with commissioning completed no later than mid November this year," Mineral Commodities' Managing Director, Mr Mark Caruso, said today

"In the interim period ahead of commissioning, we have also contracted ProMet to oversee the operation of the current 5 tph jig to conduct bulk sampling and implement operating procedures," Mr Caruso said.

"While the jig has recovered 28 diamonds for a combined weight of 7.8 carats from an estimated throughput of 100 to 150 tonnes of material, it is really inadequate for the commercial potential of Karibo Kono which has the potential for higher throughout and higher diamond recovery rates."

Acquisition of second tailings dump

Mr Caruso said the acquisition of the nearby Dump No. 5 would provide the Company with further latitude to expand its diamond production within the Kono district.

Mineral Commodities has entered into an agreement with Mohagib Enterprises Limited to acquire Mohagib's 50% interest in the No.5 dump, the remaining half held for Mineral Commodities through its Leonaust Mining Company Limited. Upon settlement, Leonaust will become a 100%-owned subsidiary of Mineral Commodities.

The terms of the sale include a US$50,000 upfront payment, the issue of 1.8 million shares in Mineral Commodities at an issue price of A$0.30 per share and a second subsequent payment of US$100,000 to Mohagib when the new plant reaches a mining rate of 200 tph.

Mr Caruso said records of mining operations in the No 5 dump area in the early 19060s reported grade recoveries of 1.025 carats per cubic yard.

"While the Company is not relying on these figures in terms of resources, we do take a measure of comfort from this earlier hand mining work," Mr Caruso said.

As well as a stake in the Xolobeni and Tormin mineral sands projects in South Africa, Mineral Commodities is also a substantial shareholder in emerging Papua New Guinea ASX/AIM listed gold explorer, Allied Gold Limited, whose Simberi oxide gold project is scheduled for first production next year.

About Mineral Commodities Ltd

Exploration for gold and other mineral resources and developing mineral recovery technologies.



Mark Caruso
Mineral Commodities Ltd
TEL: +61 8 9353 4890

Kevin Skinner
Field Public Relations
TEL: +61 8 8234 9555 (0414 822 631)

Related Companies

Mineral Commodities Ltd
Allied Gold Limited       

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