Kimberley Diamond Company NL (KDC) is the tenement holder of Mine Lease M04/372, and Miscellaneous Licenses L04/26 and L04/48 located 140 km east of Derby in the West Kimberley region of Western Australia, in the Shire of Derby/West Kimberley.   KDC conducts open cut mining and ore processing at the Ellendale Diamond Project (The Project) producing rare fancy yellow diamonds on mining lease M04/372 (the mining lease).  The Project includes Ellendale 4 (E4) and Ellendale 9 (E9) open cut mine pits and various other lamproite deposits and prospects.  Tenement and cadastral information for the Project is shown on Figure 1 and the location is shown on Figure 2 in the attachment KDC AER_Jan-Dec 2013 Environmental Group Site - Site Summary.  The Project is owned and managed by the Kimberley Diamond Company NL (KDC) a wholly-owned subsidiary of Kimberley Diamonds Ltd (KDL).  Goodrich Resources Ltd acquired KDC from South African based Gem Diamonds Limited (GEMD) on 4 February 2013, subsequently changing the company name to KDL on 6 May 2013. KDC was first listed on the Australian Stock Exchange in July 1997.   

Mining Lease M04/372 covers 12,385ha.  This is a substitution lease by virtue of a variation to the Mining Lease 275 SA of the Diamond (Argyle Diamond Mines Joint Venture) Agreement Act 1981.  Fifty-one conditions are attached to the mining lease M04/372.  All mining, exploration and processing activities occurred on Mine lease M04/372, which is the only mining lease Kimberley Diamond Company hold.

An exploration programme consisting of reverse circulation drilling at E9 Far East Pit and Ellendale 6, excavation and treatment of a 17,600 tonne bulk sample at E4 Satellite and testing and evaluation of the E9 coarse tailings dumps was completed during the year to extend the mine life.

There are two mining operations at Ellendale: E4 and E9, both located on mine lease M04/372. The Ellendale 4 operation includes the mine pit, three waste rock dumps (north 1, north 2 and South/ROM), lights stockpile, a tailings facility (TSF2A) and a return water pond.  The site has remained on Care and maintenance since February 2009 and there was no mining, ore processing or variations to the waste dumps, the low grade stockpile, or the coarse tailings (Lights) stockpile, processing activities or ancillary operations conducted at E4 during the reporting year.  Deposits at E4 were re-assessed using results from the treatment of a 17,600 tonne bulk sample from the E4 Satellite deposit.  As a result of this, further development approvals are expected to be submitted for Area 5 and the E4 Satellite deposit. KDL announced in March that E4 would be taken off care and maintenance and put into production by September 2014.  A JORC compliant revised mineral resource estimate was announced in November 2013 indicating that E4 and E4 Satellite have an indicated resource (excluding mining waste) of 4,959,000 tonnes (and an additional 63,741,000 tonnes inferred). Indicated ore resources (excluding mining waste) at E9 are estimated at 6,951,000 tonnes (and an additional 2,576,000 tonnes inferred).

Active mining during the reporting year occurred in the E9 open cut mine pit mainly from the East and also from the West pitfrom March to June in 2013, when mining operations were suspended for safety reasons following a routine blast in the E9 open pit. Mining is scheduled to recommence at the end of the 2013-2014 wet season.  Production continued from Run of Mine (ROM) ore stockpiles.  The East Plant at E9 was operated for the duration of the reporting year. The West Plant remained on Care and Maintenance.  Tailings generated from the East Plant were deposited into Cell 4 of TSF1D during the reporting year, with discharge into cell 3 on an as required basis in December. 

Throughout the reporting period approximately 4,668,937 tonnes of material was mined during the year which includes 1,340,149 tonnes of ore, 1,519,273 tonnes of waste rock, 1,511,138 tonnes of oversize and 298,377 tonnes of low grade ore.  The volume mined is significantly lower than previous years due to suspension of mining in June 2013 due to a slip of the pit wall beneath the main access ramp.  Of the mined material, 4,094,095 tonnes were processed through the E9 East processing plant at an average rate of 579t/h, resulting in 2,682,916 tonnes of fine tailings (“slimes”) generated from the East Plant, which were directed to Tailings Storage Facility (TSF) 1D Cell 4 and 1,477,023 tonnes of coarse tailings were transferred to active lights stockpiles. 

The available freeboard in TSF1D at 31 December 2013 is 2.31m (the level of the pool in cells 2 and 3 are linked by the spillway into cell 4) which is higher than the required freeboard of 1.55m (comprising 0.7m for a 1 in 100, 72 hour rainfall event plus the minimum operating freeboard of 0.85m).  It is estimated that TSF1D Cell 4 will reach storage capacity by April 2014.  Decant water from active TSF1D cell 4 is pumped to the Return Water Dam (RWD) which is pumped back to the processing plant for re-use.  An approval (Reg iD 43441) has been approved to raise the height of the embankment walls of existing TSF 1D to provide adequate tailings storage capacity until the end of 2015.  A trial flocculent plant was commissioned in June to improve consolidation of tailings and increase the volume and quality of return water available to the E9 process plant. 

Generators at E9 produce up to 6mW of power.  These are supported by a bulk diesel storage facility that can accommodate 785,000L of diesel, which supports all vehicles and power generation at E9.   Waste generated on site is disposed of at landfill sites constructed to dispose of putrescible and inert waste. Toxic waste such as waste oil is transported off site and disposed at approved facilities. Human waste is processed through a waste water treatment facility which generates Class C water into an irrigation field.  The accommodation village, separated by a lights dump for noise reduction from the processing plant, accommodates up to 400 workers and provides facilities such as a mess room, pub, swimming pool and medical clinic.  An airstrip is also located on M04/372.  Personnel are employed on a fly in / out basis.

Over the 2013 reporting year, KDC internally reported 163 environmental incidents.  No fines or prosecution for non-compliance were received by KDC during the reporting period.  Zero non-compliances to M04/372 tenement conditions were reported during 2013.  Zero non-compliances relating to DEC license conditions were reported during the 2013 year.  Following a site inspection by DMP and DEC in September 2012, a letter containing minor non-compliances was issued to KDC by the DEC in November 2012. Corrective actions were completed to close out these non-compliances. To date no feedback has been received from the DMP.  

Up until 31 December 2013, 1,375.29 hectares of land has been cleared on M04/372, of this 150.28 ha of rehabilitation has occurred. During the reporting period progressive earthworks were completed on approximately 12.53 ha on the mine lease.

Progressive rehabilitation is managed by the KDC environment and mining departments.  In the previous reporting year, there was a focus on progressive rehabilitation earthworks aiming to further reduce Ellendale’s closure cost liability.  During 2013 progressive rehabilitation earthworks continued, but there was an increased focus on long term planning for closure, with activities undertaken including progressive rehabilitation, rehabilitation maintenance, rehabilitation trails and investigations and planning for long term closure.  Two new trial areas were established, primarily focused on assessing growth medium and stability issues and trials previously established in 2012 were photographically monitored.  A rehabilitation monitoring plan is currently being developed to capture trial outcomes.  Details are provided in the Rehabilitation and Closure Planning – Research and Trials.  Approximately $1.2 million was spent on progressive rehabilitation earthworks including waste rock movement to cap TSF1B and 1C.  A further $285,000 was spent on progressive rehabilitation and closure planning investigations.

The Ellendale Mine Closure Plan (KDC-MP-407 MCP) was developed in accordance with the Department of Mines and Petroleum (DMP) Guidelines for Preparing Mine Closure Plans released in June 2011, and as such addresses key elements of mine closure at Ellendale.  The plan was submitted on 30 April 2012 and was approved by the DMP on 8 April 2013.  The plan is currently being updated, with the next version due for submission by 31 July 2014.

Environmental achievements are summarised in Table 1 in the attachment: KDC AER_Jan-Dec 2013 Environmental Group Site - Site Summary. 

In the future, KDC is considering the possibility of continued mining at E9 beyond the current pit design.  Studies and investigations of different methods of ore extraction and in-pit tailings disposal are still being considered.  Operation of the E4 mine area is scheduled to recommence during 2014.  Consultation with government regulators and other key stakeholders will occur prior to start up in September.  A key proportion of the future work program will be the focus on extension of mine life by advanced exploration to further define existing resources and identify new resource areas, including a comprehensive sampling programme at E4, reverse circulation drilling at the E9 Far East Pit (FEP) and exploration at E6, which is the largest pipe at Ellendale.

Miscellaneous licence L04/26 covers 164ha over Roberts Road, the access road to the Ellendale mining area.  One Low Impact Notice of Intent has been approved by the State Mining Engineer, entitled “NOI 4842, Ellendale Kimberley Diamond Access Road”. The last annual report was submitted in May 2009.  No further development is scheduled.

Miscellaneous Licence L04/48 is a 231.9ha buffer around the access road easement (Miscellaneous Licence L04/26) that includes the borrow pits and will allow for road maintenance works and access. One Low Impact Notice of Intent has been approved by the State Mining Engineer, entitled “NOI 4842, Ellendale Kimberley Diamond Access Road”.  No changes are predicted for the immediate future and gravel pits remain open for road maintenance.

The leases and licenses mentioned above have annual environmental reporting requirements as do permits and licenses associated with these leases and the operations. The report is submitted pursuant to:

·        Condition 24 of Mining Lease M04/372;

·        Condition 19 of Miscellaneous Lease L04/26;

·        Condition 19 of Miscellaneous Lease L04/48;

·        Condition 1 of Clearing Permit #1378/1 and

·        Conditions 5 (i), (ii), (iii) and (iv) and 6 (a) of Clearing Permit # 3129/1.

This is the thirteenth Annual Environment Report (AER) prepared for the Department of Mines and Petroleum (DMP), and is the first report to be submitted using DMP’s online Environment Assessment and Regulators System 2 (EARS2). 

The report summarises the project operations, environmental management and rehabilitation for the Project for the twelve months from 1 January to the 31 December 2013. Since commencement of the Project in 2002, tenement condition number 24 required KDC submitted an annual report for the previous twelve months. To date the reporting period has encompassed the previous calendar year as suggested by DMP. Due to timing issues preventing submission of reports on time, in 2011 KDC requested that the due date was amended to January and then March each year. This aligns with reporting to other agencies and maximises data and time efficiencies. A request for an extension to the due date (revised date of submission 11 April, 2014) was granted on 18 March 2014.