[miningmx.com] — DIAMONDCORP shares dipped 3% to 13p in trading on the London Stock Exchange on Tuesday despite favourable initial results from the bulk sampling being carried out on the Lace diamond mine in the Free State.
According to CEO Paul Loudon, diamonds recovered from the first 5,515t of kimberlite sampled from what was expected to be the lowest grade sections of the pipe have proven to be of greater-than-expected value.
So far 759 carats of diamonds have been recovered of which the first 561 carats have been valued by the SA Diamond Exchange at an average of $205 per carat which is 71% higher than the company’s base case of $120 a carat.
The value of the diamonds recovered to date is also 28% higher than Diamondcorp’s upper case prediction of $160 per carat.
According to Loudon, “forecast revenue per tonne on the kimberlite extracted to date is $28.21 which represents 98% of the company’s base case of $28.8/t though the parcel valued to date is less than 10% of the diamonds expected to be recovered from the bulk test.
“The dramatic increase in carat value has the potential to lower our forecast breakeven grade from 13 carats per hundred tonnes (cpht) to 8cpht meaning Lace could be a significantly higher cash generator than initially thought.’
Fairfax analyst John Meyer said: “The values attained support our view that the value of stones recovered should be significantly greater than assumed in the company’s projections.
“Grades and values are now expected to run significantly higher than forecast through much of the rest of the 30,000t bulk sample. Additional revenue to be gained from the sale of recovered stones should have a marked impact on the project economics and could lead to a significant gain in the value of the project.’
