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DiamondCorp's underground ramp-up on track

DiamondCorp said ramp up to full production from the Upper K4 (UK4) Block is on track to achieve 30,000 tonnes per month by July this year and it is hoping for a new resource statement at its Lace mine in South Africa in the next few weeks.
DiamondCorp's underground ramp-up on track
DCP says the ramp up to full production is on schedule...

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DiamondCorp (LON:DCP) shares rose as it said ramp up to full production from the Upper K4 (UK4) Block is on track to achieve 30,000 tonnes per month by July this year and it is hoping for a new resource statement at its Lace mine in South Africa in the next few weeks.

The 400 tonne per hour conveyor belt was fired up in November and is operating to design capacity, the group said.

Mining has restarted after a two week Christmas shut-down and remains on target to achieve that commercial production rate.

Stones recovered from initial processing are meeting expectations in terms of colour and quality, including three stones larger than 10 carats, the largest of which was a 22.11 carat H coloured stone, the miner added.

This was sold to the firm's beneficiation joint venture for US$5,000 per carat with a view to recovering an 8 carat emerald cut stone after cutting and polishing.

In addition, last week, the firm prepared to export 3,577 carats of diamonds, which were recovered from bulk testing activities in the second half of 2015.

They will be sorted in Antwerp ahead of the commencement of diamond sales in the next few months. To date, 7,449 carats have been produced towards the first sale.

"Diamond market sentiment has started 2016 in a reasonably positive mood as supply management by the major producers appears to have resulted in renewed demand for rough diamonds in certain size categories," the firm added.

Following the news, broker Panmure repeated a 'buy' on the shares and targets a price of 15.7p.
 
It notes that the recovery of  three stones larger than 10 carats from initial processing offered an encouraging indication of future recoveries. 
 
"Total recoveries to date total 7,449cts and we expect the company to commence regular sales in the coming months," said analyst Kieron Hodgson.
 
One negative, it notes, is ongoing delays to the company’s resource statement. 
 
"All work required of DiamondCorp has been completed but publication is reliant on third parties, outside of managements control," noted the analyst.
 
SP Angel added that the firm appeared to be on track with mining operations but notes that although the company detects a positive sentiment in the rough diamond market it is adopting a cautious stance as to whether this will be sustained.
 
Shares added 6% to stand at 6.625p in early deals.
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