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MSA Group, led by Dr Johannes Ferreira, compiled a size frequency and revenue modelling study to verify the company's in-house estimates – and in general results were better than expected.
They confirmed the pipe’s grade at two carat’s per hundred tonnes. Interestingly, the report, taken from the 300 carats from bulk sampling, suggests that a 100 carat-plus diamond should be found every million tonnes ore mined.
It is expected that 12% of the stone will exceed nine carats, while the diamond values are put at anywhere between US$930 a carat and US$1,025 a carat. The figures comfortably exceeded the in-house number of U$750.
Ferreira is an internationally recognised authority in this sort of analysis, the company said.
He has studied other large diamond size, exceptional value but low grade diamond deposits, including the Mothae kimberlite in Lesotho, Lucara Diamond Corp's Karowe Mine in Botswana and DeBeers' Victor Mine in Canada.
Managing director Stephen Grimmer said: "We are delighted that this independent report confirms the exciting economic potential of our flagship Lemphane projectin Lesotho as we move towards stage-one production.
“The report highlights that our in-house calculations of preliminary diamond values comfortably exceeding US$750 a carat and predicts the recovery of diamonds up to 100 carats in size even in the early stages of production.
“In stage-two, with the anticipated frequent recovery of large stones we would expect that the value would increase further, certainly in the realms of $1,500 a carat envisaged in the published scoping study.
“Lemphane has always shown potential to produce large, exceptional diamonds, and we feel the comparison with other high-value Lesotho kimberlites, made in this study, is fair and offers further upside, given recent remarkable diamond values achieved at neighbouring mines."
The shares were unchanged at 3.65p each. Broker Sanlam told clients: “The MSA study supports management's intention to carry out stage-one mining and means that the 500,000 tonne a year operation should break even or potentially make a small profit (of course the recovery of one very high value stone could result in a significant profit).
“It also gives us confidence that, whilst not without geological risk, $1,500 a carat is achievable and remains a realistic target.”