Stellar Diamonds (LON:STEL) remains on track to produce maiden resource statements for its kimberlite projects at Droujba in Guinea and Tongo in Sierra Leone this quarter.

Resource drilling has completed at Droujba and bulk sampling is now underway, while both drilling and bulk sampling has finished at Tongo.

The sampling at Tongo’s Dyke 1 revealed 1,150 carats at a final in-situ calculated grade (+1mm) of 121 carats per hundred tonnes and a diamond value of $185/ct on the basis of two aggregated diamond exports made in the report period. 

Stellar added that the results were “highly encouraging,” adding that in-situ value of the Dyke 1 kimberlite is therefore calculated to be $224 per tonne, which is considered to be one of the highest value for kimberlites worldwide.

Chief executive Karl Smithson said that the planned listing of the Koidu diamond mine on the Hong Kong stock market would also raise awareness of its own Kono project in Sierra Leone as it lies adjacent to Kono.

“Excellent progress” had been made on the resource statements over the last six months, he added, with all key milestones achieved not only for the six month period being reported but also for the financial year as a whole.

Stellar generated a loss of US$1.95 million in the six months to December and ended the half-year with US$1 million of cash and US$0.6 million worth of diamonds in stock.

The group added it does not expect rough prices in 2012 to repeat the highs and then lows of 2011, but rather remain more stable. 

“Diamond prices are likely to reflect the balance between short term risk aversion on the demand side and, in the backdrop of limited production increases, the continued strong growth in jewellery demand from Asia that should result in rough diamond price appreciation.”

The South Africa-based diamond miner is hopeful of arranging debt finance for nearly all the cost of developing its Lace diamond mine after talks with possible lenders.

---Adds comments from broker Fox Davies Capital---

Paragon Diamonds (LON:PRG) today revealed that it has recovered a further 485 diamonds from sampling the Motete Dyke in Lesotho.

Today’s results come from 200 kilograms of material that was sampled. It said that the majority of the diamonds are clean crystal forms and white/transparent. Paragon said that today’s results equate to 2.42 stones per kilogram, with the total weight of 0.3789 carats or 1.89 carats per tonne. 

The company received the first two batches of results last week. And it says that results are pending from four further samples, containing a total of 900 kilograms of material.

"This first major sample, showing consistent high quality diamond characteristics, further demonstrates the potential of the Motete Dyke project,” said chairman Luc Huyghebaert.

“It is our intent to vigorously pursue this opportunity through focussed exploration and development work and to fast-track the development of a mine if ongoing results warrant such development."

The samples were taken at regular intervals along the 1.4 kilometre dyke which had already been outlined by surface mapping. 

Paragon said it is also undertaking initial grade and volumetric modelling. It expects to announce the results in due course.

Fox-Davies analyst Juan Alvarez describes today’s as ‘encouraging’.

“This sample is significantly larger than any previously reported from the dyke and continues to confirm very similar grades of stones per kg and carats per tonne,” Alvarez said in a note to clients today.

 “A further 900 kilogram sample has been acquired by Paragon and is in the process of being analysed. The results of the relationship between the micro and macro diamonds of the dyke facies will be the ultimate predictive tool for the potential for economic grades of the dyke.”

Fox Davies has a ‘buy’ recommendation with a twelve month target price of 34p a share.

Paragon Diamonds (LON:PRG) today revealed that it has recovered a further 485 diamonds from sampling the Motete Dyke in Lesotho.

Today’s results come from 200 kilograms of material that was sampled. It said that the majority of the diamonds are clean crystal forms and white/transparent. Paragon said that today’s results equate to 2.42 stones per kilogram, with the total weight of 0.3789 carats or 1.89 carats per tonne. 

The company received the first two batches of results last week. And it says that results are pending from four further samples, containing a total of 900 kilograms of material.

"This first major sample, showing consistent high quality diamond characteristics, further demonstrates the potential of the Motete Dyke project,” said chairman Luc Huyghebaert.

“It is our intent to vigorously pursue this opportunity through focussed exploration and development work and to fast-track the development of a mine if ongoing results warrant such development."

The samples were taken at regular intervals along the 1.4 kilometre dyke which had already been outlined by surface mapping. 

Paragon said it is also undertaking initial grade and volumetric modelling. It expects to announce the results in due course. 

The 4.8 carat blue diamond was sold for $1.45 million, which on a per carat basis was the highest price Petra has ever received. It claims the amount could also be the highest price ever paid per carat for a rough diamond and reflects the exceptional quality of the stone.

“Cullinan is renowned as the world's only reliable source of blue diamonds and this sale demonstrates how rare and desirable they are to the international market,” Petra said.

Blue diamonds are exceptionally rare and Petra may only find one or two per year despite mining millions of tonnes of rock. 

Petra announced the sale alongside a move from the AIM junior market to a full main market listing in London. 

Adonis Pouroulis, Petra’s chairman, said: “We have compiled a world class portfolio of long life assets, which produce some of the world's most spectacular diamonds, as evidenced by the sale of the Cullinan blue for over US$300,000 per carat.”

He added Petra’s aim is to increase annual production to over 5 million carats by 2019 to benefit from the long term supply/demand fundamentals of the rough diamond market.

At 300 million carats, Petra has one of the world's largest diamond resources, while it currently produces 1.1 million carats annually.

The group said a main market listing would give it access to a broader range of investors who want direct exposure to the positive long term fundamentals of the diamond market.

DiamondCorp (LON: DCP) said today its latest drilling at Jwaneng South in Botswana had recovered 23 macro diamonds of mostly clear gem quality.

The group added that the majority of the stones were fragments of larger diamonds most likely broken during the drilling process, though four pink diamonds were present.

The diamonds were recovered from the first five large diameter (455mm) drill (LDD) holes undertaken on kimberlite J-05 at Jwaneng South. 

The concentrates from each sample will be re-processed early in the New Year in order to ensure that no diamonds were missed. 

Once the samples have been re-processed, the data, together with the micro diamond data recovered from earlier exploration, will be submitted for modelling to determine an initial grade estimate, DiamondCorp said.

In the meantime, LDD drilling at kimberlite J-01 is continuing, with samples due to start arriving at Lace for processing in the New Year.

DiamondCorp's managing director Paul Loudon said: "We look forward to receiving final results and the grade modelling from the mini-bulk tests on both J-01 and J-05 in the first quarter of 2012. Only when the final data has been assessed and modelled will we have an indication of the grade potential of these kimberlites."

Jaweng South is about 10 kilometres southeast of De Beers Jwaneng mine – the world’s ‘richest’ diamond mine.

Richland Resources (LON:RLD) has extended its option to acquire an Australian sapphire project until the end of April next year pending its listing on the Dar es Salaam stock exchange.

Chief executive Bernard Olivier said: "By mutual consent both sides have agreed to extend the option Richland has over the potential acquisition of this Australian sapphire project. 

“The extension allows us to complete our Dar es Salaam listing and complete full due diligence within a comfortable timeframe. 

“Following our operational success at our tanzanite mine, which has brought the company back into profit, we are now looking at options to expand our capability into new coloured gemstone resources. 

“Our objective is to secure resources that can be developed into efficient mines, producing high value stones with limited capex expenditure."

 The past 12 months have seen a root and branch transformation of the gemstones group under Olivier.

It culminated in a change of name – Richland was formerly called Tanzanite One – which reflects the company’s shift in focus from being solely a miner and seller of Tanzanite to a broader based coloured stones group. 

For the uninitiated Tanzanite is a blue-purple gemstone found in one small area of Tanzania in the foothills of Mount Kilimanjaro. 

While the company is moving into Australian sapphires and has plans to mine Tsavorite, a green emerald-like stone, its bread and butter remains Tanzanite.

It owns the Merelani mine, the largest in the area among a handful of smallholders, which puts it in the unique position of being the ‘market maker’ for Tanzanite.

The stones are cut at Merelani and packaged into parcels before being sold.

Stellar Diamonds (LON:STEL) said the microdiamond analysis of its Droujba kimberlite pipe in Guinea has yielded “encouraging results”.

A total of 304 kilograms of drill core has produce 279 diamonds, the largest measuring 2.6 millimetres by 2 millimetres by 1.1 millimetres. The majority of the stones are described as white and colourless.

Construction of a dense media separation (DMS) plant is nearing completion, which will allow bulk sampling of the Droujba pipe.

In total 1,000 tonnes of material will be sampled in four separate batches which have already been extracted and stockpiled.

The company said it is on target to produce a maiden resource estimate in the first quarter of next year.

Stellar chief executive Karl Smithson said: “Microdiamond recovery from the Droujba kimberlite core continues to yield encouraging results. 

“This consignment represented selective samples from the hypabyssal and breccia material and the results confirm our view that the hypabyssal kimberlite is significantly diamondiferous. 

“On site construction of the bulk sampling plant is nearing completion with final commissioning expected shortly. 

“We have made excellent progress at Droujba with our success, to date, demonstrating the significant potential of this project. 

“I look forward to updating shareholders as we progress Droujba towards its maiden resource in the first quarter of 2012. 

“This will be a key milestone for Stellar Diamonds as we look to advance Droujba and enhance the value of our diamond portfolio.” 

Botswana Diamonds (LON:BOD) said it is in advanced negotiations to partner with a group that has “new technologies and approaches” to finding diamonds.

“The objective of the joint work is to identify large diamondiferous kimberlite pipes with the potential to become high-volume, high-value long life mines,” said chairman John Teeling.

“The initial focus of this new venture will be in North East Botswana including the Orapa area.”

As the name suggests, the company is focused on Botswana. However it also very exciting projects in Cameroon and Zimbabwe.   

Teeling said the market fundamentals for the stones are strong and support the company’s exploration strategy.  

“Diamond demand is vigorous while supply is at best stable,” he told investors.  

“We are operating in the best areas to find diamonds.  

“We have strengthened an already successful team and we are confident that there are more mines to be found in Botswana where we hope to repeat our earlier success using new technology and new insights.”

His comments were made as the group posted results for the period from the date of incorporation in September last year to June 31 this year. This showed the group made an operating loss of £696,472. The company had cash of £290,577 as at the end of June.

Teeling and his team enjoyed success with African Diamonds.

It was African Diamonds that recognised the potential, developed, and last year sold, the AK6 kimberlite mine in Botswana, which is located close to the massive Orapa diamond mine.

“The Botswana Diamonds' approach to exploration is simple, but rigorous - go where the geology is best, go where there are or were mines and remember that you cannot find a mine in an office,” Teeling said.  

“These rules dictate low overheads and an acceptance of political risk in return for better geological opportunities.”

The company received US$2.8 million for the 47,576 carats on offer in this, its fourth sale of the year. 

Firestone also said the run of mine value of production from its Liqhobong operation in Lesotho and BK11 in Botswana is estimated to be $95 and $180 per carat, respectively.

The diamond market, which is down around 30 per cent from its peak in July, is reported to have stabilsed thanks to growing demand from China and India.

CEO Wilkes said: “We are pleased to have been able to sell all of the diamond production offered at our recent tender, the results of which indicate that some stability has returned to the rough diamond market after the volatility of the past few months.  

“We remain positive about the fundamentals of the diamond market, with long term demand, which is largely driven by growth in India and China, expected to continue to outstrip supply, and expect to see prices for both Liqhobong and BK11 production increase in 2012."

---Adds broker comment and share price detail---

Paragon Diamonds (LON:PRG) has gained access to a new kimberlite discovery near its Lemphane project in Lethotho.

This morning it announced that it was awarded a prospecting licence over a 23 square kilometre area that hosts the Motete kimberlite dyke. The license lets Paragon explore the area for at least two years.

The response among investors was rather muted. On AIM the shares edged slightly lower, dropping 0.5p each to trade at 27.5p a share.

Analysts however had a notably more upbeat response to the news. In a note to clients today City broker Fox Davies repeated a ‘buy’ recommendation on the stock, with a 34p a share price target.

“This is an exciting new discovery for Paragon,” said analyst Juan Alvarez.

“The company geologists who found the dyke discovered evidence of extensive artisanal mining, therefore suggesting that the dyke is diamondiferous, although this has not yet been backed up by systematic sampling.”  

Alvarez added: “The dyke outcrops at surface and along the deeply incised walls of the Motete River, and therefore stripping ratios for any future mining or sampling programme should be minimal. 

“The dyke is also located only 10 km from existing infrastructure and sampling equipment at Lemphane and therefore a small sampling programme on the dyke should be relatively easy to begin.”

Paragon said that an exploration team will be mobilised to the site before the end of this year.

The company said that the kimberlite dyke has been traced continuously over at least 1 kilometre. According to Paragon the kimberlite attains widths in excess of 2 metres, with an average widths exceeding 1 metre. 

Motete is located about 10 kilometres north east of the company's flagship Lemphane kimberlite project, where it is currently carrying out a bulk sampling programme. Additionally it is around 23 kilometres from Gem Diamonds Letseng mine.

Paragon chairman Luc Huyghebaert said: "The conferring of a licence over such a substantial, continuous and accessible kimberlite dyke, with obvious apparent diamond potential presents the company with an opportunity to develop a fast-track diamond production operation, subject to determining an economic grade and value, and a viable resource. 

“As such it is our intention to immediately commence a detailed evaluation of this kimberlite in the coming weeks and months."