DiamondCorp (LON:DCP) remains upbeat on the longer term outlook for diamond prices, despite the soft start to 2015.
The South Africa-based miner is currently undertaking bulk sampling at it Lace mine, ahead of a ramp-up to full commercial production.
Euan Worthington, chairman, said: "This is a very exciting year for DiamondCorp as underground development progresses at the Lace Mine to extract high grade kimberlite from the UK4 Block in the coming months.
"We are all waiting in eager anticipation to see the diamonds which we believe will generate positive cashflow, and enable repayments for us all once the mine is in full commercial production."
Prices for rough diamonds were flat in 2014, with an average fall of around 7% in the final quarter as reduced bank lending to the cutting and polishing sector hit demand.
There has been a modest revival in the last few months, DiamondCorp said and a more positive mood, though it is now modelling Lace at a price US$150 per carat compared to US$160 previously. At the current rand-dollar exchange rate, this represents cash operating margins of 81% on the UK4 Block and 71% on the deposit overall.
“However, we remain extremely optimistic for the future as global wealth growth supports demand at a time when global diamond production is forecast to peak.”
Diamond sales in 2014 totalled 21,700 carats recovered from tailings at an average price of US$63 per carat, slightly ahead of budget and generating revenues of US$1.36mln. Losses for the year were £3.25mln.
Cash at the year-end was £2.5mln, since when it has signed a royalty deal with Acrux Resources, a South African resources financing group, for US$7mln (£4.5mln).