Shares in Diamondcorp PLC (LON:DCP) sparkled after the company reported good demand for diamonds extracted from its Lace mine in South Africa.
In all, a Total of 8,646 carats of diamonds were sold in the first quarter of 2016, with the company experiencing good demand for its produce in all size categories.
All lots offered for sale were sold, the company revealed.
The diamond producer said 6,247 carats of those sold were diamonds greater than 1.25 mm in diameter, which were recovered from kimberlite development and production ramp-up. These diamonds are representative of the plant in its current production configuration, and were sold for a Total of US$1.09 million, representing an average of $175 per carat.
“For context, an average value of US$164/ct was forecast for the size frequency distribution achieved with a 1.25mm bottom screen size (excluding ‘special stones’),” noted Yuen Low, an analyst at Shore Capital.
Two special stones – a 22.11 carat diamond (previously reported) and a 1,08 carat Type II purple stone – were sold, at $5,000 and $6,363 per carat, respectively.
“Assuming the US$175/ct figure excludes the two special stones, a slightly higher per-carat price was achieved than expected,” Low opined.
Meanwhile, 2,401 carats were from tailings production and fine diamonds less than 1.25 mm in diameter recovered during bulk testing when the plant was configured with finer bottom screens. These diamonds sold for about $460,000, yielding $19 per carat.
Production from Lace in the first three months of 2016 comprised: 6,324 tonnes of K4 kimberlite at an average recovered grade of 36 carats per hundred tonnes (cpht); 8,327 tonnes of K6 kimberlite from ventilation tunnel development at average recovered grade of eight cpht; and 18,307 tonnes of tailings at an average recovered grade of five cpht. Total diamonds recovered for the period were 3,438 carats.
Blasting of the slot for the first production trough in the Upper K4 Block at Lace, together with a 1,500 tonne underground ore pass and silo, is on track for production to achieve 30,000 tonnes of kimberlite mining per month from July onwards.
'We are extremely pleased with the level of demand shown for the Lace production and the prices we achieved in all size categories. Overall sentiment in the diamond market remains relatively positive compared to the end of 2015, and the price increases seen in January are being maintained,” said Paul Loudon, chief executive officer of Diamondcorp.
Shares in Diamondcorp raced to 8.42p from 7.75p overnight, before ebbing to 8.15p, up 5,2% on the day.