DiamondCorp PLC (LON:DCP) revealed the upside to cutting, polishing and selling its own high quality stones as it updated on progress at the Lace Mine in South Africa, which involved spending US$1mln on underground equipment.
The firm has what’s called a beneficiation joint venture, which took a 22.1 carat diamond and split it into two - a 7.2-carat emerald-cut diamond and a 0.9-carat pear-shaped stone.
They sold for US$261,361 and DiamondCorp’s half share of the profit was US$71,979.
“This is an early indication of the significant additional value which can be created through beneficiating special and exceptional quality diamonds from Lace and gives management insight into how the stones perform when they are cut and polished,” said chief executive Paul Louden.
Separately, the miner said it has addressed breakdown issues that have hampered output by buying in four trucks, two loaders and two single drill rigs. The price of the used vehicles, at US$1mln, is around a quarter of the cost of buying new.
The additions to the fleet will allow DCP push up output from the Lace’s Upper K4 Block to 30,000 tonnes per month.
The company is slated to produce 75,000 carats this year and 125,000 next.
In line with the production targets outlined for 2016 and 2017 by the company, Panmure Gordon analysts reviewed estimates and reduced the target price from 15.7p to 14.5p.
"We believe that should Lace production consistently improve with manufacturing, then the value attributed to the rough prices will be well underpinned," said the broker.
Shares dipped 3% to 7.75p.
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