DiamondCorp PLC (LON:DCP) said its recent auction of stones was a success while operational bottlenecks appear to be close to easing.
The former first. The South Africa-focused company has raked in US$436,597 from diamond sales.
One batch from the tailings achieved US$53 a carat, though the stand-out figure was the US$189 a carat made from rough diamonds taken from the Lace Mine itself.
This represented a record and the number was well in excess of the US$164 a carat in the company’s base case resource statement and financial model relied upon.
The premium price was a reflection both of the increase in screen size and the recovery of a higher than forecast frequency of diamonds greater than four carats in size, the company said.
It remains on target to unearth 75,000 carats by the year-end with work ramping up on the UK4 Block, which is the focus of the underground operation at Lace.
The firm said it will monitor the number of rough diamonds from UK4 before deciding when to send the next batch for auction.
It expects monthly sales to begin at the end of September.
Operationally, things will be improved with the addition of two of three underground dump trucks acquired in April that have now been refurbished.
This last remaining “impediment” to hitting 30,000 tonnes per month run rate is the underground ore silo and tipping “arrangement”. This remains on target for hand over by the end of the month.
DCP reported high breakdown and repair costs associated with the existing fleet as the newly acquired machines have been refurbished.
“As a consequence, operational cashflow remains tight until full production has been achieved,” the group warned.
“The early cash received from the aforementioned diamond sales will assist in this regard.”
Broker Shore Capital noted the average price achieved from the run-of-mine (ROM) kimberlite diamonds sale was higher than previous sales.
Revenues generated from these sales are “proving very handy” as it expects operational cash flow is expected to remain “tight” until full production is achieved, added the broker.
Shares dropped 0.5p to 6.85p.
-- updates for line from broker--