Shares in Diamondcorp Plc (LON:DCP) moved up by more than 20% in early trading in London after the company said that it would now not be selling its major asset, the Lace diamond mine in South Africa.
The company has run into some difficulty over the past couple of months as delays in ramping up production at Lace stretched working capital to the limit.
However, a £700,000 cash injection from the Rasmala Group, the company’s major shareholder, combined with some shuffling around of board positions, appears now to have brought some stability.
Diamondcorp said that such offers that it had had for Lace “significantly undervalued” the asset which, it says still contains diamonds worth in excess of US$1.5bn, notwithstanding the start-up delays.
The company also noted that recent mining activities have been progressing well, as ground conditions and recoveries improve.