Newly listed start-up BlueRock Diamonds (ISDX:BR) is on the lookout for a project.
It is the company’s first day of trading on ICAP’s ISDX exchange - formerly Plus Markets – following a £279,000 share placing.
BlueRock has just over £500,000 in the bank and it plans to acquire interests in under exploited diamond mines and diamondiferous tailings dumps in South Africa and sub Saharan Africa.
John Meyer, analyst at SP Angel, which brought BlueRock to market, believes there are good opportunities to acquire diamond mining assets at depressed price levels.
“Coloured diamonds should become increasingly valuable as the market continues to develop in China and across Asia,” the analyst said in a note.
“Many larger diamond mines are nearing the end of their natural lives and the closure of mines such as Ellendale in Australia which produces a high proportion of yellow stones is likely to exacerbate this issue.”
BlueRock says it has held preliminary talks with a number of parties over potential opportunities and it intends to make its first deal within 12 months.
The company says that after De Beers sold most of its assets in the Northern Cape and the Free State, South Africa’s diamond mining industry is fragmented.
Small and medium sized miners dominate the industry and it explains that many of them are underfunded and aren’t able to access sufficient capital to grow. As a result these operations aren’t sustainable in the long term, it says.
The initial focus will be on the Kimberley area, which hosts forty known deposits.
It is expected that any future transaction is likely to come in the form of a reverse takeover.