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DiamondCorp's (LON:DCP) first half marked its transformation to a producer from an explorer, it said, posting results for the six months.
Underground mine development was kicked off at its Lace mine in South Africa in the first quarter and remains on schedule and within budget for production beginning in the first half of 2015.
In January, the firm also struck a loan deal with Tiffany for £3.94mln.
After June 30, the company drew down the first £1.9mln tranche of its £14mln project finance facility.
Also, post-period end, the re-treatment of over 3mln tonnes of tailings on site began again. The preparation of the marketing and sale of the first 5,000 carats of tailings diamonds is now underway.
Broker Northland picks up on this, forecasting that around 300,000 tonnes of tailings will be treated in full year 2013 with DiamondCorp recovering around 15,000 carats (cts).
"Next year, we expect the company to treat around 600,000t of tailings recovering 30,000cts," says analyst Dr Ryan Long.
"... we look forward to the sale of the first parcel of diamonds from the tailing at Lace as it will provide an important bellwether for the value of the stones in the tailings."
At Lace, the broker believes there is only a limited risk of dilution to existing shareholders as the project is moved to production.
Production from 2013 to 2015 is expected to result in the recovery and sale of around 300,000cts, estimated to be worth around US$42mln (£27mln) before the mine begins ROM (run-of-mine) production in late 2015.
"This is almost double DiamondCorp’s current market cap," notes Northland.
The broker rates the stock a 'buy' with a target price of 12.5p.
Earlier, Paul Loudon, chief executive, told investors: "The mine is expected to produce up to 500,000 carats of diamonds per annum for over 25 years commencing in the first half of 2015, and heralds the transition of DiamondCorp from explorer to diamond producer.
"The period also marks the commencement of a long-term association with Tiffany which allows the prestigious jewellery retailer access to a new supply of diamonds that meets its quality standards and allows for increased traceability from source to end-user."
For the six months to June 30, DiamondCorp posted a net loss of £2.19mln (2012: loss of £1.56mln).
DiamondCorp shares were unchanged at 5.50p.