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DiamondCorp (LON:DCP) confirmed it is on course to bring the underground mine at the Lace project in South Africa on line six months ahead of schedule.
The group outlined plans to accelerate the ramp-up last month (July), which means it will begin processing high grade upper portion of the kimberlite in first half of next year.
The update was given alongside the company’s interim results, which reflected its efforts to bring Lace into production.
Capital expenditure during the period was £4.3mln, while the loss for half-year to June was £2.7mln.
As at the end of the period DCP had £7.3mln of cash on hand.
The Lace plant is currently processing tailings, mainly to optimise it readiness to accept kimberlite.
But the work to date has uncovered diamonds totalling 13,055 carats. This equates to 5.78 carats per hundred tonnes – which is ahead of forecasts of around 5 carats.
Sales brought in around almost £550,000.
Chief executive Paul Loudon said: “The period under review saw us move closer to our goal of commencing long-life underground kimberlite mining at the Lace mine.
“Our constant attention to mining and development costs, and emphasis on diamonds recovered rather than tonnes throughput, positions us well to generate outstanding returns for our shareholders when mining commences from the UK4 Block in the first half of 2015.”
Broker SP Angel said it is looking forward to the results of first diamond production from fresh kimberlite from the underground mine early next year.
“It will be good to see the mine grade confirmed following the abandonment of the bulk test in the upper levels of underground mine two years ago,” the mining specialist said.
“The recovery of a 15.2ct stone is great news, is well timed and should add meaningful cash to the business at this sensitive time,” it added.
“DiamondCorp need all to go well from here as the cost of mine development will deplete cash reserves ahead of the first parcel of sales from the main underground workings. The underground mine is to be developed using a block caving method for bulk mining. This should work according to the geotechnical studies though it is normally undertaken by larger companies,” the broker concluded.
Shares in DiamondCorp were down 0.07p at 7.05p in late morning trading.