Stellar Diamonds (LON:STEL) said it passed a key milestone as it recovered the first diamonds from Baoulé kimberlite pipe in Guinea.
Having commissioned the trial mining plant on schedule last month, a limited amount of ore has so far been processed.
Even so it has yielded over 50 carats, including stones 3.76 carats and 1.37 carats.
The objective is to mine 100,000 tonnes to establish a diamond grade and a benchmark value for the stones.
Chief executive Karl Smithson said: "I am delighted to be on site to witness the first recovery of diamonds from our Baoulé pipe which is a key milestone for Stellar.
“Our team has done an excellent job to get the project up and running in a short space of time and under challenging conditions during the rainy season.
“Our next objective is to optimise the commissioning of the plant before increasing the volume throughput of kimberlite ore, which could take a few weeks further.
“Whilst this large scale bulk sampling, or trial mining, is expected to establish the diamond grade and value of the kimberlite pipe to a high degree of confidence, it is also expected to provide cash flow to the company over the next twelve months."
In-house modelling of previous drilling over the pipe has identified a target of over 22mln tonnes to a depth of 300m, which, at a grade of 13 carats per hundred tonnes, would yield around 3mln carats.
This increases to 6.5 million carats using an average microdiamond grade of 30 carats per hundred tonnes.
“However, investors should note that this is not an independent resource estimate or in accordance with the JORC Code,” Stellar cautioned.
Sticking with the historic data, the firm said a 509-carat parcel sold in 2000, which did not contain any large stones, was sold for US$157 per carat.
Stellar said there “may be considerable upside” on this diamond price and the same parcel could realistically be expected to achieve prices in excess of US$200 per carat in the current market.
In the same announcement, the company said it had reached the investment milestones that cede it a 75% interest in the licence containing the Baoulé.
Separately, Stellar said it continued to monitor conditions in the area with regard to Ebola. However it pointed out there has not been a case in the vicinity.