Petra Diamonds (LON:PDL) shares eased over 3% on Monday despite it reporting record production for the first quarter.
Output for the three months was up 2% to 833,744 carats compared to 816,735 carats in the comparable period, which was the highest quarterly figure in the company's history.
However, the firm noted that the diamond market was in its customary lull after the summer - typically the quietest time for rough diamond sales.
It added it expects the market to firm up towards Christmas.
"Demand from the major US consumer market and emerging markets, such as China and India, remains firm and the longer term outlook for the diamond market remains favourable, underpinned by constrained supply from mining production," it also told investors.
Broker Westhouse repeated a 'buy' stance and targets a price of 230p.
Analyst Rob Broke said the firm is well on track to achieve its target of 3.2mln carats for the full year 2015.
"....we believe the stock has been oversold on recent weakness and we expect this to improve in Q2 and beyond as the market firms up."
The analyst added: "Petra remains our preferred mining play, combining a strong growth profile with solid operational performance and the potential for a maiden dividend in FY2015."
Petra shares eased 2.40% to 171p