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Stellar Diamonds (LON:STEL) said it is planning a far larger auction of stones than was first anticipated as it updated on progress at its Baoulé kimberlite pipe in Guinea.
In total it will sell 5,900 carats, which consists of 2,200 carats from Baoulé and 3,700 carats of inventory taken from other projects.
Stellar said it decided to opt for a larger auction in Antwerp, centre of the world diamond market, to maximise revenues.
"The planned sale will be scheduled for later in January, when buying activity resumes in Antwerp after the end of year break,” said chief executive Karl Smithson.
In the same announcement investors were told 2,145 carats have been unearthed from the five hectare Baoulé pipe at a grade of 15 carats per hundred tonnes. High quality gems continue to be recovered, including stones of 8.5 and 6.6 carats in size.
The processing plant is running at its planned 50 tonnes of ore per hour optimum rate, meaning monthly production should be in the order of 2,000 carats, assuming the current grade is maintained.
"We are pleased with the on-going progress of the trial mining at Baoulé,” CEO Smithson added.
“The regular occurrence of larger gem quality stones is highly encouraging, as is maintaining our target plant processing capacity and run of mine grade, in order to achieve our objective of processing 2,000 carats per month during 2015.”
The City broker Sanlam has been heartened by progress to date. It pointed out the frequency of large stones suggests the kimberlite is host to a “good percentage of gem quality stones”.
It therefore reckons a price of US$200 a carat is achievable, which stacks up to be US$30 a tonne of ore mined, or double the mining and processing cost.
“Based on Stellar’s 22mln-tonne resource estimate, which is likely to be quite accurate, Baoule represents a good sized and decent margin mining project,” said Sanlam analyst Charlie Long.
At 11.15am, the shares were marking time at 1.2p each.