In the media

Diamondcorp to test diamond market this year

13 May 2013


Diamondcorp (LON:DCP) is keen to avoid being a one-mine company but has ruled out operating in the Democratic Republic of Congo or Angola at this time.

The company revealed in its annual results for 2012 that it is on the look-out for new opportunities in the diamond sector.

The company noted that demand for luxury goods such as diamonds has been dampened by uncertain world markets, but that diamond prices appear to have stabilised in the opening months of 2013, and might even be recovering in the US.

The company intends re-commissioning the Lace plant before the middle of 2013 with kimberlite tailings and will then test the market in the second half of the year with sales of the diamonds it recovers.

Depending on the prices achieved, the company will assess if it is worth increasing tailings production ahead of kimberlite being mined from underground in 2014.

Like most early stage mining companies, Diamondcorp is loss making, but losses reduced markedly in 2012 to £3.53mln from £4.24mln the year before.

Cash at the end of 2012 stood at £4.32mln.

In a note to clients City broker Northland Capital said that equity dilution is now only a ‘minor risk’ to investors as a result of a recent debt funding. And analyst Dr Ryan Long believes the stock is due an upgrade.

“With funding now secured and development commenced we now consider the project to have been significantly de-risked and will be reviewing our forecasts and price target with an upgrade expected,” he said.

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