World wide diamond prices are rising at the moment from their lows of the past few years. There’s going to be much ado in the coming weeks and months at a little miner that has been raising a few eyebrows in the AIM sections of brokerages in the city.
Diamondcorp Plc look set to significantly rise over the next 3/4 months. They are an emerging diamond producer highly focused on the development of high-margin diamond production assets. The company is incorporated in the UK, and operates in the long established diamondiferous regions of southern Africa. They are an evolving diamond company with assets in Africa, a JV in Botswana which is known to be one of the most prospective countries in the world for new diamond discoveries, DiamondCorp has an exploration joint venture with exploration company Geoperspectives. The project covers PL71 totaling 30km², containing five identified kimberlites. DiamondCorp can earn a 77.5% interest in the project by completing a definitive feasibility study on at least one of the kimberlites by June 2014. And PL71 is located 8 kilometres south-east of De Beers’ Jwaneng Mine, the largest diamond mine in the world by revenue. But what’s about to set this company on fire isn’t Botswana it is the Lace Diamond mine in South Africa a truly superior class asset which is targeting 14 million carats of Diamonds. The company estimate that they will be in full-scale production in approx’ 18 months with a 400,000 carat per year turnover. Bulk sampling has already begun at Lace (30,000 tons of new Kimberlite is being processed for completion in June) as have diamond sales. Diamondcorp recently sold approx 1400 carats of diamonds recovered from Lace tailings (waste). If that isn’t a pointer as to what is actually down there I don’t know what is! They will also be selling at auction a further parcel/lot of diamonds in June of this year. They are on track to be cash generative this year and will certainly be re-rated as news begins to come through. They do have a target of about 17/20p but in all probability once production begins in earnest then this will go out the window especially as the Blog can reveal that a definate re-rating will happen here. A further pointer is the quality of the management team they have vast experience in diamond mining; some having worked at De Beers,Xstrata etc. They are a quality management team with Global contacts in their respective fields.
So why will this sp rise? Well any company about to bring on Diamond production of 400,000 carats per year of turn-over for the next 25 years will rise. It’s as simple as that. 14million carats of diamonds will push the sp. The diamond market is being feed by the Chinese and Asian countries, India etc. Prices per carat are rising and are back to their pre crash levels. Diamondcorp are operating efficently with a proven BOD and are already selling diamonds to the market. They have a small market Cap’ of 25million and their Chairman admits that M+A Activity in the sector is on the increase. It’s a cocktail that should once shaken push this sp. They could easily double (26p) or treble (38p) on good news and it is known by the Blog that “Good news” is in the (Kimberlite) pipeline!
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