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Additional Information

Market:	AIM
Sector:	Diamonds and Gemstones
EPIC:	DCP
Latest Price:	6.75 (3.85% )
52-week High:	16.00
52-week Low:	4.75
Market Cap:	16.35M

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DiamondCorp Full DiamondCorp profile here

DiamondCorp plc is an emerging diamond producer focused on maximising shareholder value through the development of high margin diamond production assets. The company is incorporated in the UK and the highly prospective diamondiferous regions of South Africa and Botswana are its chosen areas of operation.

Fairfax notes ‘exciting potential’ of DiamondCorp’s Botswana exploration

Wednesday, September 08, 2010

Broker Fairfax featured DiamondCorp (LON:DCP) in its ‘Daily Market Report’, saying the Botswana exploration activities have exciting potential for the company, “although it is still very early days”.

The latest drilling results revealed that the J-05 kimberlite at the Lace property in Botswana shows similar characteristics to the diamond bearing volcanic rock at the nearby Jwaneng mine. Samples are now being shipped to Canada for analysis, while drilling will continue on J-05 to confirm the size of the kimberlite.

The broker noted that the Lace asset continues to progress with the decline scheduled to reach the 240m level by the end of the year, ahead of schedule, after which the company can take a 30kt bulk sample to confirm the resource grade and value.

It is of note that the asset has a 1.2mtpa diamond plant that has been operated, and the remaining capital to see this potentially 230,000-420,000carat/year mine will only need a further £4-5m to complete which would cover refitting the historical shaft (intact) and putting in place the necessary development for sub level caving, Fairfax said.

This capital requirement is particularly low, and only £2.85m of debt, at 30 June, is held against the project for repayment over the next 18months.

“We value DiamondCorp at 17p/share based on an NPV of the Lace mine using a 15% discount rate and factoring an equity raise of £6.5m next year at 12p following the results of the bulk sampling.”

The broker concluded: “Previous exploration at the J-01 kimberlite indicated that the pipe was diamondiferous, if J-05 turns out to be diamondiferous then we anticipate that the company will look to undertake bulk sampling at both targets. This will follow capital raisings due to take place next year following the results of bulk sampling at Lace due in Q1 2011 as funds will be required to develop the asset for production.

“We note that management are progressing work at Lace and on the exploration tenements in Botswana as planned or even slightly ahead of timings which adds confidence that the team are well able to deliver.”

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