Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

DiamondCorp back on track

By Robert Tyerman

21 February 2015 11:23

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South African gem miner DiamondCorp (DCP) is coming in for favourable analysts’ attention after clinching a four-year pay deal with mineworkers at its restarted Lace mine in Free State Province and reaffirming its plan to start mining the key Upper K4 (UK4) block at Lace from the second half of this year. Headquartered in London and quoted on AIM, the company, whose shares had collapsed from a 90p float price in 2007 to a recent low of 5.38p, has seen them edge forward to 7.75p, for an AIM tag of £22.3 million, amid hopes that UK4, where DiamondCorp says underground core drilling continues ‘to delineate significant volumes of high-grade kimberlite material’, could eventually achieve annual output of 500,000 carats.

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Comments

wildrides

22 February 2015, 04:34

Yikes ………….. 90p down to 5.5 p since 2007 ………… that must have been painful.

spent 2.5 million pounds last year in six months to obtain a years income from diamond sales of £900. On whose planet does that make sense . you have got to be certifiable to invest in this shite . Put your money in the back garden and burn it …………. get the angst over with in one day .
wildrides

22 February 2015, 04:54

meant to type……………… income £900 ,000 ………….. apple ogies
Steve

22 February 2015, 07:14

Wildrides – I wouldn’t apply any significance of the drop from 90p in terms of future SP performance. It was floated right at the top of the boom and the price drop is simply the result of surviving through the downturn and progressing to where it is today in a very different environment for financing than envisaged at IPO. The company says it is now fully financed to production and there is no real reason to doubt this as it has pretty much delivered on its commitments over the last 2 years and has progressed well.

The £2.5million has been spent to open a mine that in H2 this year will start to produce significant quantity of diamonds. The £900k received this year is simply from the processing of some historical tailings that would never have been economic on their own but have become so by using equipment installed for the full mine production – it is effectively just bonus cash.

I was in at 5.5p and then sold at 7p a few months ago as there were better opportunities elsewhere – however it remains fairly high on my watchlist as it seems a decent prospect.