African Diamonds losses decline

Irish-owned AIM-listed diamond explorer and producer African Diamonds recorded an operating loss of £223,000 for the six months ended December 31st 2009.

This represents a 33 per cent decrease in operating losses when compared with the same period a year earlier.

The company also said today that development of its Botswana AK6 diamond mine will commence in September of this year following the completion of a final feasibility study in May.

“The pace of the AK6 development is accelerating. We expect the mine to come on stream in the last quarter of 2011. The final feasibility study will be completed in late May, and site development will start by September 2010. The indications on OPEX, CAPEX and revenue are in line with what has previously been reported," said John Teeling, chairman of African Diamonds,

Mr Teeling said the company was at an advanced stage in completing financing to cover expenditure in 2010 and 2011.

"We are particularly mindful of equity dilution given our low share price. African Diamonds has the right to market its percentage of AK6 output; up to 400,000 carats of good quality diamonds at full production. In a market of growing scarcity, this is a valuable asset and is helping in our funding," he said.

"The average diamond value (+1mm) has improved to a modelled $162/carat, but when in production this is expected to be in the range of $200/carat. More recent studies have looked at detailed modelling of the diamond size frequency distribution. This suggests values in excess of $200/carat once the diamond breakage which was so prevalent in the drill sampling has been modelled out," Mr Teeling added.