RE: bluerock5 Aug 2018 10:13
What people have to understand is that this company is in the fledgling stage. The pipes being mined are only now starting to hit the sweet spot kimberlite. The ore mined at K2 has only recently been free from some overburden which was always going to yield less than optimum results. As the pipe is mined below 20 meters I feel that a more consistent stones will be found. I also feel that more 10ct+ stones will come to light. Remember some have already been found in the poorer quality kimberlite. Bonanza stones cannot be ruled out and with a M/cap of £2M this would have an immediate and substantial change to this valuation as the market would feel that where there is one there bust be more.
This company has also got quality of diamonds on its side with proven quality to put it in the top 10 for $ per CT.
K1, with more thought by previous management, should have been mined first as it has better number of diamonds per ht. This would have meant a quicker move to profitability. However that said they seem to have learnt from K2 in so much as they have removed much of the overburden without trying to recover stones from this poor quality ore. I expect the kimberlite at K1 to be the company maker and we should see some exciting results from this pipe over the next year as they get down to the really meaty kimberlite.
The share price has been steadily eroded since 2016 which is normal for an early development miner. However at £2M M/cap this seems a steal as the company start to move more into profit and a consistent diamond production is seen.
This mine with its 3 main pipes has a life term of 10 years minimum but would like to see another acquisition within the next 3 years.
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