Gem cheer for AIM groups

19/06/2008 Robert Tyerman

Petra Diamonds and Mano River Resources expect first revenues in August from Sierra Leone’s Kono kimberlite diamond project.

Trial mining to the end of last month has yielded 1,049 carats from 12,132 diamonds at Kono, where Petra has 51 per cent and Mano’s majority-owned Stellar Diamonds holds the other 49 per cent. The companies report a grade of 66 carats per hundred tonnes in the project’s Pol-K shaft and 75 carats per hundred tonnes at another shaft, Bardu.

Petra says it plans to hold the first commercial tender for Kono stones in Johannesburg in August, with a second, larger tender scheduled for October. Stellar Diamonds’ chief executive officer, Karl Smithson, says the companies expect ‘significantly to increase the monthly tonnage and diamond production’ and, once the tenders begin, to ‘offset project expenditure from revenues’.

This development should be good news for both participants, as long as world economic setbacks do not depress a hitherto resilient diamond market. At 119p, down from 166.5p 15 months ago, Petra shares value the company at £219 million, while at 11.75p Mano (which recently signed a £28 million agreement with Russian steel giant Severstal to develop Liberia’s Putu Range iron ore deposits) commands a £37.3 million market tag and has scope for improvement.

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