European Diamonds Plc (EPD: AIM) is a diamond exploration and development company with advanced projects in Finland and Lesotho.

In Finland, the company has explored a large part of the prospective Karelian Craton and identifed a number of kimberlite indicator trains. Kimberlites have been discovered in one of these areas and exploration continues in the others. Evaluation work on the promising Lahtojoki Pipe has begun with a 5,000 tonne bulk sample due to be collected before Easter 2005.

In Lesotho, European Diamonds holds a 25 year mining license to develop the Liqhobong diamondiferous kimberlites. The Liqhobong Project provides for the commencement of mining at 290,000 carats per annum from the end of 2004 from the Satellite Pipe and the evaluation of the adjacent large Main Pipe and start of a Feasibility Study in 2005.

European Diamonds will become a mid-tier diamond producer in 2005 and intends to grow through acquisition and in-house exploration. The experienced management and technical team of European Diamonds have a strong track record of discovery and a history of wealth creation for shareholders.



The Kingdom of Lesotho gained its independence from the UK in 1966 and is the only constitutional monarchy on the African continent. The country is a small, densely populated mountainous country situated in the east of the Republic of South Africa, which entirely encircles the country.

Diamonds in Lesotho
The country has long been known as a source of large, high quality diamonds, mostly from alluvial deposits. To date most of the country's diamond production has been derived from the Letseng-la-Terai deposit which was mined by De Beers between 1977-1981. Letseng has recently returned into production and is again producing high quality gems albeit on a modest scale. Apart from Letseng, the only other known significantly mineralised kimberlites in the country are the Liqhobong suite and the nearby lower grade Kao pipe all located about 40 kilometres west of Letseng also high in the Maluti mountains.





Finland project.

Project Highlights
Work undertaken by European Diamonds and the Geological Survey of Finland has proven that the Achaean-aged Karelian Craton is highly prospective for hard-rock diamond deposits.
European Diamonds currently have seven regional exploration projects in eastern and central Finland in addition to the Lathojoki project currently under evaluation.
The Company has recovered high quality kimberlite indicator minerals from all of the exploration projects and will continue with the field exploration of these areas in 2005.
Work on the Lentiira Project in central eastern Finland has identified a large kimberlite complex covering an area of some 160 square kilometres. Although the Company has recovered high quality indicator minerals and diamonds from the project area, to date only linear kimberlite dykes have been discovered.
None of the sampled dykes has proved to be the source of the highest quality indicators emanating from the highly prospective 'Railway' indicator train. Further assessment of this project will continue throughout 2005.





Corporate website : http://www.europeandiamondsplc.com/s/Home.asp

Shareholder info : http://www.europeandiamondsplc.com/s/InformationRequest.asp

Don't wait too long dibbles, the re-financing announcement may be soon and it's likely to be a lot better than some have suggested. They have enough to last till November, but they only need enough to keep running for 3 - 4 months. Revenue stream will allow them to get back to normal from January onwards. Remember they will have $millions coming in each month at full production and if the tailings are anything to go by (which we can not assume) then we might get even better prices for any fancy yellows.

If the market reacts positively, which I think they will, then the share price might take off IMO.

Anom hi,
I'm already in, although have to admit to a little trading.
Couldn't resist with last weeks spike.

Andy hi,

I'd be surprised if they dilute for what they need, but who knows.
I think once they announce funds in place you'll have to be quick as we've seen how these can move imo.

dibbles,

Yes you are probably correct, and they may well borrow rather than issue more stock, we shall see.

September 29, 2005: AIM-quoted European Diamonds is pleased to announce positive
sampling results from its Main Kimberlite Pipe in Lesotho, Southern Africa.

Caustic fusion micro-diamond analysis undertaken by Kennecott Canada Inc has
recovered 886 diamonds larger than 150 microns from 691 kg of kimberlite core.
The sampling is the first carried out by European Diamonds on the 9.5-hectare
Main Pipe, located 200 metres from the company's producing Satellite Pipe mine.

The strong results further underscore European Diamonds' progress towards
becoming the world's largest independent producer of diamonds, and the biggest
diamond producer on AIM.

Table 1 below provides the detailed sample results.

Table 1 Square Sieve series diamond distribution

Sieve 0.15mm 0.212mm 0.3mm 0.425mm 0.6mm 0.85mm 1.18mm

No. of Diamonds 482 226 89 54 22 9 4

The largest stone measures 2.1mm on its longest axis and approximately 30% of
the diamonds are descried as transparent and white.

European Diamonds' Chief Executive Roy Spencer said: 'Our expectation is that
the Main Pipe will be the basis of a long-term, major diamond mine that will
push European Diamonds further ahead as the world's largest independent diamond
producer. The company's target for the Main Pipe's diamond production is over
700,000 carats per annum which is additional to the current annual production
rate of 290,000 carats.'

Numis still have EPD as a buy this morning with a 76p price target.

Wel they managed to raise the cash needed at 23p.



From : European Diamonds Plc
Sent : 05 October 2005 08:40:22
To :
Subject : Private Placement Financing


Go to previous message | Go to next message | Delete | Inbox

=======================================================================
Re: Press Releases - Wednesday, October 05, 2005
Private Placement Financing
=======================================================================

The Company announces that it has raised 1,150,000 by way of a private
placement of 5 million new ordinary shares at 23p per share and has
received the subscription monies. In connection with this private
placement, the Company will also issue 2.5 million share subscription
warrants, subject to shareholder approval at an Extraordinary General
Meeting which is to be convened in the near future. These warrants will
be exercisable at 35p per share and will be valid for twelve months.

The funds raised through the private placement will be used for the
Company's working capital.

Following this subscription, the Company has in issue 53,994,783
ordinary shares.

The Company owns diamond interests in Lesotho and Finland. Its
principal project is currently the Liqhobong Satellite Mine in Lesotho
which has recently commenced processing primary kimberlite. First
diamond sales are scheduled for November 2005. The Company is also
sampling at its 9.5 hectare Main Pipe, adjacent to the Satellite Pipe,
and has recently announced positive sampling results.

The Company also has diamond exploration projects in Finland,
principally at Lahtojoki, Lentiira and Area 3. The positive results
from sampling confirm the prospectivity of the Finnish part of the
Karelian craton.



For further information please contact:

Roy Spencer
European Diamonds PLC
22 Grosvenor Square
London, W1K 6LF
Tel: +44 (0) 20 7529 7502
Fax: +44 (0) 20 7491 2244
e-mail: enquiries@europeandiamondsplc.com
website: www.europeandiamondsplc.com

======================================

More dilution as you said Andy, but at least the immediate future is now secured.
Why do they keep going for private placings I wonder, are they looking after buddies?

In any case, dilution aside, with the open funding question laid to rest and the excellent sampling results from Finland, this will surely see the investors come back in droves. Large overhang cleared yesterday.

dibbles,

It makes you wonder!

as you rightly say, the immediate future looks sorted, and they have now secured the funds to take them through to when they will be recieving revenue from diamond sales.

Good news IMO.

I like the warrants - exercisable within 12 months only at 35p - at least that indicates they expect the SP to be north of there by then.

A few bargain hunters in today, I wonder if DKR have finished selling yet?

New report on diamond sampling in K5 section of the Main Pipe in Lesotho. The following is a curious extract:-

"It [the report] is written by Buddy Doyle, who is the principal of Lithosphere Services Inc and Chairman of European Diamonds"

Is this normal? Does it devalue the weight of the report? I do not wish it to, currently I need a lot of good news in my portfolio, but I had to ask.

sd

Here is the release in full - it is very encouraging and should be material for the sp today....

European Diamonds PLC
12 October 2005



European Diamonds plc ('European Diamonds' or 'the Company')

New Analysis Suggests Higher Diamond Grade in Main Pipe



European Diamonds is pleased to announce further promising results from the core
samples taken at its Main Kimberlite Pipe at Liqhobong, Lesotho, Southern
Africa.



Micro-diamond analysis suggests that the size distribution of diamonds within
the sampled part of the Main Pipe is very similar to that in the neighbouring
Satellite Pipe, which is already in production.



European Diamonds' Chief Executive Roy Spencer said: 'The results are
encouraging enough to add momentum to our plans for adding the Main Pipe to our
production schedule at Liqhobong. This would extend the life of the overall
project and significantly lift production rates above the 290,000 carats per
annum currently expected from the Satellite Pipe.'



Mr Spencer added: 'It is our intention to recover a large bulk sample
from the K5 zone as soon as possible to corroborate the new micro-diamond
results - and then to extend the micro-diamond and bulk sampling programme into
the other units of the Main Pipe. We wish to be in feasibility mode on the Main
Pipe early in 2006.'



European Diamonds announced last month that more than 880 diamonds of up to
2.1mm in size were found in a total of 691kg of Main Pipe kimberlite core, taken
from the K5 zone. The new micro-diamond analysis has returned a diamond count of
1,282 micro-diamonds per tonne. Moreover, the size distribution of diamonds is
very similar to that obtained from the Satellite Pipe which has a grade of 0.68
carats per tonne.



The new micro-diamond analysis was completed by the Canadian specialist diamond
consultant Lithosphere Services Inc (LSI).



LSI undertook its review of the new data in the light of work done on the Main
Pipe by its previous owners in the nineties. The review follows accepted
reporting guidelines in Canada and Australia. It is written by Buddy Doyle, who
is the principal of Lithosphere Services Inc and Chairman of European Diamonds,
and who is a Competent Person in both countries.



LSI reports that 'the previous owners took a 13,000 tonne bulk sample
from the K2 zone of the Main Pipe which returned a grade of 0.17 carats per
tonne. The new md (micro-diamond) results are from 3 drill holes that target the
K5 unit. They demonstrate that the K5 unit has 3-4 times the md count and is
therefore most likely of a higher grade than the rock type that was bulk sampled
by the previous owners.



'For comparison, md results from the bulk sample completed by the
previous owners reported only 259 md's per tonne. The K5 kimberlite has returned
1282 md's per tonne. This high diamond count is considered very encouraging.
Moreover, the size distribution of diamonds from the K5 portion of the Main Pipe
is very similar to that obtained from the Satellite Pipe which has a grade of
0.68 carats per tonne.'

At least it sounds like they want to speed up bringing the Main Pipe into production.
700,000 carats a year extra should improve anyones portfolio.

dibbles,

I agree!, this is excellent news IMO.


Stockdog,

I don't think it devalues the credibility of the report at all, I would imagine they are preserving capital by conducting it in-house, (so to speak) but that's just my opinion.

I don't think Mr. Doyle would risk his reputation, nor that of his company, personally, do you?

Why would anyone do a X-trade for 6000 shares?

Well this is superb news. To find out that part of Main is 3 to 4 times higher in grade than the area that was originally sampled puts a whole new perspective on the value of Main pipe.

What we need to do now is work out the size of this area, to see how it affects the overall value of the pipe. In the meanwhile, as they said, EPD will start looking at each of the other areas and sampling them. A rough model can then be constructed for each individual area and the value of the area extrapolated.

For the moment, it does suggest that one fifth of the pipe is a similar grade to Satellite. 3 to 4 times the original 17 cpht grade is 51 to 68 cpht. If we take that further and remember that we don't have dimensions and the other area grades (which could be similar and assuming an equal area size) we can work out a rough valuation for Main pipe, similar to the spreadsheet above:



It should be remembered that:

a) we don't as yet know if the grades are uniform throughout the area
b) we don't have the true grades for the other areas
c) we don't know the size of each area (but are assuming that they are equal)

So the calculations are extremely rough and no reliance can be placed upon them as yet. They are demonstrative only, to suggest the possible revisions to the Main pipe valuations.

Extrapolating the data to the DCF, we come out with a revised Main DCF value (including Satellite, but not including Finland) of 1.48

It should be remembered that these figures are very conservative and other DCF figure could be a great deal higher. These figures are my own opinion and no reliance should be placed upon them for investment purposes. They merely show the overall value that can be presently seen in EPD from my point of view.

To which Wendy replied as follows:


wdurham - 12 Oct'05 - 13:23 - 7097 of 7105

No, Anom -

"Well this is superb news. To find out that part of Main is 3 to 4 times higher in grade than the area that was originally sampled puts a whole new perspective on the value of Main pipe."

That is NOT what it says at all.

The UKREG announcement gives an indication that the spot where the 3 cores were taken COULD be higher in grade, as the samples contain significantly more microdiamonds.

This is extremely encouraging, and gives some small evidence for the eventual potential of 25 cpht overall from Main.

But to have produced the figures above on the results from just 3 drill holes, which sampled only 691 kg, and for which no grade has been estimated, is irresponsible in the extreme. Your figures are NOT "rough calculations" - they are utter and complete guesswork.

One could even call them an utter and complete ramp.

>Wdurham

I think you are deliberately under-estimating the importance of this RNS and falsely accusing me of an utter ramp, when I have made it crystal clear that no reliance can be placed on the figures for investment purposes as there are many unknowns that need to be resolved first.

The only true way to determine the grade of the K5 area is with a proper bulk sample. The company plans to do this in early 2006, when the revenue stream is flowing. But you are quite wrong to discount the data and suggest that the eventual potential is 25cpht, because they have not tested the other areas yet.

The original Minegem survey is now in question. Primarily because they missed so many diamonds in the bulk sample of Satellite. The pictures from the recent tailings work proves that the processing was not 100% efficient and maybe seriously underestimating the true grades of both Satellite and Main.



All that the data does suggest is that the K5 area might be considerably richer than previously suggested and validates the multiphasic theories about the pipe.

The previous Minegem bulk sample only revealed 259 micro-diamonds per tonne. The new K5 sample contained 1282 micro-diamonds per tonne. That is 4.94 times more than the old sample. EPD have suggested that the distribution is similar to Satellite. So it stands to reason that part of Main may very well be the same grade as Satellite or at least close to it.

Until they have sampled the other areas and defined them, we can not determine the overall grade for Main. We can only suggest how the valuations might be altered by a change in the value of one area only.

Even your figure of 25 cpht might be termed a ramp, because by using the lower figure of 3 times the carats in K5, the grade would be 23.16 cpht. Only if you consider the figure at 3.5 times the grade would it be 24.86 cpht.

As we have seen, the md analysis indicates nearly 5 times the number of diamonds. But you can not equate 5 times the md with 5 times the grade of carats. You and I know that very well.

The point is that all the figures for Main have so far been based on the grade of 16.2 cpht. If the figures were closer to Satellite at 69 cpht, that's 4.3 times the value originally proposed.

Nobody is suggesting that the grade is uniform. So it would be wrong to claim such. However, it is possible to extrapolate a 'rough' valuation based on one area being the same as Satellite and that is what I have done. I have made it perfectly clear that these figures are my own and should not be taken as fact. So I don't see any problem

What I do suggest is that your review of the RNS and my subsequent post is 'clouded' by your bad judgement on another share. You've found out that the company was not as good an investment as your thought it was and are now seeking to poke holes in my theories to try and accuse me of bad judgement.

Just because NML have been effectively neutered by the Angolan Government for trespassing, doesn't necessarily mean that you can have a go at the EPD RNS or my interpretation of it.

I've been prudent with my figures and only suggested an increase of 3 times the value, the lower figure, for the K5 area. Your 25 cpht grade suggest that you've given it 3.5 times the grade. Far more than me.
so who's the ramper then? - because it appears to be you