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

Andy

Whats the difference between trendwatch and tips.com?
I'm not complaining, the more publicity the better but I don't understand why tips.com would post a trendwatch article?

dibbles,

I believe it's an associated company of the T1ps group of companies.

I'm not sure why they do this, maybe so they can milk punters for multiple subscription fees!

Dibbles,

Well, to my surprise, EPD are now back up to 30p!

I want to see the result of the next sale before making a decision.

IN particular, I want to see how many carats go in the sale, because I think they are struggling with the mining due to the wet kimberlite, amongst other things.

Andy,

just read an article on another bb about EPD.

States over 10,000 carats to go to sale next week but won't confirm exact amount until then.
10,000 is less than I had hoped for but the overall write-up is positive......

dibbles,

If that is true, then the production rate is FAR worse than I thought!

They are committed to producing 290,000 carats PA in 2006, which equates to 24,166 per month, and since Spetember last year they only have circa 10,000?

Do you remember the RNS where they said they were holding some production back until the market firmed?

And they STILL only have around 10000 carats?

If this is true, something is wrong here.

The rise was due to a tip from UK ANALYST and their email TIP OF THE DAY. I received this by email on Thursday 16th Feb, see below:-



Buy European Diamonds at 26.75p
Says Rob Cullum of Trendwatch.co.uk
If you don't have much interest in the natural resources sector, we can't really apologise. The hottest sectors on stockmarkets around the world at this time are the natural resource sectors. Commodity prices are booming for two main reasons: supply and demand. Demand is booming, thanks to China, India and many other countries. Supply in the mining sector has been constrained by massive underinvestment in new mines over many years, when commodity prices were low. Only now that we have booming prices is this being rectified - but opening a new mine can take years, so supply is likely to remain constrained for years.

Given those facts, why on earth would you not want your portfolio to be overweight in these sectors?

The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. UK-Analyst.com is owned by t1ps.com Ltd which is authorised and regulated by the FSA and can be contacted at 49 Rivington St, London EC2A 3QB or on 0207 033 9389


We were attracted to European Diamonds for two reasons. First, the share appears to be close to the bottom. Second, its first mine is now producing and set to ramp up production.

In 2003, the company acquired MineGem, a Canadian miner developing a mine project at Liqhobong in Lesotho, Africa's only constitutional monarchy. European Diamonds has a 75% stake; the Lesotho government owns the other 25%.

This is now European Diamonds' principle project. It commenced processing primary kimberlite at its so-called Satellite Pipe towards the end of last year. First diamond sales were held in November last year and the next sale was expected in last month. Production should now build up to 290,000 carats per year for 5 years.

Next to be developed will probably be the adjacent 'Main Pipe', which is a much bigger proposition. An independent pre-feasibility study in 1998 indicated that it had the potential to produce up to 0.7m carats a year over 10 years. Evaluation of the Main Pipe is continuing, as it is with the 8 regional exploration projects in eastern and central Finland, principally at Lahtojoki, Lentiira and "Area 3". Positive sampling results confirm the prospectivity of the Finnish part of the Karelian craton. Earlier this month, the company announced that bulk sampling of the first 500 tons of rock from the Lahtojoki pipe had begun.

What about the outlook for diamond prices? In 2004 De Beers increased prices of rough diamonds three times, one of 3% and two of 5%. The second increase of 5% in August 2004 was seen in the market to have been much closer to 10%. In January last year, De Beers added another 3%-5%, weighted towards larger diamonds of over 2 carats, plus another 3% increase in June this year. Prices have increased in compound terms by nearly 40% since January 2003.

Market analysts reckon that annual demand for rough diamonds worldwide rose from $11.8bn in 2004 to $13bn last year and will rise to $14.5 billion by 2015 (adjusting for inflation). Production over this period will be stable, indicating no oversupply in the medium term.

I actually recommended this share just over a year ago, at 52p. Sadly, I was too early. With the shares now at only half that level, yet diamond production now under way, this surely makes the shares lower risk than a year ago. The downside should be limited, partly because production at Lesotho is now ramping up, and partly because the price chart indicates strong support at 20p. BUY.


Key Data
EPIC: EPD
NMS: 10,000
Spread: 26.5p - 27p

TrendWatch is unique. It is the only publication that gives you complete listings of shares in uptrend and downtrend - vital information for investors and traders alike. Based on this, we make three fully researched share recommendations per fortnight. For a 3-issue free trial, contact us at http://www.trendwatch.co.uk/.

Hope this clears this up for everybody.

Tchno,

Cheers, that has already been posted here, but a reminder for those that are new here.

Nothing new in the article, and only a regurgitation of the companies recent news releases.

The area of concern for me is the production, and IF the 10,000 carat figure is true, they are way behind where they said they were going to be as recently as the end of last year.

I await the sale with interest!

Lesotho diamonds to hit bourse.
Allan Seccombe
posted: Fri, 17 Feb 2006

(miningmx. com) -- More than 10,000 carats of diamonds will be made available in Antwerp in coming days as European Diamonds sells the first major output from its Lesotho mine, CEO Roy Spencer said.

European Diamonds, listed on the Alternative Investment Market (AIM), will market its first major batch of diamonds through BHP Billiton before the end of next week, Spencer told miningmx in an interview.

Production started at the Liqhobong satellite pipe mine in Lesotho's northern mountain range at the end of 2005 and full production should be achieved around April this year.

Spencer declined to say exactly how many carats have already come from the mine.

"We will announce that when we announce the sale, but we estimate it's going to be just over 10,000 carats," he said.

Asked about the quality of diamonds coming from the mine, he said there was a broad spectrum. One stone, an intense yellow 7.7 carat diamond, was expected to fetch $8,000 a carat.

"We will go all the way down to $4 or $5 a carat. The average price we are working with is just over $40. That's for the total run of mine," he said.
The $40/carat estimate is based on a sample of 6,000 carats taken in 2000 for an independent valuation.

Prices six years later are likely to be significantly higher given the drive by diamond giant De Beers to stimulate demand for the gem.

When the satellite pipe mine, which has a grade of 0.68 carats per ton, hits its stride in the next couple of months, it should produce 290,000 carats a year. The life of the operation on the 1.5 hectare kimberlite is five years.

European Diamonds is exploring the main 9.5 hectare kimberlite pipe nearby and should embark on a feasibility study before the end of this year, Spencer said. The study should be completed by next September.

"From the main pipe, we are looking at production of somewhere between 750,000 to a million carats a year," he said.

The new main pipe mine will be open cast and go down 100 metres, but there is a lot more prospectivity that can still be exploited.

"We know it goes down to a kilometre," Spencer said.

European Diamonds is in talks with the Lesotho government, which owns 25% of the Liqhobong project, about other prospects further north.

"We have an application in with the government for a large area in the northern mountains and are waiting for that to be awarded."

European Diamonds is considering a listing in Toronto, Spencer said.

"Toronto gives us access to North American retail buyers which would hopefully broaden our shareholder base away from the UK, which, traditionally, is an institutional based exchange," he said.

He declined to say how much it would cost to develop a second mine in Lesotho.

European Diamonds is also active in Finland, where it has found a "highly prospective" geological terrain. Its key project is at Lahtojoki in central Finland, where a drilling programme has confirmed a kimberlite pipe with grades of 0.44 carats per tonne.
A feasibility study is expected at Lahtojoki later this year.

First European sale today then

All will be revealed.....eeek

"more than 10,000 carats"?

I would certainly hope for a lot more than 10K!

dibbles,

Thanks, I have posted it across the road.

So, if this report is to be believed, my worst fears are realised, production running 9 months late, and around only 10000 carats produced in several months production including the remainder from the last sale!

Hi Andy,

If they have only taken 10,000 carats to market then they are obviously having teething problems to say the least, but I still think at this current sp they haven't any production valued in compared to many explorers who may come up completely empty handed.
At the end of the day they are now producing, which makes them a safer bet than many imo.
If you include the other assets they have and potential for more + regular news from sales and Main Pipe/Finland etc., it could be argued they are a bargain at current levels should sentiment change.

At 30.25p- IC view- Despite all the activity on the ground, the shares are unloved. Good value.

WHEN DO WE GET RESULTS OF DIAMOND SALE AMOUNT AND PRICE ? ANYONE

70020,

Good question!

The sale started last week apparently, so we may hear something this week.

andy
thanks but how long can it take to sell 10k if this is the amount,surely we should know by now

http://moneyam.uk-wire.com/cgi-bin/articles/200603140701067375Z.html

700202,

What as simply appalling RNS (IMO)!

EPD announced commencement of production last MAY! and in November they had a small sale, blaming De Beers "flooding the market" and so "withheld some diamonds from the sale", and now, in MARCH 2006, they sell "aproximately 9000 carats", which I interpret as LESS than 9000 carats!

So even if we put September as the real start of production, this sale represents SIX full months of production, less the small parcel sold in November!

MY guess is they will now do another placing, as this revenue is not sufficient IMO.

Really poor RNS EPD!

"major sale"! LOL!
-----------------------------------------------------------------

European Diamonds PLC
14 March 2006

EUROPEAN DIAMONDS PLC

RNS

RESULTS OF EPD'S FIRST SALE IN ANTWERP
PRODUCTION UPDATE

14 March 2006: EPD is pleased to announce the results of its first major
European diamond sale by closed tender in Antwerp. The company has received the
sum of US$435,500 from the sale of approximately 9,000 carats undertaken on the
company's behalf by its marketing agent, BHP Billiton. Prices for the Liqhobong
goods fetched up to US$6,100 per carat for large, special stones. This
production represents a surface ore grade of approximately 0.5 carats per tonne
recovered from 19,100 tonnes of contaminated near surface kimberlite.

Roy Spencer has commented: 'The average price of US$49 per carat for this parcel
is in the mid range of the expected prices for the Liqhobong diamonds, and is
encouraging given the present market conditions.

'We are confident that on an annualised basis, Liqhobong run of mine will
continue to exceed the Feasibility Study value of US$41 per carat and that with
more tonnage throughput, we will see more large stones in excess of 5 carats. It
is however pleasing that in particular the hallmark yellow Satellite Pipe stones
have attracted so much attention and we intend to aggressively develop this
market in the future.

'The information we receive from this and the next sale gives us the opportunity
to fine tune the recovery plant and develop an economic cut-off for the smallest
stones we will recover. Present throughput is at approximately 50% of full
capacity, due in no small measure to the low grade contaminated surface
weathered kimberlite which still remains on the Satellite Pipe. This material
will take about 4 months to completely remove and process before we only have
primary kimberlite to put through the mill. The reduced production was also the
result of a longer plant commissioning phase exacerbated by severe wet weather
conditions and southern Africa-wide fuel shortages.

'Production will increase from current levels as we introduce and test the
correct screens for the economic cut-off, introduce fuel-efficient conveyors to
replace the existing slurry pumps and other measures to produce consistently at
a higher level. These changes will be introduced as we mine through the
weathered surface kimberlite and will be completed by mid-year, at about the
same time as the removal of the surface kimberlite is completed. '

For further information contact:

Kerry Spencer, European Diamonds +44 (0) 7739 827 231
+44 (0) 1727 852 417

Sarah Samworth, First City Financial Public Relations +44 (0) 20 7436 7486
+44 (0) 7977 276 023

Roy Spencer, CEO, European Diamonds: +44 (0) 1727 852 417

James Cable, Finance Director, European Diamonds: +44 (0) 20 7529 7502


This information is provided by RNS
The company news service from the London Stock Exchange

Very disappointing RNS despite the gloss they have tried to put on it.

Dangling the carat
BY MARTIN WALLER

IS THE next speculative bubble on the Alternative Investment Market going to be diamonds? The market is booming, wildly risky companies are queueing up to float and one or two have the potential to be the next Regal Petroleum or White Nile, if my reading of the signs is correct.

Demand is soaring from the emerging middle class in China and India, explorers are looking in more and more dangerous places and investment banks are planning specialist diamond funds.

The statistics are awesome, according to AIM's house magazine. Just one in five of so-called kimberlitic pipes contain diamonds, and only 1 per cent are economic.

The London Stock Exchange, which runs AIM, is days from producing tighter rules governing mining stocks.

Don't say you haven't been warned.