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

These guys are the masters of spin IMO!
================================


European Diamonds PLC
26 October 2006


Liqhobong Diamond Mine Production Update

The management of EPD is pleased to provide the following technical update on
the mining and technical operations at Liqhobong.

Satellite Mine

Over the past year, an open pit mining operation has been successfully
established on this small, high grade kimberlite and a modern recovery plant
constructed to recover diamonds from this pipe.

The operation achieved 'Commencement of Commercial Production' (CCP)
as defined in the official mining licence documentation, in late July. This
requires the Satellite diamond recovery plant to have the demonstrated ability
to continuously process at two-thirds of the rated capacity of 60 tonnes per
hour over a period of 1 month. A number of delays relating to tailings disposal
and plant design issues have had the effect of delaying the achievement of full
production. In effect however, the plant is still undergoing commissioning with
various adjustments currently being made to the circuit.

For the 10 months to the end of September, the plant processed 67,577 tonnes of
kimberlite from the Satellite open pit for a total diamond recovery of 40,899
carats. It is important to note that grade at the mill, and therefore total
diamond recovery, is controlled by the current 1.35mm lower cut-off compared to
the 1.0mm cut-off noted in the Feasibility Study. Depending on the lower cut-off
decided on over the next year, at full production the plant should produce
between 650 and 850 carats per day.

Small diamonds are often not worth recovering, however the analysis of
information from the first sales in Antwerp now indicates that the -7 sieve
Satellite diamonds are fetching prices which imply that these small stones are
economic to recover. This conclusion has only been made possible with the
availability of the Antwerp sales data.

Three opportunities to enhance recoveries have been identified in the Satellite
plant circuit. These are; 1) existing slurry pumps should be replaced by more
reliable conveyors, 2) the existing tertiary crushing circuit needs to be
upgraded to allow for better fine crushing and 3) a second specialist DMS fines
cyclone needs to be introduced into the system to recover small diamonds.

Plans to improve both recovery and throughput are well advanced although, as for
many mining operations worldwide, lead times for new plant and equipment are
very long indeed.

A new conveyor system has been installed and is being commissioned at the
moment.

The Company, with the engineering firm Metso Minerals (South Africa) Ltd, has
acquired a suitable tertiary crusher. Metso has indicated that the new crusher
will be available for transport to site by the end of November.

The additional fines cyclone system, to address the recovery of small diamonds,
is expected on site at the end of November.

The Company has been assured by the contractors that all of the planned
equipment upgrades will be completed and on site by the end of November and
in-house commissioning is thus anticipated to be achieved by the end of the
year.

Main Pipe Evaluation

To date we have processed approximately 25,000 tonnes of bulk samples from the
Main Pipe through the Satellite facility. Processing the Main Pipe samples
through the Satellite plant has saved the Company considerable expense in that
this system closely simulates diamond recoveries expected during production and
thus avoids the expense of a purchasing a separate testing unit for this work.
It is anticipated that up to an additional 10,000 tonnes of bulk sample will be
collected from the pipe during the course of 2006 and into 2007.

The production team will also continue to blend small quantities of the softer
Main Pipe kimberlite through the same plant for additional metallurgical testing
purposes preparatory to the Feasibility Study contemplated for next year.
Strategic blending will continue until all plant upgrades are completed. Because
of the lower grade of the Main Pipe kimberlite, this procedure has however
impacted somewhat on the total carats produced over this period.

A further 2000 metres of core drilling is underway to further develop the 3-d
geological model.

The Scoping/Pre-Feasibility Study is well underway with results due to be
available for independent review early in 2007.

EPD's CEO Roy Spencer commented 'Difficulties in simultaneously
processing both the weathered near surface clay rich kimberlite and the deeper
and harder fresh material required us to design, procure and install various
additions to the diamond recovery system. Despite severe winter snowfall and
long lead times for delivery of mining and processing equipment being
experienced worldwide, we are making good progress towards full production.

We are also looking at ways of further increasing revenue by recovering more of
the small stone sizes which our marketing analysis indicates are now economic.
We have continued to recover diamonds during the extended commissioning phase
and our Main Pipe results are very encouraging.

We expect to announce the results of a recent tender of diamonds in Antwerp as
soon as the final sales receipts have been received.

All in all, despite our operational difficulties in 2006 we have prepared the
ground for a long life, large and profitable diamond mine from a standing start
eighteen months ago.'

Mr Roy Spencer, GSSA Member, FAusIMM, and Chief Executive Officer of European
Diamonds plc is a 'qualified person' as defined under the AIM rules and a
competent person under the JORC reporting standards. This announcement has been prepared under Mr. Spencer's supervision and all reporting is to JORC standards.

For further information contact:
Kerry Spencer, European Diamonds
+44 (0) 1727 852 417

Allan Piper, First City Public Relations
+44 (0) 207 631 2737

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

Really is time to get your feet wet again Andy! Encouraging third sale results today, plant upgrades soon to be in place, full production within 2-3 months from Satellite, Main valuations good....

Well EPD finally had another sale!

On the face of it the receipts of $2 million were quite stunning, but the 27 carat diamond discovered earlier this year, along with other large stones held back by EPD, were included, distorting the value of the sale.

However, what cannot be disputed is the total of $4.5 million sales achieved over the course of 2006.

The cynic in me questions the timing of this release, and once again there is a woolly statement of the sort that I really dislike in ANY company RNS.


-------------------------------------

European Diamonds PLC
27 December 2006




EUROPEAN DIAMONDS PLC



Results of Fourth Diamond Sale in Antwerp







The management of European Diamonds Plc is very pleased to announce that the
fourth sale of Liqhobong mine production, from the Company's Lesotho-based
subsidiary Liqhobong Mining Development Company (Pty) Ltd's open pit mining
operation, has been successfully concluded in Antwerp. A total of 13,567 carats
of run of mine goods were offered for tender by the Company's sales agents. No
bids were entered for 1,959 carats and the remaining 11,608 carats were sold for
U$2.17 million.



The Company's CEO, Roy Spencer has commented that 'The price for this parcel is
significantly higher than that achieved in previous sales, due in no small
measure to the extraordinarily high price of U$27,008 per carat achieved for a
27.7 carat clean D-colour stone, recovered from the Main Pipe, which was
included in this sale, together with several other smaller high quality stones
of between 11 carats and 23 carats. We believe this may be the highest price
paid on a per carat basis from Lesotho in recent times. If the 3 largest, high
quality stones, are removed from the equation, the remaining parcel fetched U$72
per carat.



Importantly, there are also indications that the 27 carat stone is a Type IIa
diamond fragment of a much larger diamond which, taken together suggests that
larger, similarly high quality stones, may be present in the Main Pipe.



The effect that these stones will have on the overall value of the Main Pipe
diamonds is still being assessed but will certainly increase the value from the
U$60 per carat achieved in the last sale. Similarly, the effect of these high
quality stones is being considered in the context of the Pre-Feasibility Study
we are currently working on and which will be completed in early 2007.

The 1,959 carats not sold were smaller low value stones and a decision on the
on-going marketing of this type of diamond will be made in due course.

This sale brings to a total of U$4.3 million, the gross proceeds from diamond
sales by the Company in the last 12 months.'

EPD MM's all moving up this morning and all blue on L2 ...about time we get some good news
Di

up 6% in last hour..MM's still marking up... I bought some more at 18.67 for some reason Barclays stockbrokers doesn't always show up...edit...now another 0.5p...come on EPD already in profit from this mornings trade
Di

somethings up...another 0.25p up now...maybe they have found a huge vane of diamonds!!

from the other side
'another fair statement from River / Bond.
http://www.mining-journal.com/Breaking_News.aspx?breaking_news_article_id=2291

"....There is currently a diamond rush in Lesotho occasioned by the phenomenal values being achieved for some of the large diamonds recovered in Lesotho mines," River Diamonds said...."

from the other side;
Institutional roadshow was set for this week so not suprised by the move up. Should be worth a couple of days of rises and then hopefully followed up by the feasability study update to move it to the next level.
Management apparently feel this will be around 46p by mid summer give or take a few pence when the full impact of their work is realised...So anyway a 1 bagger now seems finally on the cards went long again a few weeks back all be it I could have got in slightly cheaper...

Dynamite, that's "vein".

I'd boast about my spelling skills but I wouldn't want to appear vain.

Arf...of course it is...I put it down to my broken leg..it must have reduced my spelling skills :-)

On second thoughts that is implying my brain is in my leg :-( so maybe not

I wonder what's up? High volume yesterday and today.
1) current production line up to speed
2) pre-feasibility study contains some nice large numbers
3) takeover offer
4) large diamond find
5) roadshow spreading the word and persuading buyers
6) more diamonds in Finland

Any guesses? Most of those are easily possible.


As to brains and legs, I know that fleas have their brain in their legs. It goes like this: you train them to jump when you shout "jump". Then you chop off their legs. Then you shout "jump" and nothing happens, obviously because they no longer understand the word "jump", which is what happens if the brain is removed. Alternative theories are that the ears are in the legs so they can't hear any more.

Do you think this share price will jump if I shout loud enough?

European Diamonds PLC
17 May 2007




EUROPEAN DIAMONDS PLC
(The 'Company')

Updated Resource Statement

LESOTHO UPDATE



Diamond Resource of Main Pipe Extended to 130 metres


US$591 million in-situ value excluding large stone potential


Satellite Plant now operating at full capacity


17th May 2007: European Diamonds Plc ('EPD' or the 'Company') and its 75% owned
subsidiary Liqhobong Mining Development Company (LMDC) is pleased to announce an
updated resource statement for the Main Pipe Kimberlite at the Company's
flagship diamond project at Liqhobong in the Kingdom of Lesotho with an update
on the Satellite Plant.

Main Pipe
The updated resource statement has again been carried out by specialist
independent diamond geological and mining consultancy Geocontracts Botswana
(Pty) Limited ('Geocontracts'). Dr. Leon RM Daniels Ph.D, MAIG, who has over 30
years of experience in diamond exploration, mining and recovery, prepared the
resource statement. The statement was prepared according to the Definitions and
Guidelines for the CIM Standards on Mineral Resources and Reserves of the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM Standards) and is
based on data collected during 2006.

The Main Pipe resource was calculated to 130 metres from surface and is made up
of 2 sections. Firstly, a revised Indicated Diamond Resource (IDR) to 45 metres
from surface, which now contains approximately 13.99 million tonnes of
kimberlite with a recovered grade of 0.282 carats per tonne (cpt) and a stone
value of US$70 per carat (pct) (Press Release dated 27/03/07). Secondly, the
updated resource statement extends the diamond resource from 45 to 130 metres as
an Inferred Diamond Resource (IFR) containing approximately 16.37 million tonnes
of kimberlite with a slightly reduced (due to dilution) recovered grade of 0.275
cpt also with a stone value of US$70 pct.

The calculated resource is thus estimated, at this stage, to contain a total of
30.4 million tonnes of kimberlite and 8.44 million carats of diamonds, which
represents an in-situ diamond value of US$591 million to 130 metres from
surface. Additional information relating to production costs will be established
by the Pre Feasibility Study.

It should be noted that none of the stone valuations in the resource statement
include the three large, high quality stones between 15 and 27.7 carats produced
from the Main Pipe in December 2006 and which sold for up to US$27,000 per carat
(press releases dated 27 December 2006 and 15 March 2007).

The IDR and IFR were referenced on over 7,600 metres of drilling, approximately
30,000 tonnes of bulk sampling (which recovered 9,014 carats), some 5.1 tonnes
of microdiamond analyses and 5 separate independent stone valuations on a total
of 6,990 carats of run of mine diamonds recovered from the Main Pipe during
2006.

Satellite Diamond Plant
The Satellite Diamond Plant is now capable of production at its rated capacity
of 400,000 tonnes per annum. Full production from the Satellite open pit will
continue to be subject to the processing of lower grade Main Pipe material in
addition to the higher grade Satellite ore, as is operationally appropriate and
as the Main Pipe bulk sampling programme requires.

Roy Spencer, the Company's CEO commented today that 'Geocontracts also notes
that the Main Pipe has been drilled down to 650 metres from surface and is still
open at this depth. We know that the pipe at 150 metres from surface has an area
of approximately 7.6 hectares (ha) and at 300 metres from surface approximately
5 ha, thus the Directors of EPD believe it is reasonable to assume that there is
some additional potential below the 130 metre level that will be addressed over
the coming months. Further supporting this assumption, the Scoping Study
prepared for MineGem Inc. by Fluor Daniels Southern Africa in 1997 (Press
Release 9th August, 2004), suggested that an open pit operation based on the
Main Pipe could go as deep as 350 metres from the surface.

It should also be noted that this resource estimate statement does not include
the K6 zone which makes up approximately 5% of the volume of the kimberlite to
this depth and for which there is at present no grade data'.


For summary of reserves see:

http://www.investegate.co.uk/Article.aspx?id=200705170700217081W

Where is the company heading

News


Click HERE

or read here :-) Thanks Share Trader
European Diamonds upgrades Main Pipe resource estimate
Thursday, May 17, 2007, 07:46 AM
European Diamonds (AIM: EPD) announced an upgraded resource estimate for its Main Pipe Kimberlite in Lesotho. The indicated and inferred resource, which is now calculated to a depth of 130 metres from 45 metres, now stands at 30.4 million tonnes of kimberlite with 8.44 million carats of diamonds with an in situ value of US$591 million. The indicated diamond resource, which represents the first 45 meters contain approximately 13.99 million tonnes grading 0.282 carats per tonne and a stone value of US$70 per carat. The inferred resources, calculated from 45 meters to 130 metres contain 16.37 million tonnes grading 0.275 carats per tonne with a stone value of US$70/carat. European Diamonds added that the grade and value of diamonds recovered did not include three large stones recovered in December 2006; therefore it is likely the actual average value of stones recovered could increase if large stones are distributed throughout the pipe.

Meanwhile at European Diamonds operating mine, the Satellite pipe, the Company stated that the operation is now capable of running a full capacity of 400,000 tonnes per annum. European Diamonds intend to maintain current production at Satellite while using spare capacity to process additional bulk samples from the Main Pipe.

"Geocontracts also notes that the Main Pipe has been drilled down to 650 metres from surface and is still open at this depth. We know that the pipe at 150 metres from surface has an area of approximately 7.6 hectares (ha) and at 300 metres from surface approximately 5 ha, thus the Directors of EPD believe it is reasonable to assume that there is some additional potential below the 130 metre level that will be addressed over the coming months." added Roy Spencer, Europeand Diamonds CEO. "It should also be noted that this resource estimate statement does not include the K6 zone which makes up approximately 5% of the volume of the kimberlite to this depth and for which there is at present no grade data".

European Diamonds PLC
18 July 2007



EUROPEAN DIAMONDS PLC


Board and Senior Management Changes and Proposed Corporate
Re-organisation
Pre-Feasibility study identifies potential for over US$1 billion of
recoverable diamonds in Lesotho



18th July 2007: European Diamonds Plc ('EPD' or the 'Company') announces changes
to the Board of Directors and senior management of the Company and a proposed
comprehensive corporate re-organisation in conjunction with the release of
positive pre-feasibility study results at the Company's Main Pipe diamond
project in Lesotho.


Board and Senior Management Changes and Proposed Corporate Re-organisation:

Board and Senior Management Changes

Effective immediately:

Timothy Philip Read (aged 60) joins the Board of the Company as
Executive Chairman. Mr Read has over 35 years' experience in mining and the
mining finance sectors, and was Chief Executive Officer of Adastra Minerals
Inc. until August 2006, when the company was acquired by First Quantum
Minerals Limited. Prior to joining Adastra in 1999, he was co-head of mining
investment banking at Merrill Lynch.


Mr Read will provide strategic leadership to the Company and assume
responsibility for communications with the financial community.


Stephen Lay (aged 52) joins the Board of the Company as Chief Operating
Officer. Mr Lay is a mining engineer with over 30 years of worldwide mining
and project management experience. In addition he has a strong background in
management and executive roles in a number of public listed companies. Mr
Lay will have responsibility for overall technical and operational
leadership of the Company and in particular will coordinate the Definitive
Feasibility Study ('DFS') for the Main Pipe which the Company proposes to
initiate immediately.


Roy Spencer steps down as Chief Executive Officer of the Company and
becomes a non-executive director. Mr Spencer will continue to advise the
Company on all its exploration activities in Lesotho and will also be
responsible for all exploration activities in respect of the Finnish mineral
properties which the Company is proposing to spin off to shareholders by way
of a corporate re-organisation (described below).


Murdoch Beaton steps down as a director of the Company but will continue
to act in an advisory capacity on all of the Company's activities in
Southern Africa and will remain as a director of the Company's Lesotho
subsidiaries.


Buddy Doyle steps down as Chairman but remains as a non-executive
director.


See Appendix 2 for further details in relation to Tim Read and Stephen Lay.


Corporate Re-organisation

The Company's Board is proposing a corporate re-organisation in relation to the
Company's Finnish mineral properties and a change of name of the Company.


In relation to the Company's mineral properties in Finland, it is proposed that
the common shares of the sub-holding company that holds these assets will be
distributed to the Company's shareholders to form a new public company, to be
known as North European Diamonds Limited (the 'NED Spin Off'). The NED Spin Off
will be subject, inter alia, to a court approved re-structuring to make the
proposed dividend of the common shares of NED to the Company's shareholders tax
neutral.


The Board will also be proposing a change of name of the Company to one that
more properly reflects the ongoing focus of the Company in developing
substantial diamond production in Lesotho.


The proposed NED Spin Off and change of name will both be subject to
shareholders' approval. Full details will be circulated to shareholders in due
course.


Main Pipe Pre-Feasibility Study

The Company has completed its Main Pipe Pre-Feasibility Study ('PFS') which has
generated the following technical and financial elements:

Kimberlite resources modelled 55.5 million tonnes *
Proposed kimberlite processing rate 3.5 million tonnes per annum
Initial mine life 16 years
Provisional cost estimates:

Capital US$100 million

Operating US$11 / tonne

Indicated grade 27 carats / hundred tonnes
Approximate recoverable carats 15 million carats
Indicated run of mine value US$70 / carat
Provisional value of recoverable

diamonds US$1.05 billion

*Refer to Appendix 1 for further details.


The PFS has been reviewed and audited throughout its development by ACA Howe
International Limited ('Howe'), who has commented as follows:


'Howe has determined that the PFS has been carried out to a high standard and
uses conservative design, operating and revenue parameters. Current studies and
modelling show a 16 year open pit mine life. This is based on a resource model
extending down to the 2,250 metre elevation (approximately 280 metres below
surface), where the kimberlite has a modelled cross-sectional area of 5.1
hectares (8.56 hectares at surface). However, limited drilling has shown that
the pipe extends to at least 650 metres below surface.'


'Operating and financial parameters should be especially favourable in the first
four years when minimal pre-stripping is required and the stripping ratio
averages 0.25 (tonnes waste to tonnes ore) rising to a favourable overall mine
life average of 1.1.'


'Howe notes that the average grade of 27.38 carats per hundred tonnes ('cpht')
and the average diamond price of US$70 per carat used in the PFS financial
modelling has been derived from a parcel of 6,088 carats extracted from the Main
Pipe. Howe considers that there may be significant revenue upside above this
level because these numbers deliberately excluded several large or bonanza
stones, including a 27.7 carat clean D flawless stone recovered from the Main
Pipe bulk sampling in December 2006 that realised a price of US$27,000 per
carat.'


'Howe notes that an independent review and assessment of the macro-diamond size
distribution of the Main Pipe based on the recent bulk sampling results by MM
Oosterveld, has indicated that an average 200,000 tonnes of kimberlite would
yield 4 stones larger than 50 carats and 1 stone larger than 100 carats.'


'Howe has recommended a programme of diamond core and large diameter drilling
for further definition of the Main Pipe and to add greater confidence to the
resource base. Howe has also identified a number of aspects of both mining and
processing procedures which should be addressed in the DFS and may further
optimise the project.'


'Howe concludes that the PFS shows the project to be financially and technically
robust and recommends that the Company should proceed with the DFS.'


Roy Spencer, Director, commented:

'We believe the Board and senior management changes and proposed corporate
re-organisation will accelerate market recognition of the considerable value we
have already developed for shareholders. The PFS is comprehensive with all key
areas independently verified by experienced consultants. The PFS clearly
demonstrates the potential economic viability of the Main Pipe even with the
conservative parameters used. Since the end of 2006 for example, we have
processed another 14,000 tonnes of Main Pipe kimberlite at a recovered grade of
over 0.4 carats per tonne and, as noted by Howe, we have strong evidence to
support the project's large stone potential. This information, together with
further bulk sampling and financial data, will be incorporated into a DFS which
will start as soon as possible. In the meantime we continue to produce diamonds
from the Satellite Pipe which is now processing kimberlite at its design rate of
420,000 tonnes per annum. We are now also fully funded to completion of the
DFS.'


'I would like to thank all our directors, employees and shareholders who have
supported us to date. I welcome our new management additions and look forward to
helping develop our Company further over the coming years.'


Tim Read commented:

'I am delighted to be joining the Company at this very exciting time. It should
be noted that the delineation of the Main Pipe has been a considerable technical
success and that this, in conjunction with the PFS, has demonstrated the
project's potentially robust economics. We will now be embarking upon the DFS
and making initial approaches to various sources of project finance, in order to
bring this outstanding project to full value.'


About EPD:


European Diamonds Plc is listed on the AIM Market ('AIM') of the London Stock
Exchange and its shares trade under the symbol EPD.


Mr Roy Spencer, GSSA Member, FAusIMM, and a Director of European Diamonds Plc is
a 'qualified person' as defined under the AIM rules and a competent person under
the JORC reporting standards. This announcement has been prepared under Mr
Spencer's supervision and all reporting is to JORC and similar standards.


For further information contact:


European Diamonds PLC Canaccord Adams Limited

Tim Read/James Cable Robert Finlay/Mike Jones/Ryan Gaffney

+44 (0)20 7529 7502 +44 (0)20 7050 6500


Roy Spencer/Kerry Wells
+44 (0)1727 852 417
First City Public Relations
Allan Piper
+44 (0)20 7242 2666
E-mail:
ir@europeandiamondsplc.com
Website:
www.europeandiamondsplc.com

Coimment, click here

http://www.proactiveinvestors.co.uk/articles/art.php?EPD4

Last March, with the price at 16.5p mid, we thought that European Diamonds could well be on the cusp of a turnaround. The successful PFS and the excellent prospects going forward show that we were right.


Last Friday, European Diamonds called an EGM to change the company name to Kopane Diamond Developments plc. Kopane they explain - is a Sesotho word meaning "Unity". As the first corporate step towards the total repositioning of the company in the market, this comes as a clear clarion call that EPD's management remain determined to change public and market - perception of their company.

It was back in July when this move was first mooted, along with a significant reorganisation of the top echelon of management. Chairman Buddy Doyle reduced himself to the ranks of non-executive director, whilst Roy Spencer resigned as Chief Exec and also became a non-exec, though he did retain responsibility for the Finland operations. Newcomer Tim Read took the top job as Executive Chairman, and a new Chief Operating Officer was introduced in Stephen Lay. Read has years of experience of the mining industry, having served as CEO at Adastra from 1999 to 2006, after some years as co-head of mining investment at Merrill Lynch. Lay's 30 years of experience as a mining engineer and senior executive will stand him in good stead as he takes on the task of progressing the Main Pipe to full feasibility and production.




At the same time, they also announced that two key corporate actions were under active consideration the spinning off of the Finnish assets into a new company to be known as Northern European Diamonds, and a change in the name of the company to more accurately reflect the Lesotho focus. The spin off, it was clear, would take some time, as court approval would be required to reorganise the capital structure of the Finnish holding company, but the good news was that the shares in the new NED would be distributed to EPD shareholders by way of a dividend.

Still more good news included in that 18th July announcement was the upgrading of the Main Pipe resource and the completion of the Preliminary Feasibility Study, under the supervision of ACA Howe, for which shareholders had long been waiting.

To quote the company's own words on that day: The Company has completed its Main Pipe Pre-Feasibility Study ("PFS") which has generated the following technical and financial elements:
* Kimberlite resources modelled 55.5 million tonnes
* Proposed kimberlite processing rate 3.5 million tonnes per annum
* Initial mine life 16 years
* Provisional cost estimates: Capital US$100 million; Operating US$11 / tonne
* Indicated grade 27 carats / hundred tonnes
* Approximate recoverable carats 15 million carats
* Indicated run of mine value US$70 / carat
* Provisional value of recoverable diamonds US$1.05 billion

It's also worth noting two key comments from Howe, as follows: Howe considers that there may be significant revenue upside above this level because these numbers deliberately excluded several large or bonanza stones, including a 27.7 carat clean D flawless stone recovered from the Main Pipe bulk sampling in December 2006 that realised a price of US$27,000 per carat."

"Howe notes that an independent review and assessment of the macro-diamond size distribution of the Main Pipe based on the recent bulk sampling results by MM Oosterveld, has indicated that an average 200,000 tonnes of kimberlite would yield 4 stones larger than 50 carats and 1 stone larger than 100 carats."

So plenty of potential upside on the $70 per carat level, assessed and vouched for by a specialist organisation whose qualifications to make such an assessement are beyond doubt.



A resource statement issued just two months before, on 17 May, had valued the Main Pipe at a significantly lower level than this, based on available drilling/sampling results at the time. The May assessment prepared by expert diamond consultant Dr Leon Daniels - had covered a mix of indicated and inferred resources down to the 130m level of the pipe, coming up with 30.4 million tonnes at just under 28 cpht, equating to 8.44 million carats and thus valuing the resource at $591 million. This assessment had enabled a successful fund-raising during May and June at 20p, to put another 5.2 million in the bank.

So the July announcement was very good news all around. A new Chairman with some clout, a new COO who was a real mining engineer and not a geologist, a dividend for the shareholders in the fullness of time, and a value for Main Pipe almost 80% higher than just two months earlier.

Which makes it quite inexplicable that the share price, which had been in a gently rising trend from its earlier all time low in November 2006 almost immediately began to fall! Having reached 25p on the day of the announcement, the very next day saw a drop of over a penny, and apart from a couple of stabs at resistance, it has barely stopped since.

Today it stands at just 16.75p, when the company is probably in better shape than it has ever been, with a firm future, strengthened management and a completed PFS that leaves one in absolutely no doubt that the Main Pipe will be Lesotho's next diamond mine. Add to that the fact that the Satellite processing plant is now fully up to speed and churning out diamonds from both Satellite ore and Main samples, and the share price action seems even more strange.

To add to the upside, sales news released just two weeks ago showed that this summer's auctions in Antwerp have realised another $3.4 million in revenue, bringing the total so far to well over $9 million. Overall, run of mine stones are fetching almost $60 per carat average showing the influence of the lower grade Main Pipe samples on the total plant output. The price did try to rise when this news hit the market, but to no avail. It seems that investors really have fallen out of love with European Diamonds.

It has to be said that in the past the company has - justifiably - acquired a reputation for being a serial non-deliverer whilst raising funds from the market on a depressingly regular basis on decreasingly favourable terms.

But for the last twelve months, operations at the Liqhobong diamond project in Lesotho have progressed steadily, and the plant which serves the producing 69 cpht Satellite Pipe is now at full output, handling both ore from Satellite and bulk samples from the Main Pipe. Main Pipe is under continuing development to arrive at the final full feasibility study and commence production in 2009.

Last March, with the price at 16.5p mid, we thought that European Diamonds could well be on the cusp, and that the problems of the past were over and done with and the company could begin the task of turnaround. Their work of this last Spring and Summer, the successful PFS and the excellent prospects going forward show that we were right. Sadly, the market doesn't agree with us.

But with luck and a following wind not to mention shareholder unity at the upcoming EGM Kopane Diamond Developments might get a different reception.

Di
You still in these? Sold out at 50% loss in Jan 06. Not regretted since. However, maybe this time they could be on their way. Will watch and wait for some seriouos price/volume action, breaking back up through 20p.
sd