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

Stockdog,

Well it's a total slaughter out there this morning, and EPD, IMHO, has faired better then most!

I only have one stock blue, Mano River, and only have a small holding in that anyway.

It's certainly bleak out there today. Too bleak to buy IMHO - want to see this sell off hit bottom firmly before committing more funds.

EPD could certainly have fared worse, but I have other penny stocks stocks that have not moved at all today. Hoping this is a sign of strength to come, rather than just too small to bother people who will sell these off too once they have dealt with the bigger fish.

Having posted lyrically about being a born again stop-losser on the ARX (funnily enough the one bit of blue on my screen today) thread yesterday, in practice I am sitting like the proverbial rabbit in the headlights again, hoping the wheels will go either side of me.

SD

Shouldnt this stock be going NORTH instead of SOUTH. I Know its murder out there today.

When can we expect to see a movement back up?

Stockdog,

Well I have been selectively selling since Friday (not EPD), as I suspected we were due a fall today, and I agree, before I commit those funds back into the market I want to see a solid base too.

I have a nasty feeling the US market is going to have a quick correction, and drag UK down too.

On my non oil stocks, I have placed stop losses, and am selling as soon as they are breached. I have made several sales today, and I can buy them all back CURRENTLY at cheaper prices.

I relaise there is a risk of missing a quick rise, but I have lowered my risk, and am happy to sit out today, to see how Wall St. CLOSES!

Sceniroute,

The quick answer is yes, but with the market being so soft, until EPD actually announce official minestart, which could be any day now, I think we will wallow around this price.

Any opinions from anyone about todays news?

Well, the issue price of the units for 45p suggests some support for the SP at around that price (above today's 41.5p mid-price), since the warrants for half a share at 75p are well out of the money and are therefore just a kicker at this stage. But investors must think 75p will be cheap enough by the time they swap their warrants into shares within quite a limited time-frame of 1 year.

"Each whole warrant will entitle its holder to
acquire one ordinary share of the Company for a period of one year following the
closing date at an exercise price of 75 pence per share."

Is the closing date the date of closing of this issue or some date specified in the issue documents?

Also, a little surprised to see reference to an EGM to be convened "shortly", but a listing date of 25th April for the new shares. Don't they know when the EGM will be yet - today, Friday or Monday - and what happened to 21 days notice of a GM?

The private placing in Bermuda has overtones of dodgy funds - was it so much better than raising in London? Is EPD listged on a Bermudan stock exchange?

Basically very good news for the operational side of the company and no discount to the SP, but a couple of tiny alarm bells about the corporate administration - or am I being too sensitive?

SD

I agree Stockdog, some questions need answers, but at least so far the SP is not collapsing again. Looking again at today's release, I note that the 4.25m shares have already been subscribed, and it is these that they hope to start trading 25th April. The remaining 6.86m shares are the ones for which they are calling an AGM to seek approval.

Stockdog,

I think you are confusing two issues.

I think they already have shareholder permission to issue the 4.25 million shares, hence so they will commence trading on 25/04/2005.

In order to obtain shareholder approval for the additional shares and warrants, they will need to call an EGM, and give, as you rightly say, 21 days notice.

Once the EGM approves the additional shares / warrants, they will be issued, but not before.

Bermuda is a taxhaven, so not necessarily "dodgy", possibly simply tax avoidance.

Andy, as I said, good news on balance and I'm prepared to be called over-sensitive about the other issues. Not making a big issue out of it. Still holding.

BTW Comdirect marked the offer up to 45 (from 43 close) after hours - usually a sign the MMs are protecting themselves from cheap buyers expected in the pre-market tomorrow, I think. So maybe we touched bottom at 41.5p mid-price yesterday and today before climbing back up through the dma's to the wide blue yonder - only another 70 days till end of Q2 by when they say they will commence production.

stockdog,

That's interesting, re Comdirect, will watch the open tomorrow closely.

May be worth attending the EGM if in London that day, all formality, and over quickly, but you have the opportunity to have a chat with the directors afterwards, so could prove fruitful.

I believe production is due to start by the end of April/beginning of May, so hopefully that will prove to be accurate.

Stockdog,

Well spotted sir!

Following on from your Comdirect comment yesterday, up goes the price today!
maybe a few traders coming in now that minestart MAY be imminent?

Another possibility is the placing at 45p has put a support under the price, and we're simply rising to that level.

Anyway, a nice finish to a poor week overall.

It's a good day generally for me, Andy

Topped up on some holdings first thing today. Gratified to see I am clear of the offer price already on two of them already.

If only NML would get out of bed, I'd be feeling totally chipper!

SD

Stockdog,

I'm now considering a topping up my EPD again on Monday morning, maybe the march northwrds has started now?

Stockdog,

The post below was posted on ADVFN by Anomolous, and he relates a recent conversation with kerry at EPD, and is well worth a read IMHO.

Anomolous has given permission to rperoduce his post here.

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


Anomalous - 23 Apr'05 - 10:40 - 4356 of 4369

I spoke with Kerry yesterday evening. She gave me an insight into what happened with the issue. She couldn't tell me beforehand, because that would have been against the rules and I appreciated that she didn't.

They had been arranging the placing for a while and wanted to get it over and done with so they didn't miss out on any of the precious working time in Finland. You see, in Finland, there are a few months where they are completely unable to do any work at all. So they have to cram as much in as they can during the Summer and Autumn months.

They've already started clearing the ground at the Kimberlite in late January, but they need the warmer months to make the drilling easier. These are approaching fast. If EPD didn't have the money to get the work completed immediately, they might have had to wait another season to get the BFS done and delayed bringing the mine into production by as much as a year.

So they took the decision to go ahead with the fund raising (just for Lahtojoki, none of the cash goes to Lesotho), so that they could make the most of the time they have available. This much cash means that the work can proceed from the bulk sample to the BFS seamlessly. They are rushing the bulk sample through the labs (in Perth, Western Australia) and will send back the preliminary results to enable the BFS drilling to start in the right place. They haven't firmed up the true dimensions of the Kimberlite yet, but it is estimated to be 2 Hectares and the initial grade from the samples taken so far is 44 cpht. This might change (up or down) during the bulk sample. But the key thing is that they will have a better idea of the carat price too.

Now, they were in the final negotiations over the deal for the placing when someone (shall we say possibly sgfund) stuck his great big foot in it and went round saying that there was going to be a dilution. The original strike price for the deal was 55p per share.

Yes that's right, they would have raised 5 million at 55p, not the eventual 45p. So you can all kick sgfund for causing the issue to be 2 million shares higher, which represents an extra 5% dilution.

The rumours caused the price to drop during the negotiations and the placee came back to EPD and asked for a lower price. They settled on 45p, just before the price dropped even more to 40p because of Wall Street.

The main point about the placing, is that the company now has the funds to get Lahtojoki closer to production. If they can get the BFS completed this year, then they might be able to consider bringing Finland into production in 2006, rather than 2007. This would mean that EPD would have three pipes in production simulataneously. Satellite, Main and Lahtojoki. So we may have to revise our estimates for the share price considerably. As having three pipes in production is bound to increase the company value.

We won't have more details on Lahtojoki until much later in the year. In fact, we shouldn't really expected anything before September or October for the bulk sample. But Kerry is forward thinking vice-president and she realises the value of having shareholder and investor support. So it is intended to keep everyone updated with much more regular reporting, similar to the reports that Tawana get. On a regular schedule. They won't go silent for months, but will honestly keep you appraised on their progress, by saying that they are 1 or 2 days behind schedule but that mining is underway.

EPD told us that they would start mining by the end of the month and they are still on track. Fully funded and ready to go. I expect we will hear something very soon to tell us if they have made the mine start. The plan for Lesotho over the next three months is to work up to full production by August 2005. So in May, June and July, they will increase the amount they are processing, till they are at the maxmimum load they can handle.

They have a pile of tailings (that does have diamonds in) ready to be put through. So they know this will test the ability of the equipment to sort and extract the diamonds. The pile should keep them more than occupied whilst the other engineers start extracting fresh kimberlite directly from Satellite.

They are conscious of the fact that Lesotho does have a preponderence of large high carat stones. So they are going to do their best to process the ore without breaking up these stones beforehand. It has a lot to do with the settings for how they screen the ore as it goes into the production line.

They are using wet and dry methods to process the ore. The water supply is ready and so are the staff and the equipment. In fact, they might be just finishing off the last bits of preparation as I write.

So.. we have Kerry's regular reports to look forward to, we have a fully funded mine about to start production, we have a fully funded exploration underway in Finland and we have two low-risk countries to work with.

I believe that we are about to become very wealthy shareholders. Bring it on.......

Things seem to be looking up here, and if the above post is true, then mine-start is just around the corner!!!

finland is looking ok to, so overall i still expect a healthy rise here soon!!!

Andy,
If you where short of funds would you sell some FDI to buy EPD?

or even some NML - lol!

Aldwick,

Possibly on a short term basis, as it SEEMS more likely we will hear about minestart at EPD before any news from FDI, but in all honesty, that is a guess, and FDI could bring out some company making news tomorrow, for all I know.

I would bertainly bear in mind that it's nearly three months since FDI confirmed they had found three kimberlites in Botswana, and they were drilling one hole per one and a half days, so I would have thought they must have some more news coming up from Botswana, and then of course we are waiting news from the Groen River.


For example only;

Let's just say I had 2,000 in EPD, and 10,000 in FDI, I might consider selling, say, 4k FDI, and even both holdings up at 6k, thus hedging my bets.

'IF' EPD announced minestart, and the price rises, say, 20%, you could then sell 4k of EPD, and use the proceeds to re- buy 4k FDI, thus regaining your original holding, and making 800 of EPD shares. (excluding dealing costs)

If you do this within 30 days, your FDI holding will be deemd to be continous for the purposes of BATR.(I believe)

Of course, FDI may also rise, and you could lose out that way, so it's one to ponder beforemaking any rash moves.

I have sold holdings in another stock to top up on EPD, but it wasn't FDI!

Hope this helps.