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,

No, lol!

Sadly all mining comopanies seem to miss their targets, and EPD seem to bee no exception.

From a shareholder point of view, it is disappointing because the date is set by the company itself, and clearly they don't allow for possible problems, and then the market takes a negative view.

Griffin Mining (I don't hold) are a rare exception here IMO, as it would seem, they are opening on time and on budget.

Andy -

Well, some support buying today, could this be in anticipation? I also emailed the company last week and they replied, speaking only of 'second quarter' for minestart, so that suggests they are hedging their bets.

phil,

Well that would appear to be the case!

Still holding, but not as happy as I was.

Andy

remember a while ago we thought EPD would beat NML to production - well this month they've both lost their way a little.

Who will be first back on track do you reckon?

SD

Nice couple of sizeable (for today's overall volume) buys at the end of trading today. It will be interesting to see if the offer is still there at 40 tomorrow.

Hope it's EPD, sold NML today to pay for more SEO's

Stockdog,

Interesting question!

I still think EPD, but not as confident as I was previously!

I originally planned to top slice EPD profits into NML, but that may not be possible to do now, although NML's price is low enough to be bale to make a decent profit IF they finally deliver.

Well yesterday's gain has been lost again this morning, come on EPD, where's the RNS?

Andy, we may both be stop lossing out of NML into EPD's rise! lol

I'm not good at arriving at a balanced view in these dreary market days, so feel unsettled much of the time which I dislike.

However NML has remained firm at 3.75 bid and EPD has found support at 25p. If they don't go lower then one day they will rise. Do you think there is much downside risk left in them?

SD

Stockdog,

Well 'IF' EPD fail to deliver a minestart RNS by the end of May, we could see a dip towards 30p IMHO, although this is a worst case scenario, which I hope doesn't happen, obviously.

With regard to NML, it looks low at 3.75p BID, but 'IF' they were to do a placement at, say, 3p, then the price would drift down towards the placement price IMO. Again a worst case scenario IMHO, and they may borrow money rather then do a placing, in which case I see a very limited downside from the current price personally.

In fact today you can buy NML at UNDER 4p, despite the offer being 4.25, so it looks as though the MM's may have some stock to sell there.

Looks like we're headed to 30 in any case, I see no serious interest in buying

Phil,

I can't disagree with that, I've reduced my EPD for now, and increased my FDI and SEY.

Phil,

Well I'll be looking out for na RNS tomorrow, two weeks since the end of April, so now would around the time we can expect to see one of the schedule is still on track IMHO.

Personally, I think they have delayed too long, and do not expect the rise I would have expected two weeks ago. Hopefully I'l be proved wrong, we shall see.

Andy,

You were spot on, here's the announcement:

++++++++++++++++++++++++++++++++++++++++

European Diamonds PLC
16 May 2005


Appointment of leading valuers for diamond marketing
Completion of Liqhobong diamond recovery installation

European Diamonds ('The Company') has appointed two of the world's leading
diamond valuation and advisory consultancies to set up trial marketing systems
for the diamond production from its new Satellite Pipe mine at Liqhobong in
Lesotho, southern Africa.

Subject to approval by the Lesotho Ministry of Mines, the company has
commissioned two firms, WWW International Diamond Consultants and
Johannesburg-based Fancy Colour Diamond Cutters Ltd Pty, to establish a
long-term marketing system for diamonds from Liqhobong, where initial output is
expected to be in excess of 290,000 carats per year.

Although the start of initial production at the Satellite Pipe has been delayed
by bad weather and the late delivery of equipment, construction work for the
diamond recovery section is now complete. Initial commercial production is to
commence once final testing is completed over the next few weeks.

European Diamonds' Chairman Tony Williams said: 'We are, of course, disappointed
by the delays to full production from Liqhobong. However we are not losing sight
of the fact that we expect to be producing a range of high-quality stones, some
of which are fancy colour in a global market where demand will continue to
outstrip supply for at least the lifetime of Liqhobong. This new marketing move
represents another key step towards establishing us as the world's largest
mid-tier diamond producer.'

Rough diamond prices have risen by over 30% since 2000, and global demand is
expected to rise from over US$11 billion in 2004 to approximately US$14 billion
by 2012.

While independent valuations in 2000 put a mine stone value of US$40 per carat
on diamonds from Liqhobong, where European Diamonds is working in partnership
with the Government of Lesotho and the Industrial Development Corporation of
South Africa, subsequent discoveries of larger stones may push this figure
considerably higher. Stones of up to 30 carats have been found historically by
local workers, and European Diamonds has discovered a 3.5 carat 'fancy yellow'
stone.

+++++++++++++++++++++++++++++++++++++++

But with the EGM in ten days time, what chance of short term upside?

Phil,

Thanks, and yes, quite disappointing really, more delays, and the SP is already down a tad.

I don't know why these AIM mining juniors set themselves such tight timelines, and then when they can't achieve, it looks like delivery failure.

It really does look as though we won't have confirmation of production commencement until the end of June now.

Here we go!

Now down 3p (8.22%) as probably traders head for the exit, and the MM's are never slow to spot an opportuntiy!

It looks to me more like a buying opportunity - the news is not bad, merely a delayof a few weeks, and it appears someone is ready to jump in very quickly when the SP drops. We may even get lucky and have some good news timed to coincide with the EGM....???

Numis has a buy rating and 71p price target for EPD says Citywire

Canary9 -

Yes that's from some time ago. At the moment we're mired in this EGM next week, coupled with delays to mine start, both of which seem to me to be short term problems

Phil,

Yes EPD have bounced as you predicted, and Numis have issued a buy note, which someone has posted on ADVFN, and I have pasted it below, although I cannot verify if this is the Numis note, I have no reason to doubt it either.

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


numis update this morning.

EUROPEAN DIAMONDS* 36.5p BUY, target 71p - Process plant installed at
Liqhobong and valuers appointed

European Diamonds is preparing its operations for production of diamonds at
the Satellite diamond mine at Liqhobong in Lesotho in Southern Africa. We expect
to see first production in the next few weeks followed by a valuation of the per
carat value of the diamond production over the next few months.

We are forecasting around 100,000cts of diamond production this year and
near 300,000cts per year for the five years thereafter from the Satellite
diamond pipe.

The plant has been delayed in its construction by bad weather in the
mountains of Lesotho and by the re-design of some larger equipment which may
raise production levels once the second diamond 'Main' pipe is started next to
the Satellite is started.

We anticipate increased news flow over the next few weeks and months.
hil,