Monday, January 9, 2012

Paragon Diamonds sampling results show the potential of the Motete Dyke project

Paragon Diamonds today revealed that it has recovered a further 485 diamonds from sampling the Motete Dyke in Lesotho.

Today’s results come from 200 kilograms of material that was sampled. It said that the majority of the diamonds are clean crystal forms and white/transparent. Paragon said that today’s results equate to 2.42 stones per kilogram, with the total weight of 0.3789 carats or 1.89 carats per tonne.

The company received the first two batches of results last week. And it says that results are pending from four further samples, containing a total of 900 kilograms of material.

"This first major sample, showing consistent high quality diamond characteristics, further demonstrates the potential of the Motete Dyke project,” said chairman Luc Huyghebaert.

“It is our intent to vigorously pursue this opportunity through focussed exploration and development work and to fast-track the development of a mine if ongoing results warrant such development."

The samples were taken at regular intervals along the 1.4 kilometre dyke which had already been outlined by surface mapping.

Paragon said it is also undertaking initial grade and volumetric modelling. It expects to announce the results in due course.

Fox-Davies analyst Juan Alvarez describes today’s as ‘encouraging’.

“This sample is significantly larger than any previously reported from the dyke and continues to confirm very similar grades of stones per kg and carats per tonne,” Alvarez said in a note to clients today.

“A further 900 kilogram sample has been acquired by Paragon and is in the process of being analysed. The results of the relationship between the micro and macro diamonds of the dyke facies will be the ultimate predictive tool for the potential for economic grades of the dyke.”

Fox Davies has a ‘buy’ recommendation with a twelve month target price of 34p a share.

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