Analyst Peter Rose reckons Lesotho-focused Paragon is worth 30 pence a share – three-and-a-half times the current stock price.
His assessment was released after updated bulk sampling results from the group’s Lemphane kimberlite, which revealed the company has unearthed an 8.86-carat dodecahedron diamond, which has significant positive implications for the project.
So far, some 14,000 tonnes of material of a planned 35,000 have been processed, which has yielded over 200 carats with 31 diamonds over one carat.
Managing director of the junior diamond explorer, Stephen Grimmer, told investors: "The largest stone recovered to date helps to confirm our view of Lemphane as a large diamond producer; this single stone represents 5% of the total carats recovered so far.
"Importantly, over one third of all carats to date are in diamonds of one carat or greater.
"It clearly shows that, with increased sampling, further and larger diamonds should be forthcoming in-line with statistical projections.
"We also expect improvement in the grade as sampling increases - the recovery of a single large stone can have a disproportionately positive effect on the total carats, and thus on the grade, as has already been demonstrated."
Paragon has an 85% stake in Lemphane, which is one of three projects it is advancing in Lesotho.
The current sampling programme is aimed at providing a maiden resource at the site.
The discovery of the larger stone helps support the company’s thesis that Lemphane is a low grade, high value kimberlite. Certainly the results are in keeping with those from other pipes nearby.
Fox-Davies mining analyst Rose added: “We view the fact that such a relatively small sample gave such a large stone as very positive.
“There are a large proportion of plus-two carat stones, which is in keeping with diamond pipes in Lesotho.
“Whilst very positive, we await with interest the start of trial mining when a really meaningful tonnage will be treated that will give a much more representative sample.”