Cambridge, the mineral resources firm listed on the Alternative Investment Market (AIM) in London, has commenced drilling in search of diamond, ruby and sapphire-bearing rock at the Inishowen peninsula in Co Donegal.

The company has already invested more than £500,000 sterling in the project, its managing director, Mr David Bramhill, said yesterday.

Magnetic surveys conducted from an aeroplane with ground geophysics testing and geochemical sampling at eight licence areas near Moville confirmed the potential of the project, Mr Bramhill added.

Drilling is being conducted by Irish Drilling Ltd and the project is led by a Canadian geophysicist, Mr Jason Bak. The company acquired a Spanish mining development, Recursof Metallico, in a share deal valued at £1.5 million in July. This project, located within the Iberian Pyrite Belt, has reserves of 1.6 million ounces of gold.

Cambridge also has mineral rights over 12,000 square kilometres in the Falkland Islands.