African Diamonds upgrades deposit value

African Diamonds has significantly upgraded the value of its diamond deposit in Botswana after a detailed revaluation process.

Geneva based Mercury Diamonds increased the value of diamonds from the AK6 project by $23 a carat after it revaluated of a parcel of 1,760 carats from the discovery. The $162 a carat valuation is higher than the valuation provided by former AK6 partner and operator De Beers.

"Overall the diamonds from AK6 are deemed to be of very good quality and very attractive to diamond buyers," said Mercury Diamonds' Shlomo Tidhar.

However, Mercury also said diamond breakage, caused by the drilling and recovery process, was a significant problem in the samples. African Diamonds said it is adapting the plant to minimise breakage, allow diamonds up to 350 carats to be recovered.

Tidhar said it was reasonable to expect that a value of $200 per carat could be realised at full scale production.

"The $162 a carat value on AK6 diamonds is excellent and substantially higher than previous valuations," said chairman of African Diamonds John Teeling.

The mine is due to begin production by late 2011.