Paragon Diamonds announces diamond valuations

RNS Number : 5974Q

Obtala Resources Limited

16 October 2013

 

16 October 2013

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Paragon Diamonds announces diamond valuations at Lemphane, Lesotho

The Board of Obtala Resources Limited, the natural resources investment and development company, announces the following RNS made by Paragon Diamonds Limited this morning.

The Board of Obtala is very pleased with the progress being made by the Board and management team of Paragon Diamonds and we remain firmly committed and supportive shareholders.

Obtala Resources Limited Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
Macquarie Capital (Europe) Limited (Nomad and Broker)
Steve Baldwin	[phone]
Nicholas Harland

 16 October 2013

Paragon Diamonds Limited

("Paragon" or the "Company")

(AIM: PRG)

Diamond Valuations

Highlights:

·           Valuation of Lemphane Kimberlite diamonds - individual stone values exceeding $2,400/ct

·           Presence of high value stones and large average stone size

·           Average value expected to increase as number of carats increases with Stage 1 production

Paragon is pleased to announce it has concluded a valuation on the parcel of diamonds (221.19 carats) representing the majority of pit samples collected over the Lemphane Kimberlite project in Lesotho.

The valuation was undertaken by WWW International Diamond Consultants Ltd in Antwerp, and included a re-pricing of the 90.22 carats previously valued in January 2013.

The valuation parcel of diamonds was made up from samples excavated from different locations from the surface of the Lemphane Kimberlite.  Some indications of variable stone valuations are evident which can be attributed either to varying sample locations or to the volumes of material excavated. 

1.       Samples from the centre of the Lemphane Kimberlite (Pits 2, 3, 4 and 5) contained the larger more valuable stones, with 12 stones greater than 2 carats.

2.       Samples (Pits 6 & 7) from the edge of the Lemphane Kimberlite contained no large high quality stones although these sample volumes were small and could be below the volume threshold for recovery of large stones

3.       The largest sample to date of nearly 3,000 tonnes (Pit 5) returned the largest stone to date (8.83carats) and there is a tendency for sample sizes in excess of 2,000 tonnes to recover a greater number of stones exceeding 2 carats

12 diamonds in excess of 1.80 carats (known as 2 caraters) were recovered and included two large stones valued at US$2,000 per carat (on 8.83cts) and US$2,400 per carat (on 3.71 cts) respectively.  These 12 diamonds represented some 63% of the parcel value but only 21% of the parcel weight, emphasizing the need to collect a large volume sample to recover the larger stones present.

Samples from Pits, 2, 3, 4 and 5, which make up the centre of the Lemphane Kimberlite, returned average carat values of US$582, US$413, $211 and US$609 per carat respectively.  

The most valuable stones in the samples are:

·      Pit 5, an 8.83 carat off colour makeable stone valued at $2,000 per carat

·      Pit 2, a 3.71 carat light yellow dodecahedron valued at $2,400 per carat

This central area of the pipe will be the focus of the Stage 1 production.

An average value of US$358 per carat was achieved for the combined overall parcel of 221.19 carats, including the samples valued in January 2013.

Great care must be taken with these valuation results as all the samples are too small to give representative average prices of the in situ resource.

Martin Doyle, Chairman of Paragon, commented: 

"Although the amount of carats recovered to date is too small to give a statistically confident average price for the diamond population in the Lemphane Kimberlite pipe, it is very encouraging to see a relatively large number of good quality stones showing at this level of sampling.  Since the 2 carater diamonds  recovered to date account for 63% of the value but only 20% of the weight, it is to be expected that the larger tonnages envisaged in mining  will result in  recovery of a higher proportion of larger stones. With the inclusion of the anticipated larger stones the average value is expected to increase. This has been observed in the historic data published during the sampling of other kimberlites in the region and is a function of having the majority of the value represented by a small number of large high value stones.  

The results are consistent with what would be expected from a parcel of similar size from other high value diamond populations from kimberlites mined in Lesotho such as Mothae and Letseng."

In accordance with the AIM Rules for Companies, the information in this announcement has been reviewed by Stephen Grimmer PhD., MSc., a qualified geologist with over 25 years diamond exploration experience.

For further information:

Paragon Diamonds Limited Martin Doyle - Chairman Simon Retter - Finance Director	[phone]
Sanlam Securities UK (Nominated Adviser & Broker) Lindsay Mair Catherine Miles	[phone]

 

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