Diamondcorp Share Discussion Threads

[jaf1948] 17/3/2015 07:41

I think it's swings and roundabouts. We needed to get cash from somewhere and this sounds the least painful for current shareholders. As long as it allows us to ramp up production more quickly, it should be neutral or beneficial IMO.

[adorling] 17/3/2015 07:33

Disappointing to see we need more financing to get through 2015 and we have now given 5% away in future royalty and structural charges (3+2) to Acrux. Patience required as always.

[ged5] 26/2/2015 10:43

Always good to read an upgrade again but it was posted in 1044.

Meanwhile a little retrace. Looks like the buying was in response to some tip at the beginning of the week.

[granitetim] 26/2/2015 10:27

Diamondcorp upgraded on Lace mine cash potential
By Philip Whiterow February 20 2015, 4:16pm The broker’s price target rises to 15.6p per share, from 11p per share.The broker’s price target rises to 15.6p per share, from 11p per share.
A punchy estimate of cash flow from its Lace kimberlite mine has prompted broker Northland to raise its price target and rating for diamond group DiamondCorp (LON:DCP).
The miner owns 74% of the South Africa-located Lace, which is scheduled to move into production this year.
Initial production is expected to be 68,000 catats (cts) from run of mine material with an additional 22,500cts from tailings processing, said Northland.
Output is expected to ramp up steadily to around 440,000cts per annum by 2017. Life of mine should be at least twenty-five years and may be longer with potential to explore deeper.
Over that period, Northland forecasts the operation will have a life of mine average cash flow of US$$34mln per annum with cumulative positive cash flow of US$$830mln by 2040, making Lace a “globally significant operation”.
DiamondCorp has already said that cash generated from Lace will be returned to shareholders, unless a “highly attractive” opportunity presents itself.
The broker’s price target rises to 15.6p per share, from 11p per share. Currently, DiamondCorp has a market value of £26mln.
Earlier this week, the company signed a landmark four-year wage deal with workers at Lace.
The agreement, with the Association of Mineworkers and Construction Union, allows an annual 8% increase in salaries for most Lace employees.
Analysts said that a four-year wage deal is unusual in South African mining and almost unprecedented in the diamond sector.
Lace is a relatively small employer compared to other mining projects in South Africa with less than 260 workers at present; the project would be able to carry the additional labour costs, Northland said.
Its rating is raised to ‘buy’ from ‘hold’.
Shares rose 4% to 7.9p.

[hpcg] 25/2/2015 16:33

Nope, buys and sells are the same thing; can;t have one without the other. It has been trading well within the spread for a while now, which is a good indication of liquidity and shows a reasonable agreement between buyers and sellers of fair value. Whether it goes up or down from here depends what happens first, buyers running out of money or sellers running out of stock.

The good thing for holders is that the stock has a time value of money attached to it, but unlike an option that value is negative. As time passes the cost of tying up funds waiting gets lower and lower and the more attractive the future cash flow becomes. I think we are still a bit early for major moves, but those who purchased a year ago can collect a 50-60% return if they choose, which is a very nice turn in anyone's books.

[wisecat2] 25/2/2015 16:22

A number of buys going thro as sells as usual

[jaf1948] 23/2/2015 20:39

RNS 29/01/15 'Development work in the Upper K4 (UK4) block is now on schedule for commencement of mining operations in H2 2015. This will be four months ahead of the original plan but delayed a few weeks from H1 2015 due to the impact of industrial action in Q4 2014.'

So we don't really know, but certainly in Q3 2015 (baring unforeseen problems).

[tiger60] 23/2/2015 19:01

I would say end of August.

[ged5] 23/2/2015 11:08

A good start to the week.

Is this the start of a re-rate or just the response to an opportunistic tip. By the end of the day we may know.

Production from the UK4 block starting about July this year.

[hpcg] 20/2/2015 12:11

I've bought more today, obviously in a small way, so by definition there are one or more sellers. The march of time de-risks, and the unanimous line up of broker opinion does not hurt. The price break out will be the important event as the watchers and waiters will reach a point where they either have to jump in or walk away entirely.

[ged5] 20/2/2015 11:49

Has anyone done any calculations on how many share L&G have left?

It begs belief as to why they are selling at a time when DCP is about to go into production.

[ged5] 20/2/2015 09:42

"NORTHLAND CAPITAL PARTNERS VIEW: DiamondCorp is moving its 74% owned Lace Kimberlite Mine into commercial hard rock production this year, targeting production of 68,000cts from run of mine material with an additional 22,500cts expected to come from the tailings reprocessing. Production levels are expected to increase by almost 167% in 2016 and by 144% in 2017, reaching 440,000cts per annum in 2017 and levelling off after this. The mine is expected to have a life of at least twenty-five years with the potential to extend this by going deeper. We expect the operation to have a life of mine average cash flow of USD$34m per annum with cumulative positive cash flow of USD$830m by 2040, making Lace a globally significant operation. DiamondCorp has stated that it plans to return the cash generated from Lace to shareholders, unless a highly attractive opportunity to further improve returns is encountered, though at present there is no official dividend. Based on changes to our forecasts we have increased our price target to 15.6p per share, from 11p per share, an upside of 105% on the current share price."

[ged5] 20/2/2015 08:32

Northland Securities have moved from hold to buy this morning.

"Diamondcorp Plc (LON:DCP) was upgraded by research analysts at Northland Securities to a “buy” rating in a report released on Friday. The firm currently has a GBX 15.60 ($0.24) target price on the stock, up from their previous target price of GBX 11 ($0.17). Northland Securities’ target price would suggest a potential upside of 115.17% from the stock’s previous close."

[hpcg] 18/2/2015 12:33

Starting to look very interesting technically. The last 3 years since january 2012 has seen a gradual rising trend line, but no monthly close above 7.5. Indeed no weekly close above 7.5. There have been daily closes at 7.75 but only a couple. A close near to or above 8 even on daily basis will set 1Y high alarms off.

[ged5] 18/2/2015 11:59

SP Angel's conclusion:-

"Conclusion: As our recent site visit confirmed, the Lace mine is moving forward methodically towards re-opening in H2. Securing a stable industrial relations environment is further evidence of the systematic management approach which has characterised the redevelopment of the mine."

[ged5] 18/2/2015 11:14

Northland are out of sync with almost all other brokers and have a "hold" rating.

" Four year wage agreement with the AMCU
DiamondCorp has signed a four year wage agreement with the Association of Mineworkers and Construction Union (AMCU) and covering all employees at the Lace Diamond Mine.
The agreement is based around 8% annual increases in basic salary for most categories and a progressive lift in the lowest categories to SAR12,500 (£700) per month basic salary over four years.
Forecasts and price target currently under review, HOLD rating maintained.

NORTHLAND CAPITAL PARTNERS VIEW: This agreement follows the end (05/12/14) of a six week strike by the Association of Mineworkers and Construction Union (AMCU) members at the Lace Mine over the appointment of two full time shop stewards. Strikes have become a major issue for mining companies operating in South Africa and it is sensible for DiamondCorp to minimise its risk of further industrial action, particularly during the early years of production, with a longer term wage agreement. The Lace project is a relatively small employer compared to other mining projects in South Africa with less than 260 workers at present; the project is also economically robust and as a result, will be able to carry the additional Labour costs, while still generating significant returns for the Company’s shareholders."



Meanwhile Sanlam Securities reissued a buy recommendation this morning.

[ged5] 18/2/2015 08:00

Indeed! Very good news. One of the biggest drawbacks of investing in a company operating in South African is industrial relations. I think this RNS allays those fears.

This is the only diamond company that will have maiden FULL production later this year. It's already had sales. Rare coloured diamonds are known to be present. Costs under control. Finance sorted. NPV 39p share price 7p. Production ahead of schedule. Management who communicate and also own shares.

Best leave these alone then and go and find some cr*p where there's lots of hype. ;))

[jaf1948] 18/2/2015 07:13

More good news:

Diamondcorp Plc Four Year Wage Agreement Signed

RNS Number : 1556F

fOUR YEAR WAGE AGREEMENT SIGNED

DiamondCorp, the Southern African diamond development and exploration company, is pleased to announce that its 74%-owned subsidiary Lace Diamond Mines (Pty) Limited has signed a four year wage agreement with the Association of Mineworkers and Construction Union (AMCU) and covering all employees at the Lace diamond mine in the Free State province of South Africa.

The agreement is based around 8% annual increases in basic salary for most categories, along with a progressive lift in the lowest categories to R12,500 per month basic salary over the four year period.

DiamondCorp CEO Mr Paul Loudon said: "This long wage agreement will provide industrial relations stability at the Lace mine during the critical mine start up years and demonstrates a solid maturing of relationships between the union and management. We are particularly pleased to have negotiated a four year agreement rather than the more common two or three year agreement".

[jaf1948] 16/2/2015 12:05

Euan Worthington said npv is 39p against 7p share price. Something to think about

[ged5] 16/2/2015 11:28

Some background to the 121 Mining Investment Conference

"To put it simply. Companies are put in front of fund managers that have expressed interest in a meeting. Thus, among the more notable attendees are Bert Koth, the head of Denham Capital, a representative from PIC, the head of resources investment at Investec, a vice president of Pala, the head of resources investment at Nedbank, Frank Holmes, who needs little in the way of introduction, the well-known resources investor Julian Treger, now heading up Anglo Pacific, and so it goes on.

And while the money meets the miners in separate rooms in the palatial farmhouse that the 121 team have secured for the event, there will also be a simultaneous schedule of presentations from industry experts like share price Angel’s John Meyer and VSA’s Andrew Monk, and company directors like Brad Mills, Euan Worthington and Steven Bartrop, the CEO of Breakaway Investments."

[ged5] 29/1/2015 19:29

Panmure Gordon restated their buy rating on shares of Diamondcorp Plc (LON:DCP) in a research note issued to investors on Thursday. The firm currently has a GBX 19 ($0.29) price target on the stock.

Diamondcorp Plc (LON:DCP) opened at 7.35 on Thursday. Diamondcorp Plc has a one year low of GBX 4.993 and a one year high of GBX 8.25. The stock has a 50-day moving average of GBX 7.13 and a 200-day moving average of GBX 7.05. The company’s market cap is £23.4 million.



has anyone got access to their research note?

[ged5] 29/1/2015 19:26

DiamondCorp (LON:DCP) – Update on Lace Diamond Mine shows progress on development

• Development work on the Upper K4 block is now on schedule since the six week strike.

• Production is now scheduled to start in H2 2015.

• The underground conveyor system is 80% fabricated and 30% installed and is on schedule for commissioning in H1 2015.

• Development work is higher than budgeted at R40,764 per metre against R37,000 per metre.

• This is being offset by savings on maintenance and repair costs.

• A fall in oil prices is not being reflected yet in Rand diesel costs.

• Core drilling continues to delineate significant volumes of K4 kimberlite above the 365m level with a resource now expected in Q1 rather Q2.

• Diamond sales totalled US$1,361,778 for 21,700 carats with an average sales price of US$63/carat.

• Profit share from the beneficiated 15.2 carat diamond came to $58,544 carats.

• The short term market for rough diamond market remains weak.

• The valuation on Lace based last done in 2012 was US$160 per carat and the company have re-run their models at US$150 per carat.

Conclusion: Schedules have slipped slightly as a result of the strike but we do not consider these to be material at this stage. The company has run its valuation on US$150 per carat instead of the current US$160 per carat in light of the current weakness in diamond prices – we concur with their view that their margins against a weaker rand gives them ample room.

Should the company progress to production in H2 2015 this would be positive for the company and start to crystallise value. We remain buyers.

[tiger60] 29/1/2015 16:48

Isn't that a contradiction? It impacted the schedule for the worse but no financial impact? Their npv calculators must be bust.

Surprised but happy at the end of day price. Meet you all back here on 30th April

[jaf1948] 29/1/2015 14:49

Thanks for that - quite reassuring.