Frontier Diamonds (ASX: FDX) has uncovered an 111 carat diamond at its Bellsbank kimberlite pipe project in South Africa while processing kimberlite material and tailings through its recently built dual-purpose plant.
The company pointed out it was unable to confirm whether the diamond came from the tailings or kimberlite bulk sample from the project.
However, during earlier plant commissioning, Frontier recovered a 1.45ct diamond, which it pinpointed to coming from Bellsbank material.
An independent report has confirmed the presence of a 0.35 hectare kimberlite deposit at Bellsbank with an estimated grade between 10 carats per hundred tonnes and 30cpht.
Before today’s news, Frontier was in the process of undertaking a $1.075 million placement to boost its working capital while it ramps up production at its other South African diamond operations: Sedibeng and Star.
As a result of the placement proceedings, Frontier placed its securities in a trading halt when it confirmed the Bellsbank diamond had been discovered.
Under the placement, Frontier will now only accept commitments from investors that held securities prior to today’s news.
Frontier hopes to raise $1.075 million by issuing 26.875 million shares at $0.04 each – which is 20% discount to the company’s share price prior to news of this latest diamond find at Bellsbank.
Frontier sent the diamond for an independent valuation and will update the market on its value.
Sedibeng and Star diamond mines
Frontier owns a 74% interest in Sedibeng and Star, with throughput at Sedibeng anticipated to reach 10,000t per month by the end of September and mining at Star to hit 5,000tpm by November.
Both assets have high-grade resources with Star possessing a resource of 79.7cpht and Sedibeng hosting 47.7cpht.
At the last three tenders, Frontier attracted about US$408 per carat for its Sedibeng diamonds including the sale of a 31.2ct diamond for US$15,942/ct.
During the June quarter, Frontier generated US$1.2 million from the sale of its diamonds.
The news pushed Frontier’s share price up 14% to reach $0.057 by late afternoon trade.