Valuation of Paragon Diamond parcel confirms high-value

Paragon Diamonds said a 3.71-carat, sawable rough stone from its Lemphane kimberlite project in Lesotho has been given an independent valuation of in excess of $2,300 per carat.

The diamond is in a package weighing a total of 114 carats produced during bulk sampling at Lemphane. The diamonds were valued by WWW International Diamond Consultants.

Paragon said the nature of the diamonds is in line with sample results that it reported last April. The results showed rough diamonds of two carats and larger, and six were in a weight range of 2 to 6.3 carats.

Paragon said the larger diamonds account for more than 40 percent of the overall parcel weight, and will obviously have a strong effect on the average value of the parcel as a whole.

"These results are considered very encouraging indicating the presence of large, high value diamonds in the kimberlite," Paragon said in a media statement. "The company will commission WWW to model the diamond prices once the bulk sampling has produced a large enough parcel of diamonds (circa 1000 carats).

"The company has plotted the diamond size frequency distribution of this sample of diamonds. This distribution produces a smooth curve, and when this curve is projected in to the larger stone sizes it indicates that we can expect to see 10.8+ [carat] stones at a frequency where they will be common enough to make up 10 percent of the total carats in this kimberlite."

Paragon's CEO, Martin Doyle, said the confirmation of large, high-value diamonds at Lemphane provided confirmation of the miner's decision to speed up development of the deposit.

The transition from bulk sampling to mining on a trial basis with the expected production of several thousand carats by the end of the year took the firm closer to generating significant revenue from Lemphane, he commented.

"In addition to the Lemphane kimberlite, Paragon has already established an inferred resource at the Motete dyke. With our $10 million financing from our Basuto partner we are well placed to continue the development of our Lesotho projects.”