Shares on Botswana Diamonds (LON: BOD) soared on Wednesday after the company revealed that its Thorny River project in South Africa was likely to hold kimberlite volumes “considerably better than expected”.
The stock rose as much as 19%, reaching 1.1p each in early morning and, while it lost some of the gains, it was still trading almost 11% at 1.02p by mid-afternoon. That put the company market capitalization at £8.71 million (almost $12m).
The company said that following a preliminary assessment of Thorny River’s kimberlite potential, it estimated the asset hosts about 2 million tonnes of kimberlitic material, up from the 1.2 million previously determined.
“Let me put this in context. The 2 million tonnes is almost twice the size of the nearby Marsfontein deposit,” Chairman John Teeling said in the statement.
Botswana Diamonds has identified four more potential blows, which could increase the kimberlite volume still further, it said.
Teeling said these discoveries enhanced the chances of developing a “hub and spoke” mining project, which the company fully owns since last year.
Analysts from SP Angel noted the promising results “will need to be verified by drilling and a formal resource and reserve assessment to determine the tonnages and grades available for any future mining project”.
Botswana Diamonds said it is now assessing mining options for the complex, located in South Africa’s northern Limpopo province, adding that it hasn’t yet assessed the potential diamond grade.