JOHANNESBURG (miningweekly.com) – South African diamond development, exploration and mining company DiamondCorp narrowed its net loss during the year ended December 31 to £2.61-million from £3.53-million in 2012 and £4.24-million in 2011 as a result of further cuts in overhead costs.

This translated into a headline loss a share of 0.86p, down from 1.22p previously.

The company pointed out that, during the year under review, the finance package for its Lace mine, in the Free State, had been finalised, surface facilities had been installed and underground mining had started.

“We are now a mining company and diamond producer, well on the way to unlocking the treasure chest underground at the Lace mine, while seeking other opportunities to build our company into a strong and profitable midtier diamond miner,” DiamondCorp said.

The Lace mine’s underground mining fleet continued to provide near to 90% availability with operating costs running at 95% of the budget.

SP Angel stated that the final results showed good progress at the Lace mine.

The firm stated that DiamondCorp appeared to be on course with its development programme at the Lace mine and maintained its "buy" recommendation on the company's shares.

Meanwhile, DiamondCorp added that it believed that the outlook for diamond prices was positive particularly with growing demand from developing countries such as China and India.

“On the supply side, major new mines are not being discovered, older mines are having to develop underground – usually with lower output, new mine developments, such as Gahcho Kue, in Canada, are suffering delays and perhaps most significantly output from the Marange fields in Zimbabwe looks likely to fall sharply. All these factors are not helping to meet the growing demand for diamonds that we and industry observers expect,” the company said.