That's a lot of diamonds: Newfield's 7.4mct resource sends its shares flying

Africa-based diamond explorer Newfield Resources has announced a 7.4 million carat resource for its Tongo diamond project in Sierra Leone.

Investors sent the Newfield (ASX:NWF) share price up almost 34 per cent to 16c by midday.

The company says this 7.4 million carat resource could get even bigger, because the update was limited to a 230m depth for three of the four kimberlites, and covered just four of the eleven kimberlites at Tongo.

Kimberlite is a type of rock that sometimes contains diamonds.

Newfield boss Mike Lynn told investors Tongo’s diamond grades pointed to some of the most impressive kimberlites globally on a dollar-per-tonne rock value basis.

“The updated resource estimate is also predominantly limited to a depth of just 230m from surface,” he said.

“Previous deeper drilling has shown that these kimberlites extend to much greater depths which, along with the clear potential from other identified kimberlites on the project, would suggest the global resource could be significantly increased in the future with more evaluation work.

“It is for this reason that we have previously described the Tongo project as a potential generational asset.”

The resource update is part of the ongoing Front End Engineering Design (FEED) program for the Tongo Project, which is on track for completion in the current quarter.

The FEED program will finalise underground mine design, processing plant layout, and capital spending and operating cost estimates for the Tongo project.