STOCKS NEWS EUROPE-African Diamonds up on project update

Shares in African Diamonds (AFD.L) rise as much as 20 percent after De Beers sells its entire 71-percent stake in the AK6 Botswana diamond project to Lucara Diamonds (LUC.V), in a move expected to accelerate development of the mine.

FinnCap calls the announcement a crucial turning point, long awaited by African Diamonds, which holds 29 percent of the diamond project.

"We believe that De Beers was a reluctant seller of AK6 but was forced to surrender its interest because the considerable latent capacity within its existing open pit operations in Botswana meant that it was unwilling to build a new mine at AK6 within the timeframe stipulated by the terms of the mining licence," the broker says.

To see African Diamond's statement, click on [ID:nWLA7853]

Reuters messaging rm://julie.crust.reuters.com@reuters.net