BDI Mining Corporation is optimistic that independent estimates will soon show significant increases in estimated potential diamond and gold resources.

The first commercial sale of gems from Toronto-based (but Aussie-run) BDI's Cempaka project in Indonesia has raised £1.4 million at an average price of $384 a carat, compared with a $285-a-carat valuation some months ago. Chairman Paul Loudon says a new resource estimate within two months is expected to show 'a significant increase' on previous figures, with possible production of 66,000 carats next year at a $120-a-carat cost, rising to 100,000 carats in 2007 and a prospective mine life of 'well beyond 10 years'.

If these hopes are realised, AIM-quoted BDI, which is currently debt-free, will devote much of the cash flow from Cempaka to developing its gold project at Woodlark Island in Papua New Guinea. Here too, Loudon suggests an independent resource update next month might increase the project's 'measured and indicated' potential from 380,000 oz to between 600,000 and 700,000 oz and hopes that further drilling could take it above the magic one-million oz figure, with a decision on production in 2006.

These days, both Indonesia and Papua New Guinea have favourable mining regimes, according to Loudon, a financier and former financial journalist Down Under. He says BDI is focused on mining projects in this region, rather than on any one particular mineral.

Floated last year at 14p, BDI's shares have more than doubled to 33.5p, where they value the company at £26 million. If the imminent resource upgrades live up to expectations, they should have more mileage yet.