Aim-listed Pangea DiamondFields has lowered its production expectations at the Cassanguidi diamond project, in Angola, and has struggled with logistical and equipment problems at the operation, miningweekly reported.

During December, production has been negatively affected by logistical challenges and breakdowns with the project's primary excavators, the company said yesterday.

While the issues are currently being resolved, they are likely to hamper production in January ahead of the next diamond sale late that month.

Pangea has just completed an upgrade to the processing facilities at Cassanguidi, and will start ramping up to the revised target of 6 000 ct/m in the New Year, the report said.

The firm had previously said it expected to produce around 8 000 c/t, by processing about 37 500 m3 of in-situ gravel a month. The plant is now expects to process some 30 000 m3 a month, it said.

The ramp up to production will begin when seasonal rains abate in the New Year, Pangea said.

Additional earthmoving equipment will being moved from the company's South African operations to Cassanguidi early in 2010 to coincide with the expected improvement in weather and to boost the fleet currently on the ground.

Pangea emphasised that the company's status as a going concern is reliant on the Cassanguidi project scaling up “without delay” and the company's ability to source further bridging funding if the project is hit by delays.

“Cassanguidi target production at current prices will put the company in a cash positive position,” said CE Boris Kamstra.

“At that point, we intend to assess our portfolio of projects against an expected improvement in rough diamond prices and revise our strategy accordingly, including a review of the financing options required to achieve the company's strategic plans. This process will begin early in 2010."

Pangea secured an unsecured short-term bridging loan of 370,000 pounds from a shareholder earlier this month, said the report.