Results such as those from diamond hole DH319 in the central vent area of the AK1 pipe, which returned a lamproite intersection grading 4.7 carats per tonne over 392m, are further evidence of a significant underground resource, the company said.

Ashton, which owns 40% of the Argyle mine, is likely to take the operation underground after open pit expansions finish in 2007. If other holes drilled in the central vent area return similar results, the underground mine life could be stretched beyond the 11 years currently forecast, Ashton chief executive, Doug Bailey, said.

“We are delighted with these results, which not only further our efforts to quantify the potential of Argyle, but strongly support our belief that the market has long underestimated the value and potential of Ashton and its stake in the Argyle mine,” he said.

Ashton is incensed by a $1.62 per share takeover bid by De Beers, which effectively values the company at $522 million, calling it inadequate and opportunistic.

Ashton shares were trading up 2c at $1.86 in morning trade.