The company had previously planned to move the mine into care and maintenance in May, with mining operations stopping at the E9 mine last year.

In the latest update, Kimberley said new efficiencies and reduced costs meant it could continue processing into financial year 2016.

“The continuation of processing operations at Ellendale into FY2016 is a great result and reflects the hard work of the management team and the team onsite at Ellendale, who have worked tirelessly on improving efficiency and productivity at the mine, and exploring options for the processing of stockpiles from our E4 mine,” Kimberley managing director Noel Halgreen said.

“Kimberley’s Ellendale diamond mine is the world’s leading source of rare fancy yellow diamonds, and ongoing operations will see continued access to an increasingly rare product in the diamond market.”

As part of the FY2016 plan Kimberley said it would process stockpiles from Ellendale’s E4 mine, which has been on care and maintenance since 2009.

Higher grades are expected from the E4 stockpiles compared to processing from the current E9 stockpiles.

Mapping out the path ahead, Kimberley said it would process low grade stockpiles from E9 until they were depleted in early May.

Stockpiles from E4 will then be hauled to the E9 plant to be processed with material from the E9 lights stockpile.

After that, processing of the E9 lights material is expected to continue until the end of 2015.

Kimberley said extending operations beyond December would hinge on further improvements in costs and the Australian dollar.

The current plans are expected to provide $A15.8 million revenue in the June quarter, rising to $17.6 million and $18 million in the September and December quarters.

Kimberley shares were up 1.4% to 7.2c.