Located about 100km south of the settlement of Borroloola, the Merlin diamond project features 14 kimberlite pipes, grouped into four clusters.
ABC cited Merlin Diamonds managing Joseph Gutnick as saying that the processing plant has begun taking ore and is expected to find bigger diamonds.
"We’ve got a mine life of at least 15 years, so the probability of us finding more of those and bigger ones is there and we’re praying for them," Gutnick added.
In addition to significant near-term production potential, the project has high priority exploration targets within the tenement holding surrounding the Merlin Diamond project.
Nine of the Merlin pipes have been subjected to open-pit mining, since 1998, over a five year period.
The mine is likely to produce 250,000 carats per year in full production mode.
