Cambridge Mineral Resources, the AIM-listed exploration company, is extending its search for gemstones from Donegal to the Scottish Highlands after a geological study indicated five prime sites.

Mr David Bramhill, managing director, brushed aside scepticism: "When we first moved into Ireland, people thought we were suffering from spring fever."

Over the past two years, the company has spent some £300,000 sterling exploring in Ireland and found mineral indicators suggesting diamonds could be found there.

It will search a site in Scotland next week. Initial results are expected by the end of August. The company commissioned the study from the British Geological Survey, a division of the British Department of Trade and Industry.

"It's not done on a whim," said Mr Bramhill. "There's some serious money spent on two solid years of research and a lot of professional people helping us."

Other companies have been tempted to explore Scotland - thanks to the legendary discovery of a single stone at Ben Hope in 1885. But Cambridge Mineral Resources is the first to take the plunge.

One reason is that it has the support of an unnamed landowner. Would-be pioneers have been put off by the feudal system of land ownership. "No company is willing to invest a significant amount of money without government regulation giving them full rights to develop and mine an ore body," said Mr Warren Macleod, former managing director of European operations with Caledonia Mining Corporation in Canada.

Mr Bramhill said a deal would have to be made further down the line if anything was found.

Geological circles were more impressed than the City - the shares were unchanged at 15p.