The accident occurred on Sunday after a landslide in very heavy rain "led to the death of almost 40 of our compatriots", presidential spokesperson Prosper Ndouba said on national radio.
"It is to be feared that the casualty toll may unfortunately rise in the next few hours or coming days," Ndouba added.
"Confronted with this tragedy, the president of the republic presents his sincere condolences to the families of the victims and to the entire Central African people. He has decided on three days of national mourning as of Tuesday."
A source in the district administrator's office in the central Ouaka region said there was "no hope of finding any survivors" in the mine, which has been active since 2009.
Several dozen miners had been working several metres beneath the surface in a region that had turned into a muddy swamp, the source added.
Ndassima lies 440kms east of the capital Bangui, in territory controlled by former rebels of the Seleka alliance, which ousted president François Bozizé in March. Djotodia, a key leader in the armed coalition, declared himself president and was subsequently endorsed by a national transitional council.
The gold and diamond mining sectors are key to the economy of the highly unstable, landlocked nation. Around a quarter of the population of 4.5-million people are reliant both directly and indirectly on the diamond business. – AFP