Tomato,
Author: Sierra Cat --
Date:1999-03-22 15:12:13
Subject: Blinders, perhaps?
I hate to wade in, as I have no direct
interest in WSP, but TV continues to
spurt out his occasional warps on reality
. I have read your statements now a
number of times that Diavik will be a
producer of "Indian Goods," implying
that Diavik's production will only be
suitable for the low cost cutting and
American "Wall Mart" style marketing.
It has gone unchallenged long enough. I
suppose that if you blurt it enough times,
someone will start to believe.
An average value of $60/ct certainly
would make most of the some
200,000+ full time (perhaps up to
800,000 part time) Indian cutters weep
for joy to see such 'Indian goods" cross
their tables. I believe you are sadly
mistaken in such an assumption.
Summary and references to the Indian
cutting industry are available in back
issues of 'Gems and Gemology' by a
good fellow named Dr. A Levinson, et
al. I don't think the papers are available
on the internet, so your DD will have to
involve a little more than clicking a
keyboard. Check him out, he has some
very valuable insights into the diamond
industry. Rest assured that an
AVERAGE rough value of $60 far
exceeds that value presently consumed
by this enormous Indian cutting industry.
Surely, any mine producing 6-8M ct per
year will result in some mill run that
meets that "Indian" demand presently
largely filled by Argylle, with its $8/ct
average, and certainly that $60 average
value does not meet those values of
some of the spectacular Russian pipes.
The FACT that Diavik averages about 4
carats per tonne at an average value of
$60 (round numbers for arguments
sake) speaks for itself, probably lending
itself to marketing in ALL value
channels. Just imagine throwing away
the "lowest grade" 2-3 carats per tonne,
and figure what the remaining stones
would be worth without those laggard
"Indian goods" dragging them down.
That remains the $64 (or should I say
$60) question, for which no amount of
speculating will answer. You see, that
number is a very closely guarded secret.
You'll need a better argument based on
fact to continue your Aber slams on
these lines.
BTW, good luck with your WSP.
Remember that true success doesn't
need to come at the expense of another.
(unless your lashing out at Diavik is a
cover, an attempt to take attention from
some terrible truth or threat you
perceive to WSP!)
Ssssssssierra,
Back to nap.
Top
Reply
Author: WillP --
Date:1999-03-22 16:06:07
Subject: Retract Claws...Two
Aspirin...Call Me in the Morning
Sierra:
Actually...I waded in on this issue
about a month ago. Thought I
had waded through enough fact,
science, and math to prove the
point.
Seems the vaccination wore off.
:-)
I'll try it yet another way using
other's stats. Ekati, it is claimed
has 30% of its diamonds
classified as 'gem quality'. Diavik,
it is similarly claimed...rates only
15%. Winspear? Well, the claim
has not been made, however if
44% are white, and 87% are
transparent...then 40% should be
classified as potential 'gems'. That
was based on small stones. I'm
guessing the bulk sample returned
a value around 50%...if ranked in
a similar fashion to the above
figures.
These numbers aren't mine...and I
think they may be misusing some
terms. But the main intent is still
there.
So..in very round numbers:
Ekati grades around 0.9 carats
per tonne valued at about $130
US per carat for its two main
production pipes.
Diavik grades around 4.4 carats
per tonne at $60 for its two main
pipes.
Winspear grades around ???
carats per tonne at $??? for Snap
Lake. (OK...let's use 1.4 and
$220)
Ekati has 0.27 carats per tonne
of gems, valued at about $430
per carat.
Diavik has 0.65 carats per tonne
of gems, valued at about $410
per carat.
Winspear? Well...maybe about
0.7 carats per tonne valued at
$440 per carat....based on the
above assumptions.
It remains to be seen if Snap
Lake can match or exceed the
$300 US per tonne standard.
In any case....I've addressed this
a different way once...now this
way.
But why?
Isn't it clear? People pay money
for value. Fine gems have value.
Junk does not. So...if A154
South is worth over $300 per
tonne....that's not junk, right?
Right?
Regards,
WillP
Top
Reply
Author: teevee --
Date:1999-03-22
17:00:46
Hello Willp, <<<>>>
Let me get this straight
now....are you saying that
40 carats per tonne
at$8.00 per carat or in the
case of A154, 5 carats per
tonne at $60.00 per carat
is equivelent to 1.00 carats
per tonne at $301per
carat? They are all
apparently worth about
$300.00 per tonne.....I'll
take the 1 carat per tonne
at $300 per carat,
thankyou.....This way I
won't need a marketing
agreement with the CSO
cartel to foist lesser value
goods on buyers.....I
wonder if site buyers
accept CSO parcels with
many diamonds in each
parcel they would rather
not have to buy, because
they have no choice?
Maybe producers of lower
value goods coveat
marketing arrangements
with DeBeers? regards,
teevee
Top
Reply
Author: WillP --
Date:1999-03-22
18:01:11
Subject: Money Is Money
Greetings teevee:
That's exactly what I am
saying.
I'll take $300 US per
tonne over $250 US per
tonne, over $150 US per
tonne any day. It's really
that simple.
I don't care where the
value comes from. In that
regard, I'll also take one
ounce of gold per tonne.
I'll also take 75 kilograms
of nickel or 150 kilos of
copper per tonne, or
whatever amount it takes
to equal $300 US per
tonne.
Value is value. Is it not?
Having said all of that...you
apparently don't have what
I did say straight.
If Ekati has a 30% gem
quality rate, and Diavik has
a 15% rate...and Snap
Lake has a 50% rate...then
they probably have
comparable quality of
stones in the gem category.
Key word here is
comparable. Near about
the same value per carat,
based on what information
is available. Diavik has
twice the number that
Ekati does, and possibly
Snap Lake has an equal or
greater number than
Diavik. Possibly.
If Diavik's value per tonne
is double that of Ekati's,
well you can bet your
bottom dollar that there
are more fine gems in
Diavik than at Ekati.
It's simple math, is it not?
Unfortunately, people
impart too much
importance to the word
'average'.
Take two rolls of pennies,
and one of loonies. Throw
them in a used kitty litter
box. There's 125 coins in
there...each worth $0.20
approximately.
Would you go rummaging
through the box to pull out
a coin worth less than a
quarter? I strongly doubt
it.
Would you go through the
box to haul out 100
pennies? I doubt it
severely.
The 25 bucks in loonies is
another matter. The fact
that you realize an
additional buck from all the
pennies is trivial. You're
mining the kitty litter box
for the 25 loonies. That's
what makes it economic.
Now in the Snap Lake
case, that litter box
contains, say, 25 loonies
and 25 pennies. The
average per coin value is
$0.51 but when all is said
and done...you've
retrieved the same value.
But, yea...verily...the raw
stats keep being
trumpeted...carat per
tonne, value per carat, like
they really mean
something. They mean
sweet diddly squat.
What means everything is
the product of the two.
As to the marketing of
diamonds outside the CSO
being harder for lesser
quality stones, can you
quote an example?
I believe the largest
independent source of
diamonds is Argyle, is it
not? Care to comment on
the diamond quality there?
Cheers,
WillP
Top
Reply
Author: teevee --
Date:1999-03-22
20:34:26
Subject: It's simple math,
is it not?
Hello Willp, I'm starting to
get the impression you
have never worked in
sales. Is that correct?
If Ekati has a 30% gem
quality rate, and Diavik has
a 15% rate...and Snap
Lake has a 50% rate...then
they probably have
comparable quality of
stones in the gem
category.>>>
Fisrt, lets agree that gem
quality at Diavik, Ekati and
Snap Lake is comparable.
For the sake of discussion,
lets assume that Diavik and
Ekati market their diamond
through the CSO and the
stones are blended so that
the parcels are 22.5% gem
quality. The price of the
only parcel offered to you
is $10,000.00 dollars and
as a cutter you can get
50% margin on the gem
quality portion of the
parcel. If you don't take
the parcel offered, you go
home empty handed. You
stand to make $1225.00
profit on the whole parcel.
Now lets assume you are
offered a $10,000.00
parcel by Winspear and
the only parcel offered to
you is 50% gem quality
and you make 50% margin
on the gem quality stones.
You stand to make
$2500.00.00 profit on the
whole parcel.
Which parcel would you
buy?
Wait a minute you say, the
number, size and quality of
stones per parcel
obviously varies. How can
that be a fair comparison?
If you want an honest
answer to that question
and would like to get a
better understanding of
diamond marketing/sales,
go buy a couple of
diamond parcels at a CSO
site.
regards, teevee |
