Hi Vaughn,
Whatever you say, it's a gamble my friend. Most pipes of kimberlite, anywhere in the world are uneconomic. Out of the hundreds of pipes discovered in the NWT,...only a handful are economic, and several appear to be sliding into the uneconomic category as the private interest groups and government try to bleed them dry in the NWT. SUF has more than 20 years production of economic fissures in SAf right now. SUF needs nothing else to acquire a $5.00 plus share price right now than to exploit those fissures. The analysts and brokers have punished SUF for the elitist arrogance the management has displayed recently, by assuming that earnings mean nothing. This has caused the shareprice to plummet to $2.30 from over $10.00. The street is demanding earnings, and to think management can ignore that could be the undoing of all the shareholders.
Perhaps a discussion of the dynamics of diamonds coming to the surface of the earth is needed here. A weakness occurs in the crust of the earth. A volcanic eruption occurs at depths in excess of 500km. This eruption branches out and some of the branches breach a zone in the earth that has diamonds in it. Many branches occur after that finger of lava hits the diamond stability zone and only a few of those resulting branches carry any amount of diamonds in them. Envision one branch pushing through the diamond stability zone,...by the time it hits the outer surface of the earth, it has branched into 100 or more branches of kimberlite, and only the pipes that came up first, the leading edge, will likely carry significant concentrations of diamonds to warrant commercial exploitation. The rest branched out at lower levels, unable to capture any diamonds from the leading edge that pushed through the diamond stability layer first. To clarify, envision a fist going through a piece of glass. The leading edge of the fist will have all the glass attached to it. Very few pieces of glass will adhere to the wrist, forearm and shoulder as it penetrates afterwards. Whatever goes through first, will carry the most diamonds to the surface. So only a few pipes will have economic concentrations of diamonds, because most of the kimberlite in a field went through the same small area of the diamond stability field 300 km or so below the earth and branched out at higher levels as surrounding pressure decreased.
Long winded explanation to say only a few pipes in the Yamba field will be economic, if any, and by the time the NWT, the Feds, the natives, the environmentalists and the other interest groups get through with it, the field will be placed on the backburner with Diavik and Mountain Province, and likely even Winspear's Snap Lake.
I agree with your past comments, that Brazil looks very interesting,...but maybe when the financial house gets in order.
I can't believe that anyone who bought this stock in the last year is happy with the performance lately. You have lost a great deal of money,...and to think we should wildly go off throwing money everywhere to find some great treasure, when we already have the treasure in SAf just seems like suicide to the shareprice to me at present. M1 is dying. Revenues are dropping. The balance sheet is being eaten up to fund exploration and the cashcows could start starving. Time to feed the cashcows so they can fund the future. Ignore their feeding now and risk the health of the company.
Just some hamster thoughts. Ignore them at our peril. |
