Rex Moves Onto Web and Into Mauritania
By Marc Goldstein
Rex Diamond Mining Co. is stretching toward new horizons. The company now owns and operates fissure mines in South Africa, which, though relatively small, produce large, fine quality stones. Current production reaches about $800,000 a month and is expected to increase over the coming years. Rex Mining markets part of the production and polishes the rest.
Rex Mining?s polishing operation is an important element of its overall marketing strategy, said Serge Muller, the company?s president and CEO: ?We have alliances with Italian jewelers, such as Flavio Sacchi, who develop original jewelry lines for us. This provides glamorous packaging for our diamonds.?
Packaging is about to become even more important because these jewels, which range in price from $300 to $5,000, are slated to hit the internet on a new site to be launched within weeks. The final steps for launching the site are currently underway. High-quality photos of each piece are being taken, and the technical details are being fine-tuned for the opening of rexdiamonds.com.
Image Builder
Rex expects that its internet venture will serve a double purpose. One goal, of course, is to make a profit. The other is to build a global image that will bolster the company?s presence on the Toronto stock exchange and on Nasdaq, where it plans to begin trading in the coming months. ?We expect that the sales of Rex-branded authentic jewelry will enable us to develop our image worldwide,? Muller explained. Rexmining.com will remain the company?s corporate site, while the rexdiamonds.com site will be entirely dedicated to jewelry sales.
The CEO commented that his company?s assets also include concessions in Sierra Leone, which have remained unexploited for about 3 to 4 years because of the country?s civil war. ?We are really hoping that the situation will soon return to normalcy, so that we can start working again in this region,? he said.
The company?s main focus for the past two years has been on investing in its own growth. ?One of our main concerns today is the exploration of diamondiferous deposits in Mauritania. This project is headed by Dr. Luc Rombouts, from Ghent University,? said Muller. Dr. Rombouts is an experienced geologist, noted for his analysis of the diamondiferous soil in Canada. He was working on the Rex properties in Sierra Leone, and when the civil war began, he proposed that the company turn to Mauritania. This episode, which took place about three years ago, led the company to ask for claims from the Mauritanian government.
?At that time we were the first ones to make such a request, which somehow astonished the government. They did not seem to believe there could be diamonds in their own soil. They answered, ?Take whatever area of desert you need.? which is what we did. We chose what appeared to us to be the most promising area, located on the rim of the Taoudeni basin. At the time the mining code authorized a maximum surface of 100,000 square kilometers, and this is what we were granted.?
Scouring the Earth
Since then, a tremendous technological and financial effort has been undertaken. ?Following a period of aeromagnetic research aimed at detecting potential Kimberlite-bearing deposits, Jeeps equipped with GPS began traveling across the whole desert according to well planned grids. They have gathered so far about 16,000 soil samples (weighing 1 kilogram each), at a rate of 1,000 samples a month.?
The samples are automatically forwarded to the John Gurney?s South African laboratories, Diamond Services (Capetown). The Muscovite laboratory of Felix Kaminsky ? specializing in the mathematical analysis of mineral surface structures ? is also involved in the Mauritanian project. The samples are being carefully studied to detect the presence of various minerals (such as chrome diopside, pyrope, garnet and ilmenite, generally referred to as Kimberlite Indicating Minerals) that usually grow at the same depth as diamond. This technique has been successfully applied in the Canadian North West Territories and appears to be delivering very promising results for Mauritania.
So far, more than 100 diamonds, mostly gem quality, ranging from 0.5 to 2 mm diameter have been discovered in four different areas. When the major deposit is pinpointed, Rex will install bulk sampling plants that will process several thousands tons of kimberlite and indicate more precisely the area?s potential output.
Going It Alone
?After the first discoveries were made, we were approached by several major companies to set up joint ventures, but our policy is very simple: as long as we can afford to be independent, we want to be. In that respect, let?s bear in mind that capital increases on the international stock markets are a source of funds we can count upon. Currently we own 100 percent of the mines.?
According to Muller, should the major discovery take place during the year 2000 as expected, the first commercial production should reach the market around 2004. ?The provisional life-span of these Botswana type mines is at least 50 years, and the large pipes are expected to be almost intact because there has been very little soil erosion in this desert area. The expected yield of each mine, based on a rough value of $80-$100 per carat, is about $400 million a year, which would yield a net profit of about $350 million to be shared equally between both our company and the Mauritanian government.?
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