Hello Peter
There are so few ladies to talk to on these threads, a guy's gotta do
what a guy's gotta do! Oh well, she's married anyway....
DeBeers is only interested in maintaining price stability and market share. If they are cutting back production it is probably only in specific areas such as pipes that predominently produce Indian Goods or stones of less than a carat. Prices in that market have stabilized while the market for quality goods of a carat or more is increasing 6% year over year with similar price increases.
I would not put too much weight on reports of diamond production or sales from DeBeers anyway. They are in the disinformation business with long term strategic objectives.
I am sure you have already noticed that things are slow all over the diamond exploration field this year, not just SUF. No big new discoveries announced and Ashton has yet to prove an economic pipe. If they do however, that will heat things up for the summer.
I still anticipate that SUF, ABZ, LTL, CAV, CNB and possibly MPV/GGL will have something to say before September/October.
I think SUF is primiarily focused on getting Klipspringer up and running by developing adits, and is therefore not necessarily as aggressive as they otherwise might be on the exploration front. They want that cash flow so that they don't have to go back to the market too often. I am OK with that. Diamet is in a similar position and both stocks have stabilized albeit SUF took a hit.
I actually find myself hoping that they don't have any announcements until late December as I would like to accumulate more at the winter cycle. If things stay the way they are right now, the cycle could bring the price down to the low 7's or possibly the mid 6's which would make this stock a steal.
Look at ABZ. It was trading down in the 19's yesterday before their announcement. There could be some real bargains this fall, but so far it doesn't look like DMM is going to get caught in the down draft.
Institutions are definitly moving into DMM and to a lessor extent SUF, you can see it in their lack of price volatility and thin trading ranges. I doubt as big a % of institutions are into ABZ as yet as production is still much too far off.
One other thing that is worth keeping in the back of your mind. SUF is still very committed to the KLA property and only got to about half their targets before ice out this spring. There could be some good news from there yet and KLA is trading at October prices today.
I think KLA's CEO drove the conservatives at SUF crazy this year with all his faxing from points south, and I suspect as a result, SUF has probably adopted a bit of a go slow policy in return.
KLA's management has quite a history that bears a cautious approach, but for a flip, $0.36 looks pretty attractive.
Regards |
