A little more on Canadian Diamonds.
idexonline.com
DDMI Supplying First Diavik Goods
(July 8, '03, 14:24 Edahn Golan)
Rio Tinto’s Diavik Diamond Mines Inc. (DDMI) is supplying an allocation of rough diamonds to the four manufacturing facilities in Yellowknife that have received approval from the Government of the Northwest Territories under its Framework Policy on Support for Diamond Manufacturing.
Rio Tinto Diamonds N.V., DDMI's sister company and sales agent, will allocate rough diamonds from the Diavik diamond mine to Arslanian Cutting Works NWT Ltd., Sirius Diamonds Ltd./E. Schreiber, Canada Dene Diamonds Inc., and Laurelton Diamonds Inc.
Laurelton is a subsidiary of Tiffany & Co. that has recently opened a Canadian rough diamond processing plant in Yellowknife.
The quantity of goods being offered to northern manufacturers out of DDMI's share of production from the Diavik mine represents 10 percent of the total available for sale in July.
First Rio Tinto Sight of Diavik Goods Held This Week in Antwerp
(July 9, '03, 18:40 Edahn Golan)
The first goods from the Diavik mine offered by Rio Tinto were sold this week in Antwerp to a select group of diamantaires constituting it’s first such ‘Sight’. The goods offered are similar to the gems from the Ekati mine, and were reportedly strongly priced.
Production at what is dubbed ‘Canada’s seconded mine’ is not yet up to speed, and it is believed that at least in the near future Rio Tinto will not hold a sight every month, in order to offer a certain minimum each time.
At full capacity Diavik is expected to yield $31 million worth of diamonds per month at an average of $62/carat, while gross estimate of this sight is that it’s only around $15 million.
Assortments to customers were tailor made for each customer, generally broken down to good, poor and wide range assortments. No run-of-mine assortments were offered to customers. The list of buyers was apparently based on the Argyle list of customers with a small addition of a few new names.
Premiums on rough on the market are still high despite the added goods, out of tune with the polished market and without any clear and visible reason.
Now if you do a few sums, then DDMI will be offering $31 million worth of diamonds a month (representing 90% of their share of production) to Antwerp and 10% of production to local firms. They are entitled to 60% of the diamonds produced and Aber gets 40%.
So DDMI's 60% share would be worth $34 million a month, and Aber's 40% worth around $23 million. Assuming 12 months in a year that's $275 million for Aber with just over 50m shares gives earnings of $5.50 a share.... a P/E of under 4!
And this figure is derived from the buyers figures not the company's... |
