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Gold/Mining/Energy : Canadian Diamond Play Cafi
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To: Bloomfield who wrote (4830)11/25/2006 8:32:53 PM
From: WillP  Read Replies (2) of 16206
 
Bloomfield:

You can decide there is a flaw in my conclusion -- which is merely an opinion, but not in my reasoning through the various facts and calculations regarding the diamond values, which are clear.

Someone called upon to defend the Salman report might do so as follows:

#1. The WWW appraised diamond values for the eastern lobe of 5034 was $133 (U.S.) per carat. That subparcel contained a single large stone that accounted for more than half the value.

#2. The other subparcels contained no such stones. Most analysts and modellers conclude the diamond value in the eastern lobe is too high, but an alternative hypothesis is that the samples from the other lobes and pipes were too small to produce a meaningful number of valuable diamonds. As a result, larger tests from those areas would yield a much higher diamond value. (In fact, that has been a common refrain from many of the Mountain Province shareholders.)

#3. Mining will start in 5034 and continue there for about five years at least. The higher diamond values come form that pipe. The Salman spreadsheet terminates before the lower diamond values in Hearne and Tuzo work their way into the mine plan.

I could see a CEO saying, 'Umm,yeah. Sure. You could be right,' in response to an analyst making the case for a markedly higher diamond value than currently modelled.

I think Mountain Province and De Beers have done a good job of putting forth reasonable estimates of the projected Gahcho Kue economics.

Regards,

WillP
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