Yes Walt: Little did I know 14 months ago., that the complexities
to snap lake would be the subject of such speculation. However.,
I feel somewhat vindicated., that my basic analysis of the potential
of the grade and quality has been re-inforced over the last year.
I guess one of the things I admire about companies such as Winspear., Gerle and a few others is their attitude. That attitude being
were going to drill til we prove what is there. Back in 94., several
companies., of which I wont mention., ravaged the area doing JV
fly overs., and droped a few drills in the ground and moved on.
I remember sitting home one day and watching CNBC. John Murphy
was doing a speil on gold. He mentioned a diamond discovery in the
NWT and the Point Lake discovery. Man did my heart start pounding.
The next day here appears an ad on CNBC., showing this company
doing aeromag surveys over the Tundra., flash in the next clip., they
show kimberlite rolling down the conveyors., and a pile of nice diamonds. Well, thinking back., now it was the Torie pipe and the
Mill City Mining discovery. This started me thinking. So the first company that came along., used to be a satelite to Bema gold., man
I plopped down a wad. I think it was trading at .25C. Well., I didnt
watch it very close in the beginning. Before I knew it these guys
dropped a few drills down., the stock was trading then at about .60C.
I said man I am in the money. Oh about three or four days later., it was
trading at .12C. Learned a valuable lesson on that one. Today., however the technical expertise and knowledge in exploration has
advanced considerably from those early days. The easy targets have
for the most part been found., but I think it is really just the beginning.
There is no question given time the NWT could become a major diamond producer worldwide., and help take some of the burden off
the gold producers for keeping jobs in the area. I think if one excludes
the 36,000,000 carat/yr from the Arygle out of 110.,000,000 world wide. There is no question any rich discovery will have its place.
There will I believe start to be a vacuum created on the supply demand equation as the new millineum approaches. Any small deposit
with good numbers will be readily accepted and absorbed into the
market. I havent statiscally run the numbers., but I bet for example
out of that 110,000,000 annual production less than 10,000,000 carats accounts for upward of 90% value in a 6Bil industry. If the demand equation should soften as shown by DeBeers., it will hurt
the marginal value producers such as Orapa., which is in the Debswanna fold of DeBeers. DeBeers has no choice., they cant up
marketing in a soft demand enviroment. So who wins in the end.
DeBeers must maintain the cartel., to provide an umbrella for marketing their stones. This being the premise., then., any deposit
if rich enough with high gem quality and large stones should be readily
accepted in the enviroment as it exists today.
I would really like to research out the 30 or so existing pipes in production and detail the production from each as to life expectancy.,
current and future production., and see exactly where the model would be for future producers over the next five or six years. One
of my posts on Trumps 12 uses the Mining Week research. It gives
a pretty accurate picture in relationship to diamond oversupply in
relationship to price softening. Maybe we could compile a list of
production eminating from each country. such as
Country Pipes Production carats/ton dollars/carat
^^^^^^ ^^^^^ ^^^^^^^^^^^^^^^^^ ^^^^^^^^^^
Come up with total production., eminating from each country and
plug in the percentages. Then set up a model showing future production., and producers which will be phasing out production.
The mining week article provides some general numbers and references., but doesnt delineate production from each country.,
due to alluvialls., dykes., dredging., and pipe production. It would be
interesting to put some numbers down in black and white.
So once a week., someone could research Russia.,
the next week., we could do Botswana., another week., S. Africa.,
another week., brazil., and so on. It might be help people better understand the dynamics of the industry better.
Have to go for now.
Sincerely
George J. Tromp |
