Hi,
Here is my perspective on a fundamental development in the diamond business:
1. Historically, the biggest headache Be Beers had during the first century of their cartel, was the unrivaled quality of diamond from the Russian Mir pipe. The yellow tinted capes from SA could not match the brilliant white to blue-white of the Mir diamond. Buyers like Birk's recognized that DeBeers downgraded their diamond grading system, and as a result, started buying Russian diamond for the superior quality. In order to prevent more defections, DeBeers blacklisted Birk's from sites. This was the message that kept most other buyers and cutters etc. in line, as they did not dare risk being shut out of the market, not knowing at that time how stable and long term the Russian supply was. It has taken over 40 years, but Mir is shut down and the stock piles appear to be absorbed.
2. A recent discovery in Northern Canada by a little known company called Winspear (WSP on the VSE and soon to be listed on the TSE) has made a discovery with diamond that appears to rival Mir Quality. IMO, the potential tonnage is also greater than 50 Million tonnes. The grade and diamond size distribution also appears to be very favorable. At a production rate of 5000 tonnes per day, this company could produce up to 10% of the highest quality diamond over 1 carat in size in the world, for up to a century.
3. IMO, what are the implications? Should De Beers buy out this company, I believe the cartel could be restored to its former glory, and secure and asure its success for the next century. Why you ask? Because no competitors could match the quality with a few diamonds from Winspears deposit included in each CSO site package. Also, this would likely discourage and dampen enthusiasm for diamond exploration by competitors.
4. Conclusion: IMO, WSP is the number one junior diamond explorer to own at this time. |
