Author: teevee --
Date:1999-02-22
09:46:57
Subject: Hey buddy, can
you spare a dime?
With respect to Aber's
diamond marketing and
financing options, I
somehow doubt that any
arrangements arrived at
will be mutually beneficial
or from neccesity as in
"enlightened self
interest"-DeBeer's grip on
the diamond market is still
firm. The playing field is
hardly level and to cite an
old adage: "money talks".
A recent example is the
takeover of Sutton by
ABX.....the bottom line is
that Sutton didn't have the
money, and couldn't raise
the money to develop their
deposit...... regards,
teevee
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Reply
Author: WillP --
Date:1999-02-22
10:13:34
Subject: Have Dime...Will
Travel
Money is money,
diamonds are
diamonds...and sure things
are sure things.
Aber has enough of the
first item to see it through
the first six months to a
year of building costs.
Most of those expenses
will be procuring and
transportation, after all.
By that stage...diamonds
being diamonds...the
financial world will see
permits in place, and a UK
multinational merrily
spending about $750
Canadian on building a
mine. (Not counting a
sizable hedge to account
for cost over-run, and the
already funded feasibility
studies. Also not counting
the recent change to the
mine plan that reduces the
dykes required initially.)
Of that portion...Aber
needs about $300 million.
Approximately one third of
that, they already have. At
that stage, item three kicks
in. Many banks have many
dimes...and a quick
resource loan for a sure
thing is not easy to find.
Cash flows freely to $300
per tonne ore in sufficient
quantity.
I can see a $200-250
million long term/short
term/equity deal here...in
any of a gazillion
combinations. I don't see it
as being a big deal.
I wonder who 'needs' who
more? Aber needs de
Beers, or vice versa. One
is eager for cash...one is
eager for diamonds.
But...as I said
before...interesting
argument, and one that
can't be refuted as nobody
knows. That's why
speculation is rife. :-)
Interesting argument...and
I'll turn it back in your
face. :-)
Where does Winspear get
the cash to develop a
$300 million (plus?)
project that would best
take advantage of your
cone-sheet (3-5000 tpd)?
Your point re Sutton and
Barrick is noted. That's a
reasonable possibility. The
'rumoured' split of Aber
can be seen by you
'rumour monger' types as
fuel for the argument. (I
don't use that term in a
negative connotation, by
the way! I always enjoy a
good theory or three. Sort
of like an Agatha Christie
novel.)
An alternative view
*could* be...that current
Aber management wishes
to divest itself of a sure
thing, and concentrate on
what it does best; diamond
exploration. In that
case...if the information
they are privy to as JV
partners is
favourable...then look out
Winspear.
Personally...I've seen just
about all. Accordingly, I
woudn't even hazard a
guess. We certainly live in
interesting times...and
that's not a curse, either.
:-)
Regards,
WillP
Top
Reply
Author: teevee --
Date:1999-02-22
10:43:52
Subject: Have Dime-Will
Mine
WillP,
<< Where does Winspear
get the cash to develop a
$300 million (plus?)
project that would best
take advantage of your
cone-sheet (3-5000
tpd)?>>>>>
A big diference between a
deposit like Snap Lake
and Diavik, is that if need
be, Winspear can start
small, even at a few
hundred tonnes per day
(I'm assuming value per
tonne stands up for the
sake of discussion). If I
shop around, I could
probably get you a
portable modular diamond
plant for about a million
bucks...how many would
you like? With an open
pittable resource to start
off with, and with high
margins, and given that
diamond plants are of a
modular design, over time
winspear could
incrementally increase
production and generate
the free cash flow to
grow.....hey I like that...it
rhymes....generate the free
cash flow to grow.....on
the other hand, if Snap
Lake is the cornucopia of
large white gems that we
all hope for, given that the
margins are higher on big
white stones and that the
price of and market for
"high end goods" doesn't
vary like the Indian goods
that Aber will produce by
the bucket full, I would
like to speculate/wishful
think/dream that a large
company may be
interested in taking
Winspear over, and
preferably two large
companies, as it takes at
least two bidding against
each other to get the best
possible price (ie.
Falconbridge versus Inco
for DFR). regards, teevee
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