Hello GS
If you don't mind I will respond here to your PM as I think the matter is appropriate for the open forum. As a quick aside, I agree.
On the broader matter, I hope you are right, but my gut says otherwise. My sense is that SUF was shaken to the core by the effect the loss of M-1 production had on the company, bringing it as near to bankruptcy as it did.
I believe the company's exploration risk taking bias has been submerged or put on the back burner for the time being in order to put as many of SUF's low cost of production, cash cow assets into producing status as possible. In effect, I believe management is prioritizing capital investment on the basis of where they can leverage immediate or near term low cost production, and/or distribute risk over as wide a geographic field as possible.
Sound business practice, but this strategy also appears to include going slow on the company's principal potential elephant blue-sky arena, the NWT.
No discovery here (in the NWT) could be expected to reasonably be put into production for a minimum of six years. Lets face it, payback even upon discovery of an economic pipe in Brazil could probably be realized in half that time and exploration there figuratively speaking requires little more than a great deal of drill analysis. Pipe and gravel resources are self-evident/obvious and there is little need initially to spend significantly on grass roots exploration until the entire existing inventory has been analyzed.
It has been suggested by some that I am arguing for a reversal of this policy. Again for those who have missed this point, I am not!
I am simply suggesting that for the sake of a modest $2million investment, the company need not, and can not afford to marginalize the NWT exploration program, which, on the face of current evidence, appears to be the case.
Our share price will recover faster and more significantly upon a NWT discovery, than upon another in any of SUF's other third world arenas/properties. History and the current obvious market preference for Canadian diamond assets has, and continues, to prove that. Increasing the company's cash flow and profitability is without doubt extremely important, but that will not result in immediate share price appreciation.
I am sorry DD, I may stand corrected, but I do not believe that .008c/t is economic grade, nor is .01c/t, even if the rough is averaging $100/c. Compare those numbers to the ones SUF and Hilton Ashton published on the marginally potentially profitable Camafuca pipe. I suspect that the company to which you refer had some public support of some kind to have survived 20 years in a nationalized economic environment, on the grades you published. Regardless, it is now out of business for which I am sure there is a valid financial reason, lack of profits. Recovering an 800c flawless pink diamond would be fantastic, but not if SUF has to mine and process 6.5million tonnes @ $20/tonne to do it.
Some have also suggested that despite investing in exploration here, SUF is not likely to find anything. The simple and obvious answer to that is, if it were true, why does SUF continue to do it every spring? The reality here is that it costs a great deal, it is unpleasant, and the season is typically very short between unbearable freezing/low day light conditions, and ice out/buggy conditions. There are no roads, no power and no obvious pipes sticking up in the air. However, the up side is that when you find an economic pipe, and roughly 1 in 12 are, it can range from $1,500,000,000 to $6,000,000,000 in value.
The market rewards such exploration success, quickly and significantly.
I am not arguing on behalf of Back Lake, as targets appear to be under deep lakes there which requires a spring drilling approach or a drilling barge. However, our Yamba Lake property has targets near shore and on land that can be drilled during the summer and therefore a discovery is possible now.
Finally, Peter, I can't speak for the voracity of Rhonda as their actions have not always matched their rhetoric in the past, but yes, there could be pipes between Lac de Grass and Kugluktuk, however, whether they are economic remains to be seen. In addition, some of Rhonda's properties are in the Churchill Province not the Slave and therefore are probably less likely to be diamondiferous as that province is off craton and has sustained significant errogenic(sp?) activity over the millennia. If you check, the aerial surveys conducted near Paulatuk by Darnley Bay Resources to the northwest also suggest that kimberlites might be present, but again, past geologic activity and their off craton location, makes the likelihood of economics open to question.
Thanks to all for the kind words. I think this has been one of the more interesting discussions we have had in a while.
Regards
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