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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: lbs1989 who wrote (20)	10/9/2001 10:58:39 AM
From: geoffb_si	Read Replies (1) \| Respond to of 39344

ibs1989: There are a few diamond stocks in the development stage like BAY/FGX. These are ABZ with a JV with RTZ on a mine in NWT of Canada. Production is expected to start in fall/winter of 2002. Anticipated cash flow, based on feasibility study, is 2.50-3.50/share. ABZ has raised all the money they need to get into production, thru PP, asset sale (Snap Lake) and debt. SUF is another diamond stock in development. They are developing Klipspringer in S. Africa (.10-.15/share cash-flow) and Camafuca in Angola (.10-.15/share cash-flow). However, their focus has shifted to PGMs; i.e., diamonds are not their primary asset. They just went into limited production on a PGM property (Messina) in S. Africa (20,000 oz PGM/yr). Next fall, they'll be producing 170,000 oz, with about 120,000 oz net to SUF; cash costs of US$150. The 5-yr plan is to increase production to 500,000 oz. (70% net to SUF). I don't own ABZ. I own SUF. If you can get SUF in the 2.25-2.50, I think it has great potential over the next 2 years because of the PGM property. If you have concern about investing in S. Africa, then you should carefully review SUF, as their main assets are in S. Africa (and Angola). Earnings are forecast to be $1/share in about 18 mos. I'm concerned about diamonds in the near-term, especially if we go into a recession. Marginal mines might be pressured to shut down or curtail production. But, ABZ will do well, because the economics of Diavik are extraordinary, and they have a sale agreement with Tiffany's. For a good discussion of ABZ, check the forum on Canada Stockwatch. Will Purcell has written a number of quality articles on ABZ. MPV is another developmental stock, in JV with De Beers. However, the economics are more marginal than ABZ, and De Beers doesn't move fast on their projects. I'm not aware of any other companies developing diamond properties, although I'm sure there are some. There are a plethora of explorers, but that will have to wait for another day... Geoff

To: lbs1989 who wrote (20)	10/9/2001 11:00:23 AM
From: jpthoma1	Read Replies (3) \| Respond to of 39344

BAY and FGX have well advanced projects with resources (or reserves) ready to be exploited. They were able to bring these projects to this stage with their own money and without much dilution. With diamonds, it is very difficult for a junior exploration company to be able to bring a diamond play to such an advanced stage. You need money, lot of money to explore and a lot more to develop diamonds plays and in today's markets, most of these juniors are not able to raise such huge amount without heavy dilution. Consequently, most of the discoveries are optionned or sold to majors and fall under their exploration timetable which is «quite different»!!! This is the reason why I look for grassroot plays like MAJ or TWG and get out of these plays as soon as I have reached the desired return on my investment in such plays (between 50 and 150% in a six month range, if successful, minus 50% or less if not!!!!!). For more advanced project, I am not sure you can have such returns over such a short period of time. All these words to say that don't know a lot of advanced diamond plays still held solely by juniors. Majors control most of them. The last «Diamond section» in the Northern Miner (Sept. 24) may be helpful for finding such projects. JP