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Gold/Mining/Energy : Canadian Rocket Red's Picks -- Ignore unavailable to you. Want to Upgrade?

To: Rocket Red who wrote (2426)	3/30/2002 8:23:23 PM
From: Rocket Red	Read Replies (1) \| Respond to of 19697

DJN -DJ CDNX FOCUS: Mkt Awaits Kensington’s Sask. Diamond Data By Lynne Olver Of DOW JONES NEWSWIRES VANCOUVER (Dow Jones) – A bullish analyst report is behind the recent skyrocketing share price of diamond explorer Kensington Resources Ltd. (V.KRT), company directors say. The company doesn’t expect to release diamond-recovery results and revenue modelling for the company’s Fort a la Corne project in central Saskatchewan for several more weeks. Victoria, B.C. based Kensington, a Tier 2 listing on the Canadian Venture Exchange, reached a 52-week high of C$2.27 Tuesday closing at C$2.15, up 61 Canadian cents or 40%, on volume of 1.8 million shares. It’s been one of the most active CDNX issues this week. The stock has fallen back a bit Wednesday morning to C$1.89. Kensington and De Beers Canada Exploration Inc. each own 42.25% of the Fort a la Corne diamond project. Uranium producer Cameco Corp. (CCJ) holds the remainder. Kensington has been promoting a lengthy report written last week by John Kaiser, a San Francisco-based analyst and publisher of Kaiser’s Bottom-Fishing Report. Kensington director Murray Tildesley told Dow Jones, “we have basically disseminated it to everyone we know...all of this information is public knowledge (but) he managed to bring it all together.” Kaiser’s March 22 report suggests that investors have overlooked the potential of the Saskatchewan diamond play as other diamond discoveries in Canada have grabbed the spotlight. “I believe that the Fort a la Corne project has world class potential and is a candidate for a US$1-US$2 billion ultimate project value.” Kaiser wrote. He also muses that Rio Tinto PLC (RTP), BHP Billiton Ltd. (BHP), De Beers or Aber Diamond Corp. (ABER) could be potential buyers of Kensington a year from now. The Fort a la Corne project is a massive collection of diamond-bearing kimberlites about 65 kilometers east of Prince Albert, Sask. Kimberlite is the most common host rock of diamonds. While the project’s diamonds haven’t been determined to be of commercial quantity, there’s such a huge volume of kimberlite – billions of metric tons – that the partners hope a low-cost, open-pit mine could be profitable. Data Have Yet To Be Modelled A year ago, Kensington said that, using De Beers’ proprietary method of revenue modelling, kimberlite body 141 – one of about 70 kimberlites on the property – could have an estimated grade of 18 carats per 100 tons and a per-carat value of about $150, for revenue of $28 to $33 per ton of kimberlite processed. Investors are waiting to hear whether the companies are still confident of those numbers, but it will be three to four weeks before Kensington publicly reports diamond-recovery results and revenue modelling from the 10-hole sample taken last autumn, president and chief executive David Stone told Dow Jones. Kensington has received partial data on eight of 10 holes, he said Tuesday. “They have to be modelled before they mean anything,” Stone said, adding that he would be “very happy” to see results similar to those from last year. As for Kensington being a potential takeover target, Stone said only that “it’s a good possibility but who would do it, I don’t know.” Last June, the company’s shareholders approved a shareholder rights plan. “The trading volume and increased value is being driven by expectations of confirmation of values, or slightly better values, that’s really the key,” said mining analyst Jim Mustard of Haywood Securities in Vancouver. The company’s previously estimated per-carat value of about $150 is high relative to values seen in other northern Canadian diamond projects, but that estimate was based on a very low stone count from kimberlite 141, Mustard noted. “It’s very difficult to have confidence in the numbers at this point and that’s what the sampling is about, it’s to reduce the margins of error,” Mustard said. Another company exploring for diamonds in the area, Saskatoon-based Shore Gold Inc. (V>SGF), has also seen it’s share price jump. Shore’s main focus is continued exploration and delineation of its Star kimberlite property in central Saskatchewan. Shore is up 22 Canadian cents, or 26% to C$1.07 Wednesday. Company Web Sites: kensington-resources.com,,, www.shoregold.com -Lynne Olver, Dow Jones Newswires, 604-669-1695, lynne.olver@dowjones.com (END) DOW JONES NEWS 03-27-02 12:00 PM End of News