Hello Artie
You are right to be cautious, and yes, TWG's reporting has frequently been less than crystal clear... no question, but "stink!"
I think that word offers a connotation that grossly miscaracterizes the facts.
Yes, clearer wording is needed, but I would confidently compare what TWG has and has reported with any diamond junior currently trumpeting its moose pasture.
There is risk, considerable risk, with junior miners, and trying to read through all of the data and information to arrive at an “informed decision” is certainly not easy. At best, it is an inexact science, and at worst, we are making guesses. Informed guesses… we all hope, but guesses none the less.
As I posted early on in my comments on this thread, if investors are looking for sure things, investing in diamond plays is not the place to put your money.
Having said that, in TWG for the past nine months, we have had more reliable information and data on which to base our investment (gambling) decisions than investors in ANY other junior diamond play at this stage of the exploration cycle.
I am sure I have looked at most, if not all of the same TWG information you have, and I certainly do not think Freight Train, nor Jackson Inlet “is dead” as you characterize it, not by a long shot!
I can’t speak to the accuracy of what the Northern Miner quotes Dr. Jago as saying, but this is what he is quoted as saying at TWG’s Toronto diamond showing:
Remarks by Dr. Bruce Jago, Manager Diamond Laboratory, Lakefield Research Limited
Individual diamond parcels were mechanically sieved into standard screen sizes and diamonds individually weighed, measured and described according to colour, clarity, percent preservation and morphological features.
Individual diamond parcels were recombined and hand sorted according to commercial diamond industry criteria viz. Sawable 1, Sawable 2, Makeable 1, Makeable 2, Clivage 1, Clivage 2 and Reject.
From the commercial viewpoint, a very high proportion (commonly 90%+) of the value of any diamond parcel lay in stones comprising Sawable 1, Sawable 2, Makeable 1 and Makeable 2 categories. Absolute stone values are applied according to colour, clarity, cut and carat weight.
Differences in the appearance of diamond parcels produced from different sampling sites on the same kimberlite intrusive are to be expected. These differences commonly result from the sampling of a number of different, separate intrusive phases that comprise the whole kimberlite body, each of which can have diamonds that are somewhat different from those recovered in adjacent phases.
Diamonds recovered from the six samples obtained from the Freightrain pipe share many physical characteristics but differ somewhat in the proportion of the Sawable, Makeable and Clivage. Thus far, sampling has not recovered any Bort, coated stones, reject or cubes. The principal difference in the character of these six diamond parcels and the two produced from sampling early in the summer of 2001 is the presence of Clivage. This category was absent in diamond parcels produced from the early summer sampling program, a feature that likely reflects the relatively small sample size (i.e. ~2 and 16 tonnes).
TWG Web Site - Slide 22
A cluster of Freightrain diamonds. Of note is the high quality of these sawables, they are white and transparent. The largest diamond measures more than 7mm and weighs 1.557 carat.
April 3, 2002 News Release
Twin Mining Corporation (“Twin Mining”) (TWG - TSE) is pleased to report on the findings of Diamond Trading N.V. of Antwerp, Belgium (web-site: www.diamondtradingnv.com) during their recent examination of Twin Mining's Jackson Inlet diamonds at Lakefield Research Limited.
The examination was performed on diamonds recovered from six mini-bulk samples ranging from 2.5 to 76.3 tonnes (869 diamonds +0.85mm, 46.208 carat; see press release of March 27, 2002) from the Freightrain pipe on Twin Mining's 100% owned Jackson Inlet property.
The entire parcel - all 869 diamonds (46.208 carats) were evaluated.
Mr. Daniel De Belder of Diamond Trading N.V. summarized the results of his examination as follows: "The quality profile of the diamonds of the present sample is consistent with the sample reported previously (see press release of July 18, 2001). Notable is the high colour and purity grading of the sawable and makeable stones and the absence of boart, rejection, cubes and coated.
As before, the better quality diamonds are rounded rather than angular, giving a high yield after polishing (recovery of polished as a percentage of rough).
Compared to the previous sample, larger, top quality diamonds are present and more small diamonds were recovered.
Noteworthy is the even distribution of the higher quality diamonds across the better size range, with a stronger bias in the larger sizes. (Conversely there is a bias to lower quality in the very small sizes, i.e smaller than .05ct)
In terms of value, the gem quality sawable and makeable diamonds represent 89% of total value."
Mr. Daniel De Belder is President of Diamond Trading N.V. of Antwerp, Belgium and a Member of the Diamond Exchange - Antwerp Diamond Club. Diamond Trading N.V. is a minority shareholder of Twin Mining Corporation.
TWG Web Site - Slide 24
We recovered an internally flawless 1-carat stone in only the second mini-bulk sample taken.
In short, 89% of this sample was classified Sawable or Makeable and only 11% was Clivage 1, Clivage 2 and Reject with reject being Boart! Further, the Sawable goods are tending to the larger stones and TWG has recovered at least one large “internally flawless” diamond. Do you have any idea how rare that is!? To cap it all, there appears to be every indication that “fancies” of good colour are present in remarkably high percentage… Freight Train “is dead!” I don’t think so Artie, not by a long shot.
TWG Web Site - Slide 8
Twin Mining's geophysical survey discovered a 30km corridor of 11 significant anomalies with 3 additional MAG anomalies approximately 20km south of it. These MAG anomalies are of significant size, mostly between 100 and 600 meters in diameter.
Not only is FT NOT DEAD, but Jackson Inlet still offers more real and significant mine potential than any other junior diamond play currently being blown up the market’s rectum.
TWG has an extraordinarily high % of larger Sawable goods of good to excellent colour, clarity and shape with what appears to be an extraordinarily high % of Fancies of size.
While it is still early days, I will now suggest to you that based on what I have read and seen these last two months, my guesstimate several months ago of the eventually established Freight Train pipe Average/Carat Value will prove to be low.
I now believe that the average per carrat value of FT will eventually be established considerably higher.
In light of some of the negative and unrealistic suggestions of FT’s potential of late, I think it worth making a modest comparison. I trust no Mavens are prepared to suggest that either DeBeers or SouthernEra are without some diamond mining expertise? Therefore I remind you of the data I posted a month or so back (available from DeBeers web site) of all of the mines they operate in the middle of no where, that have similar “modest” grades and in some cases similar or lower average carat values.
I also offer the following quotes from SUF’s web site:
Klipspringer
The feasibility study concluded for Klipspringer was based upon a mineable reserve of 3.6 million tones at an average recovered grade of 47 carats per hundred tones, valued at US $100 per carat. Total revenue over the projected 13 year project life is estimated at US $166 million. Pre-tax cash flow over the life of the project is forecast at R284 million (US $40.3 million) and after-tax net cash flow at R185 million (US $26.2 million). The internal rate of return for the project is 42.9%, and payback of initial capital is achieved in 1.5 years after full production begins.
Klipspringer is an underground mine working on a modest production rate on a dike no wider than your shoulders!
Camafuca
* Partners plan to extract approximately 6.1 million cubic metres of rock over a five-year period.
* Annual recovery projected at 220,000 carats of diamonds, valued at $117 (U.S.) per carat.
* Projected revenue during initial five-year phase - $40 million annually.
* Estimated operating cost - $10 (U.S.) per cubic foot.
* Projected net cash flow - $12 million annually.
* Projected capital cost of mine - $25 million.
* SUF share of proceeds - $4 million per year.
* Stated resource - 210 million cubic metres, grading 0.11 carat per cubic metre, or a total of 23.24 million carats worth an average of $109 (U.S.) per carat.
* Joint Venture Partners have now accepted a Phase 1 Feasibility Study for Camafuca.
Camafuca is an extremely low-grade pipe (much lower than FT) in the middle of a huge fast flowing river subject to flooding, to be mined by a floating dredge with a revolving diamond digging head and all in the middle of what was a war zone in a back water cesspool of a country offering dubious tenure assurance.
Please don’t suggest that FT can’t be mined even with its apparent modest grade. I feel confident it will prove to have much, much higher average per carat values than Camafuca or Klipspringer, mined at much higher volumes in a safe, law abiding country and with nearby ocean bulk freight access and a trained work force.
Judging by the volume and hovering share price, I can see that I have not been alone in accumulating TWG over the past few weeks and therefore more learned men than me have come to the same conclusion.
Regards
Vaughn |
