The royal couple and the diamonds
Mysterious princess pulled jewel out of glacial muck, sparking dreams of riches in Ontario's Eldorado
HER HIGHNESS, Princess Emilia Claudia di Portanova Cismaru von Anhalt, is tearing across the 401 at 140, no, 150, giving rise to the possibility that the silver BMW X5 she is commanding, which feels as though it is levitating above the highway, is about to mount the rear end of the white Lincoln Town Car in front of her.
She's wearing a striped Ralph Lauren shirt, khaki riding pants and a mustard coloured ball cap, on top of which are perched her Gucci sunglasses. Her watch is diamond encrusted and fits snugly about her wrist with a pink leather strap. A knuckle duster diamond ring adorns her wedding finger.
In addition to driving like Mario Andretti, the princess has a handshake that could crack a walnut.
On this day's adventure, the princess will steer the all-terrain Beemer under a prairie-blue sky, north on Highway 62 past Ivanhoe and Madoc, and, fittingly, Eldorado, to the remote and densely wooded property where four years ago in the dead of winter she says she found a 9.346-carat octahedron cape yellow diamond after sifting the surface earth taken from the area surrounding what she calls "The Big Tree." She tucked the peanut-sized discovery in her pocket, showing it for the longest time to no one but her husband, the prince. "I knew it was a diamond," says the princess. "There was no doubt about it. The world was mine."
The royal couple headed to New York to celebrate. They stayed in the Astor Suite at The Plaza and dined at Le Cirque.
Soon enough, the prince and princess were ensconced in living quarters at Palace Pier Court, from which they ran a private company called Lydia Consolidated Diamond Mines of Canada. Hundreds of regular folk, people like Ralph the Butcher, in Norwood, and Sandy and Norah McDonald from Oshawa, invested thousands, tens of thousands, and hundreds of thousands of dollars in the von Anhalts' diamond exploration enterprise. In fact, the von Anhalts sold shares to hundreds more investors than they were allowed to. The princess says they didn't know any better. The broad base of investors, and the company's shoebox accounting methodology, drew the interest of the Ontario Securities Commission, which has drawn the prince and the princess into the spotlight via a commission hearing set to resume in the fall.
In the meantime, the princess has had to suffer the ignominy of having her shopping habits at Saks and Hermès scrutinized. The entertainment value of the OSC proceedings was considerably enhanced by the commission's assertion that the company used a "psychic" to help in the diamond hunt.
None of this sits very well with the princess. "I was very insulted by that and very offended because it's so not so."
From Stouffville to Sunderland to Port Perry, investors remain steadfast in their support of Lydia and its titled leaders. "I really do believe they've got what they say they've got up there," says Norah McDonald, who has connected Lydia with family investors in the U.K. and who has been distressed to see the diamond explorationist portrayed as a "lampoon company." Ralph the Butcher, who makes 315 kinds of sausages, including, today, strawberry with Oktoberfest flavouring, has visited the property more than once. "Every time I go up, I see progress," he says. He witnessed what he calls "the big blast," in which a whack of dynamite sent rocks flying over the canopy of the forest. Ralph won't disclose the sum total of his investment. "I figured, well, it's an expensive lottery ticket but some day it might come in."
Fran Harvie, the seer and spiritual consultant who was mocked by the OSC for using dowsing rods to assist in the diamond hunt, is "absolutely, absolutely" convinced of the property's fortuned future. "The project is the awakening of humanity," she says. "I told them, if they pull out a blue diamond, I've got a name for them. You've heard of the Hope diamond? This one is the Faith diamond. This project has been a journey of faith."
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Prince and Princess von Anhalt are sitting in their corporate offices, which are elegantly appointed. The princess favours well-cut business suits, silk scarves and, today, pink alligator-print shoes. Prince Jürgen von Anhalt is dressed in his summer sockless workaday attire of open-necked Hawaiian shirt and plain shorts. The princess is the face of the corporate entity. The prince, charmingly eccentric and outspoken, is kept under wraps. His lawyers have advised him not to attend the OSC proceedings.
The princess is something of a mystery. "I was born in Torino," she says of her Italian birthplace, April 1, 1968. Her accent doesn't fit the heritage, sounding more Eastern European. Her passport lists her birthplace as Magureni, Romania. Subsequently, the princess explains it this way. "When my mother had travelled she had me ... and came back to Italy so when I was born I was born ... on the way from Hungary back into Italy."
She says she was born to a woman whose maiden name was di Portanova Cismaru, who was married, but whose husband was not Emilia's father. "I was raised by my grandparents. I never met my father." She very rarely saw her mother, who is now deceased.
Lydia Diamond's corporate literature says she attended Mt. Saint Sebastian, a boarding school in Lausanne, Switzerland. "It was a terrible life," says the prince. "They pushed her away to Switzerland for years and years. And when parents in Europe came for the birthday of a child, or for Christmas, no one came to see her. She went into the forest to cry." Says the princess: "It's just such a long nightmare."
There is, however, no record of any such school. "It doesn't exist anymore," says the princess in a subsequent interview. "Well it does exist. It changed its name. It's a very small school for problem children." She's not sure what it's called today. "It just moved slightly." How was she a problem child? "I lived on chocolate for many years. I was addicted to chocolate. First time I went to kindergarten I was very jealous of a boy I didn't like and bit his finger ... and they didn't allow me to go back to the kindergarten (in Torino)." According to the corporate Web site, the princess was awarded an international baccalaureate at Mt. Saint Sebastian.
She says that she fled to Canada at the age of 19 in order to escape an arranged marriage to the son of a Swiss family — "They were in pharmaceuticals." She worked for a time at Bitove Corp., where they called her "Countess," and then at the National Film Board, where they called her "Zsa Zsa," nicknames arising from her bearing, which is regal, her accent, which is heavy, and her reportedly stunning appearance at the time. "She was dressed to the nines," says one former co-worker.
While her stay at the NFB was brief, she is remembered by many staffers. "I was uncomfortable with her," says Ed Barreveld, a documentary film producer who was head of administration and finance at the NFB when Emilia worked there in the mid-'90s. "There was something about her demeanour that didn't ring true to me. I was particularly concerned one day when she offered to write the company cheques for me." Was she smart? "No doubt about it. I think she was bored."
More than one former staff member recalls Emilia borrowing money, which she did not pay back. This, she confirms. "I think Jürgen's office manager sent a cheque back while I was in Europe. ... I'm not sure what happened actually afterwards." In February, 1994, she travelled to Nassau with a girlfriend. They were travelling on the cheap, she recalls, a circumstance that drew them to the Meridien hotel for the free appetizers. It was there that she took note of a dashing, tanned gentleman standing at the bar. "I told my girlfriend, I'm going to marry this guy."
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`I said those Canadians are gamblers. I love them. Oh, they go into mining stocks.'
Jürgen,
Prince von Anhalt
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The "guy" was Jürgen, Prince von Anhalt, Duke of Saxony, Count of Ascania. The titles were penniless, but the prince had been possessed of astonishing good looks in his youth, which then were just starting to fade, and a clear savoir-faire which carried the aroma of wealth.
"So I stood up and said, `Hello, my name is Emilia di Portanova. Would you like to come gambling with me?'" The prince's response, which in the retelling echoes a 1940s movie script, went something like this: "Darling, gambling is for idiots. I never gamble. I'd love to invite you and your girlfriend for dinner."
And so they dined at Androsia Steak & Seafood Restaurant. Betty von Hamm owns the Androsia with her husband, Siegfried. "He was dashing. Good looking. Stunning. Jolly. He's the man. He's every woman's dream, I think." He had been married three times.
Von Hamm says the prince had an office above the restaurant, but she never knew what he did there. He had achieved a degree of fame, earlier, for his "Jet Art."
Von Anhalt's artistic method entailed heaving buckets of paint in front of a jet engine blast, which would thus explode the paint on to an awaiting canvas. "It was a kind of marriage between a Jackson Pollock drip painting and the kind of stained canvas that Helen Frankenthaler put together," says Bruce Helander, who hosted a van Anhalt exhibit at his Palm Beach gallery in April, 1983. "He came into town with a lot of pizzazz and I think people felt he had an interesting perspective on life, and in Palm Beach I think that counts for something," says Helander. "In Palm Beach, anyone who comes from a foreign country or implies he might be a prince or a baron or whatever, it's a thing here, you know."
The paintings did sell — in Helander's recollection, they sold in the $10,000-$15,000 (U.S.) range. But, says Helander, "There was never really a market created for them" beyond the initial buzz. Currently, four of the prince's works are available online via Hawaiian-based Art-Broker LLC, asking $5,000 apiece.
The prince says he made millions on his art. The princess says that when they met, her husband-to-be was a one-third owner of an island called Devil's Cay, which she says was sold at a substantial profit.
Dr. Michael Ingraham says that prior to Emilia's arrival on the Nassau scene, he and the prince were attempting to launch a holistic spa-clinic in the area. "He claimed he had some relative who had all these fancy herbal cures, but he would never share them in detail," says Ingraham. Von Anhalt told Ingraham that financing was being teed up through a wealthy West Palm Beach socialite. "It never came to pass," he says. "He was a little too slick to be true." He recalls that Emilia was being introduced as the daughter of someone wealthy, from the Eastern Bloc.
While there were no clear financial means, the von Anhalts describe their courtship as a grand, glittering affair. "He had a nice penthouse on Cable Beach" in the Nassau Beach Hotel, says the princess. "He said let's invite everybody for drinks. I said na na na na, I come, they stay. We were married two weeks afterward."
It probably needn't be said that Princess Emilia von Anhalt did not return to the NFB. Nor did she claim any of her belongings left behind in her Toronto apartment. She speaks of Lyford Cay parties hosted by the Bacardis, dinner at Graycliff, of sugar heirs and baronesses. She told her husband-to-be that she was a niece of Baron Ricky di Portanova, who then was still hosting parties at his 28-bedroom Acapulco mansion, Arabesque.
(The mention of anyone famous often sends the prince on a tangential excursion: "Beyond belief, his estate, beyond belief. One of the Bond movies was filmed there. Totally spectacular. Sit-down dinners for three, four, 500 people. Ricky built his own discotheque. I've never seen anything like it. On the Bay of Acapulco. Why do I tell you this?")
The princess swiftly became pregnant and the two, rather inexplicably, began to live a peripatetic existence. They say they went to Panama, and that "some government people" said, "Take a trip, go to Brazil and see how you like it there." From Brazil they went to Europe and while staying in the royal suite of some Viennese Hotel decided to travel to Toronto.
Now, to be fair, it's hard to parse one's own life for an interviewer. Shortcuts logically must be taken. Still, no sooner do the prince and princess land in Toronto than they're renting a house on Blezard Line, 40 kilometres east of Peterborough, far away from anywhere and light-years removed from any of the social scene that the prince craves. And they're getting a dog from the humane society and the princess's pregnancy is swelling and the prince is saying he'd like to buy a gold mine.
And there's no gold mine in operation, let alone one for sale (the region did produce small amounts of gold way back when), so they swaddle the baby in furs and the prince suits up with bow and arrows ("I heard in Canada they had some wolves in the area and maybe some bears and God knows what") and they go prospecting. And on Christmas Eve the princess falls into Wolf Lake, "And I started crying, right in the middle of the lake."
They said they tried to raise financing from the Swarovski family, of crystal figurine fame, but were told they were crazy. So they bought a Suzuki jeep and started dynamiting, and set up day camp in tents purchased from Canadian Tire. They say their exploration efforts were financed by the prince, who can be seen in photographs shaking till and sand through a cooking sieve into a bucket, as the couple's daughter, Lydia, sits nearby in her stroller.
It was Emilia, conducting this same painstaking process, who found two diamonds that are kept in the corporate offices on King St., including the 9.346-carat cape yellow.
To listen to the prince, the princess, their seer and their supporters, news of the discovery spread by word of mouth. From small gatherings at Fitzrichard's pub in Oshawa, the royal couple soon found themselves speaking to gatherings of more than 100 at places like Trillium Trails in the same city.
Says the princess: "I was amazed to find out people invested in a lot of exploration." The prince puts it even more enthusiastically: "I said those Canadians are gamblers. I love them. Oh, they go into mining stocks. It's amazing. The little butcher. I made friends with the butcher. The sausage are fantastic. Those Canadians are fantastic gamblers. I said to Emilia, I love them, I love them."
The list of investors grew into the hundreds. As a private company, Lydia was bound to keep its shareholder list capped at 50. The principals say now that they were wrongly advised, that they understood that innumerable investors could be brought on board provided that the shares were held in trust, as they were in this case, by Fran Harvie.
Perhaps no one would have been the wiser were it not for a woman named Kathy Derry, who used to work at Fitzrichard's. In February, 2000, Derry's common-law husband invested $1,000 in Lydia. The two quickly became disenchanted. "Every week we were told, `It's going to the market. It's going to the market,'" recalls Derry. The hope held out to investors, she says, was that once Lydia shares became fully traded, the share price would rise exponentially. Derry claims that investors were exhorted to jump in with haste. "We had to get in quick because they weren't going to be selling any more (shares)," she says.
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`I lived on chocolate for many years. I was addicted to chocolate.'
Emilia
Princess von Anhalt
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The following summer, with nothing happening on the public listing front, Derry called the OSC and lodged a complaint. Two things happened. One, the commission opened up an investigation file on the company. And two, Lydia sought a new corporate structure, amalgamating in May, 2001, with Acadia Minerals Corp. to become Lydia Diamond Exploration of Canada Ltd. The company trades on the Canadian Unlisted Board Inc. and is no longer bound by the private company strictures. The prince and princess each hold 23.3 million shares, for 77 per cent of the shares outstanding.
The Ontario Securities Commission announced nevertheless that it would be hauling the prince, the princess and the psychic before a hearing to address the earlier transgressions.
The proceedings in no way bar the company from raising financing via private placements. Securities filings show that in March, Lydia raised $335,000. In April, a further $535,000 was raised. The princess says that pending the closing of two financings expected yesterday, the total funds raised this year will reach $1.65 million. She is pondering pushing ahead with a TSX application.
Back at the Androsia restaurant in Nassau, the regulars have heard that the prince and princess are scouting for diamonds. Betty von Hamm knows of no one who has invested down there. "People wouldn't invest unless they put their hands on it," she says. "We, as Bahamians, we don't invest in things unless we can put our hands on it."
Says Dr. Michael Ingraham: "I'd be very careful."
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The princess is marching in the woods, snapping a good strong branch to make a walking stick. Three weeks earlier, the OSC ordered that Fran Harvie, having engaged in the illegal distribution of shares, be barred from trading in securities for a period of five years and be barred from acting as an officer or director of a company for the same period of time. Given that Fran Harvie has never been a registered representative and has never held the position of either officer or director of a company, the order isn't going to affect her life much. "I was aware I had the gift at the age of 3," she says of the spiritual counselling that has reconsumed her waking hours.
The princess's own appearance before the commission on behalf of herself and her husband likely won't take place until the fall. The von Anhalts, the commission alleges, also illegally distributed shares. Additionally, commission investigator Stephanie Collins has drilled down into the von Anhalts' bookkeeping to reach the conclusion that investor proceeds meant to go into the ground instead went to, among others, Versace ($1,082.15 on Feb. 28, 2000) and Jewelry by Maurice ($3,852.80 on April 19, 2000). The von Anhalts say any personal expenditures charged against the company accounts did not exceed personal loans made by them to Lydia in the first place.
In the hearing hiatus, the princess is willing to show a visitor around the Lydia prospect. She seems eager to meet the hired help, some of whom are wearing hard hats, and one of which is in need of some cash to get back up to the Kirkland Lake lockup for the weekend. "I've been to hell and back, Emilia," he says. She appears to be genuinely interested.
The work crew is genuinely searching for diamonds. The geological area around Peterborough is not without interest. There have been small amounts of gold mined in the region in years gone by. Intriguingly, in 1920 a 33-carat diamond was found by, not a prospector, but a worker digging a railway cut. The whereabouts today of the Peterborough diamond are unknown.
But where oh where did that diamond originate?
Diamonds are found in kimberlite pipes, carrot-shaped funnels that explode with volcanic force through the earth's surface. Diamond-bearing kimberlite pipes are, of course, well known in Africa and Russia, to a lesser degree in Australia and most recently in the previously unimagined locale of the Northwest Territories.
The area here being trod by the princess is located, geologically, in what's known as the Grenville Zone, which has never proved a mineral bounty. No one has yet proved that the right geological events happened here for there to be diamonds.
Three years ago, geologist Jeremy Brett signed on with the Lydia team. He believes that the geological pieces of the diamond puzzle are falling into place. His team had found the so-called "indicator minerals" that can signal the presence of a diamond-bearing pipe: chrome diopsides and pyrope garnets are the most familiar, sparkling in fabulous shades of red and green. But the diopsides and garnets are glacial travellers, as are diamonds themselves. Did they travel here across the earth's surface, or explode to the surface from tens of kilometres below? Brett believes the source is here, and asserts that the diposides can't travel far afield without breaking down.
Brett points to the indicator minerals, coupled with a recent seismic lithoprobe that identified a slice of archaean crust running 80 kilometres beneath the surface of the property, to support his increasingly optimistic view. "I think there's kimberlite here," he says. "We're going to exhaust every tool to locate it." Micro-diamonds have additionally been recovered from surface rock on the property. What does it mean? Possibly something. Probably nothing.
There was a kimberlite pipe located south of Belleville near Picton, but that proved barren. Lydia's very keen team of investors has been buoyed by the continued examination of De Beers' Victor Pipe, which is diamondiferous. But that's an utterly different geological structure, in the James Bay lowlands. Still, Brett argues that there's "no reason" why a diamond-bearing kimberlite pipe cannot intrude the Grenville.
At its annual meeting in June, the same day of Fran Harvie's settlement hearing, Princess von Anhalt introduced a new Lydia board of directors, including an independent committee meant to ensure that the firm's previous loosey-goosey manner has been fixed for good and to protect the interests of the minority shareholders. On that committee sits Alexander Sennecke, a lawyer at Lang, Michener, and David Jolley, past president of Torstar Corp. and former publisher of this newspaper. Why did Jolley join such an outfit? "The thought that there may be diamonds so close to Toronto appealed to me," he says.
Jolley has joined the mine site walkabout, his first visit. He smokes a cigar and appears to revel in the geological discussions. He laughs when asked the obvious question: how does he know that the cape yellow diamond, which is, after all, the reason for us all being here, actually came from the property? "That's a fair question. I think at the beginning you have to trust the people you listen to. You're reliant on the people involved in the project to tell you squarely the way things are."
The princess has said more than once in our interviews that she didn't know it was so unusual to find diamonds in the till. Still, this is geology, and stranger things have happened. The conclusions of the geological investigation here are unknown.
The near-term financial future of Lydia is more certain. The prince and princess are preparing for a September trip to Europe. They will have their daughter baptized in a monastery in the Alps. In Munich, they will meet with potential investors. "We have one guy committed for $1 million," says the princess. How much does she hope to raise in total?
"My number is something like $1.5, $1.6 million." They had hoped to have the meddlesome OSC proceedings concluded by then. That won't happen. No matter. It still promises to be a hell of a show. |
