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

To: jrhana who wrote (13638)	7/9/2003 1:29:19 AM
From: The Vet	Read Replies (1) \| Respond to of 39344

Diamond mines are very hard to find but extremely valuable once found I agree with the first part, but having been an early investor in Aber and later in MPV I don't think the market agrees with the second statement. Both companies have found diamonds in quantity and MPV languishes hobbled to a deal they did with De Beers which keeps them forever a bridesmaid. Aber managed to retain a 40% interest in Diavik, which appears to be the most profitable diamond bearing ore ever discovered. The mine is built and producing earlier than planned and under budget. There are no operating problems, diamonds are being sold, production is ramping up, but ABER is lucky to trade 1000 shares a day on NASDAQ and rarely more than 50k on the TSE as ABZ. This is a state of the art multi billion dollar mine with the highest value diamond kimberlite ore being mined and operated by Rio Tinto a large and experienced miner. Yet there is almost no interest in the stock. Never has been! Even though they could easily earn $4 to $7 a share once production ramps up to design capacity it languishes at around $18 to $20 a share and it's almost impossible to buy or sell more than a few hundred at a time on the market. The few analysts who follow it have been wildly pessimistic on earnings forecasts and Diavik's first production quarter (which was mining overburden and "Waste" before getting into the real ore body) and where analysts predictions were for a 5 cent loss, turned in a healthy 14 cents a share. Even with that surprise the share price dropped! Diamonds may be a girls best friend, but US investors certainly don't like them even though they have a direct US marketing channel already set up through Tiffanys who have taken a major position in ABER! aber.ca

To: jrhana who wrote (13638)	7/10/2003 5:13:55 PM
From: The Vet	Read Replies (2) \| Respond to of 39344

A little more on Canadian Diamonds. idexonline.com DDMI Supplying First Diavik Goods (July 8, '03, 14:24 Edahn Golan) Rio Tinto’s Diavik Diamond Mines Inc. (DDMI) is supplying an allocation of rough diamonds to the four manufacturing facilities in Yellowknife that have received approval from the Government of the Northwest Territories under its Framework Policy on Support for Diamond Manufacturing. Rio Tinto Diamonds N.V., DDMI's sister company and sales agent, will allocate rough diamonds from the Diavik diamond mine to Arslanian Cutting Works NWT Ltd., Sirius Diamonds Ltd./E. Schreiber, Canada Dene Diamonds Inc., and Laurelton Diamonds Inc. Laurelton is a subsidiary of Tiffany & Co. that has recently opened a Canadian rough diamond processing plant in Yellowknife. The quantity of goods being offered to northern manufacturers out of DDMI's share of production from the Diavik mine represents 10 percent of the total available for sale in July. First Rio Tinto Sight of Diavik Goods Held This Week in Antwerp (July 9, '03, 18:40 Edahn Golan) The first goods from the Diavik mine offered by Rio Tinto were sold this week in Antwerp to a select group of diamantaires constituting it’s first such ‘Sight’. The goods offered are similar to the gems from the Ekati mine, and were reportedly strongly priced. Production at what is dubbed ‘Canada’s seconded mine’ is not yet up to speed, and it is believed that at least in the near future Rio Tinto will not hold a sight every month, in order to offer a certain minimum each time. At full capacity Diavik is expected to yield $31 million worth of diamonds per month at an average of $62/carat, while gross estimate of this sight is that it’s only around $15 million. Assortments to customers were tailor made for each customer, generally broken down to good, poor and wide range assortments. No run-of-mine assortments were offered to customers. The list of buyers was apparently based on the Argyle list of customers with a small addition of a few new names. Premiums on rough on the market are still high despite the added goods, out of tune with the polished market and without any clear and visible reason. Now if you do a few sums, then DDMI will be offering $31 million worth of diamonds a month (representing 90% of their share of production) to Antwerp and 10% of production to local firms. They are entitled to 60% of the diamonds produced and Aber gets 40%. So DDMI's 60% share would be worth $34 million a month, and Aber's 40% worth around $23 million. Assuming 12 months in a year that's $275 million for Aber with just over 50m shares gives earnings of $5.50 a share.... a P/E of under 4! And this figure is derived from the buyers figures not the company's...