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Gold/Mining/Energy : Canadian Diamond Play Cafi -- Ignore unavailable to you. Want to Upgrade?

To: james flannigan who wrote (2700)	3/15/2005 11:48:20 AM
From: WillP	Respond to of 16206

Will P, Do you imply that JK does not have a full understanding of micro diamond data? I have no idea what understanding analysts and newsletter writers have concerning diamond exploration. Gahcho Kue is a long way beyond microdiamond exploration. De Beers has populated its larger sieve sizes to make its modelling prognostications. It will be De Beers that writes the study, and De Beers will have no new data from any of the Gahcho Kue pipes to base its projections on. Any changes in value will come from changes in the diamond price, or in a less conservative approach. Both are possible, neither are certainties. Personally, I would be surprised if there was not an increase due to the hot rough diamond market. We have seen Ekati and Diavik exceed the FS of those projects by a wide margin. A wide margin? Not really. The Diavik diamonds were pegged at $79 per carat, and Rio Tinto is rumoured to be getting about $90. Much of that could be attributed to the increase in rough prices since 2000, no? Ekati had a similar increase, probably about 10 per cent attributable to production improvements. One may speculate that GK will do the same as the big stones may pop up more often during production. Yes, one may certainly speculate. I do, but I don't have any money riding on it. I don't think you'll get much serious speculation from any company mulling a takeover offer. It will come down to the feasibility numbers, will it not? Jk seems to think that Kelvin and Faraday may contain 10m extra tons with a 2+ ct grade.Debeers has not gone any further with exploration on these bodies as they would not even get mined until year 15 of the project. Those bodies are ill explored, but have promising diamond counts certainly. More drilling could prove some significant tonnages. Nevertheless, as you know, the net present value of something 15 years off is minimal, and often ascribed a value of nil. Kaiser has said that he thinks the GK project is another Ekati.Is he dreaming or does he see more than most others do? I don't know what Mr. Kaiser is thinking. I do know he was high on the project back as least as far as 1999. That is quite a speculation,if you don't understand the nature of diamond deposits,is it not? Well, it's quite a speculation either way. In 1998, Ekati listed a mining reserve of 66 million tonnes in the mine plan, grading 1.09 carats per tonne. That works out to over 70 million carats, then worth an average of $84 (U.S.) per carat. As well, there are several other pipes that will likely be fitted into the mine plan in the latter stages of its life. The conceptual mine plan for Gahcho Kue includes a resource of just 20 million tonnes, containing about 33 million carats, worth an average of about $68 (U.S.) per carat. If you're going to add the still hypothetical tonnages at Kennady and Faraday, then you have too give Ekati a boost as well. I think Gahcho Kue has enough merit without ascribing Ekatiesque proportions to it. I seem to think that he gets a little more information, or can read between the lines when he talks twice a week to Jan V. He thinks that the mine is a go with the recent comments by Debeers SA. I will be as surprised as you -- well maybe not you -- if Gahcho Kue fails to become a mine. You're drifting away from the original subject however, which was whether Aber (or anyone) would be interested in buying out Mountain Province. My position remains that the prefeasibility study will be vital to the ultimate disposition of the project, and the stake held by the minority partners. No amount of posturing or posting by any analysts, writers or investors will change what the engineers ultimately come up with. That's where speculation comes in. You think it's underrated as a project -- you buy in where you can. That would be Mountain Province or Camphor. Bankers and takeover candidates will rely more on the gory details of the study. What is your time frame as to when debeers would permit GK? Years, months,weeks or days? Assuming the FS data support the next phase. Well, I'll go with the words on De Beers's Web site: "If the project proceeds toward mine development, it is expected that permitting and stakeholder consultation will take a further three to four years, followed by three years for mine construction." Ignoring that De Beers was too optimistic with Snap Lake, that would put the Gahcho Kue timetable at mid-2005 for prefeasibility, early 2009 for permitting and stakeholder discussions, and early 2012 for production to commence. Actually, I just read that. I would have guessed shorter than that. The delay will serve to increase the interest charges accruing on the amounts that De Beers is paying on behalf of its partners. Maybe my $250-million crude guess was a tad low. Regards, WillP

To: james flannigan who wrote (2700)	3/16/2005 11:44:31 AM
From: VAUGHN	Read Replies (2) \| Respond to of 16206

Hello james Yellowknife gets a DB's newsletter circulated quarterly called the SnapShot which brings the NWT up to speed on progress and plans for the Snap Lake mine. Yesterday's Spring's issue contained a blurb on Gahcho Kue (Kennady Lake). You may be interested to know that apparently, up to 55 people will be on site this spring/summer and engineering work will include the extraction of a large diameter drilling sample during 2005's first quarter (presumably completed by the end of this month.) Work is well advanced on the engineering component, influenced by the area's environmental conditions, and Environmental baseline and Archeological work is ongoing with the project advancing to permitting later this year. With the above in mind it may be worth taking a look at where the market is likely to or should be moving MPV shares in the coming weeks. Allowing for the fact that TAH has lower value per tonne ore, a much smaller resource, is much further away from Yellowknife and will have to take on a load of debt, one might consider using TAH’s current $261m MC as a rough yardstick for where MPV ought to be valued about now. MPV has about 42.38m shares so extrapolating a rough upside the market should be reasonably assigning $6.15/s and based on MPV’s 44% of GK it should reasonably be assigning a floor of $2.70/s. Doing the same exercise with SGF’s $409m MC and considering the fact that Star has a much, much,… MUCH lower value per tonne ore, is further behind in the mine development process, and will have to take on a load of debt or give up a big % to be carried to production, extrapolating a rough upside, the market should now be reasonably assigning MPV $9.65/s and based on MPV’s 44% of GK it should reasonably be assigning a floor of $4.24/s. Which ever way you spin the numbers, based on what the market is assigning two inferior diamond plays/potential mines, logically, MPV shares should reasonably be trading at least 2x their current $2.15/s. The only difference I can see between where MPV shares currently trade and where SGF and TAH are trading, is the lack of MPV PR. So Mr. Kaiser et all aside, I would suggest that a little shareholder message to MPV management might be in order. I’m not sure if you or Frank spoke to same or to DB’s at the PDAC last week, but it would be interesting to know what was discussed with the public and what is intended over the next few months? Based on the above comparisons, the market quite obviously hasn’t discovered this bottom fish. I suspect, all that is required is a trigger such as the FS and more certainly, a little consistent press coverage and shareholder support from the PR department. Regards Vaughn