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Gold/Mining/Energy : Kensington Resources Ltd. (V.KRT) * Diamond in the rough! -- Ignore unavailable to you. Want to Upgrade?

To: Maher Sid-Ahmed who wrote (2306)	7/18/1998 12:49:00 AM
From: Norma Reid	Read Replies (1) \| Respond to of 5206

An article from Financial post Lusting for diamonds De Beers' iron grip on the world market is slipping. A beachhead has been established in Vancouver in a bid to capture some of the wealth of Canada's newborn diamond mines By PETER KENNEDY Vancouver Bureau The Financial Post In the old boys network that sits on top of the US$7-billion global diamond business, he is known simply as Uncle George. A 62-year-old Korean War veteran with the booming accent of an English cricket commentator, George Burne has spent four decades working for South African diamond industry giant De Beers Consolidated Mines Ltd. and its powerful marketing arm, the Central Selling Organization. A former gunner in the British Royal Artillery, Burne is now a De Beers director, representing the diamond cartel in Canada at a time when it is facing an unprecedented threat to its global dominance. Industry sources say De Beers' status as marketer of 70% of the world's rough diamond production is threatened by a deep slump in Asian diamond demand and the imminent startup of Canada's US$700-million Ekati mine in October. Located in the remote Lac de Gras area, 300 kilometres northeast of Yellowknife, Ekati is being developed by Dia Met Minerals Ltd. of Kelowna, B.C., and a Canadian subsidiary of Australian resource giant Broken Hill Pty. Co. Within the next three years, Aber Resources Ltd. and British partner Rio Tinto PLC. are expected to begin production at the US$590-million Diavik mine nearby. Industry experts estimate Diavik and Ekati will together produce about 12 million carats annually, or 10% of world production. So it is not surprising Burne is keen to portray De Beers as a friend of Canada's fledgling diamond industry. "We are trying to be as open and helpful as we can be,'' he said during a recent interview in De Beers Canada Corp.'s Vancouver offices. "We would like people to think of us as good partners.'' Analysts say the presence in Canada of such a senior De Beers executive is proof the impact of new production emerging from the Northwest Territories mine is being taken very seriously by management in Britain and South Africa. "Everybody knows George,'' says Martin Rapaport, a New York diamond consultant and publisher of monthly newsletter Rapaport Diamond Report. "His job is to convince the Canadian producers to sell their rough diamonds through De Beers' single channel marketing system.'' Projections show when both mines are in production, Ekati alone will represent 5.5% of the world's production of gem diamonds. With both mines on stream, Canada suddenly is set to become the world's fourth-largest producer, behind Botswana, Russia and South Africa. "That is quite a threat to a central organization like the CSO,'' says John Auston, chief executive of Ashton Mining of Canada Inc. in Vancouver. Ashton's parent, Ashton Mining Ltd., owns 40% of the Argyle mine in Australia, which two years ago ended its 10-year marketing arrangement with De Beers. Through a European sales organization, Ashton and its partner Rio Tinto are now marketing diamonds from Argyle, which last year produced 40.2 million carats of low grade rough stones. That represents 35% of global output. Auston says the relationship with De Beers ended because Argyle officials didn't feel they had enough involvement in the sale of their own diamonds. Having lost control of such a large supply source, De Beers faces the prospect of more uncontrolled production flooding the market once the Canadian mines are up and running. Burne admits De Beers does not want to see its market share eroded. "If there is another major discovery, we want to be part of it.'' While De Beers has been active in Canada for decades, lately through its Monopros Ltd. subsidiary, it was Dia Met chairman Chuck Fipke in 1991 and Aber in 1994 who found rich deposits in the Northwest Territories. Some say these discoveries are a source of embarrassment at De Beers. "We always thought there would be a resource here, but unfortunately we didn't discover it first,'' Burne says. Left behind in the Northwest Territories diamond rush, the company has tried to catch up by signing joint venture deals with Northwest Territories explorers such as Mountain Province Mining Inc., Ascot Resources Ltd. and Major General Resources Ltd. It is also exploring for diamonds in Alberta with Troymin Resources Ltd. and in Saskatchewan with Uranerz Exploration & Mining Ltd. and Kensington Resources Ltd. "We are surprised by the success Ashton Mining has had [exploring for diamonds in Alberta], but we are not sure that it will be a mining opportunity,'' Burne says. Outside of Canada, De Beers is exploring in Botswana with TNK Resources Inc. and, following a recent ownership dispute, De Beers also has a joint venture stake in the Klipspringer diamond project in South Africa with SouthernEra Resources Ltd. of Toronto. Meanwhile, Monopros is expanding its Toronto office, hiring 50 more employees and installing a laboratory that will analyze and process rock samples from its exploration projects in Canada. This strategy is expected to pay off if a Northwest Territories joint venture involving De Beers and Mountain Province turns out to be economically viable. Samples from Mountain Province's AK property, which is about 120 km southeast of Ekati and Diavik, have been shipped to Johannesburg for analysis. Depending on valuation results to be released in August, De Beers is expected to extract a large bulk sample from the property this winter that will help to decide if the AK project is viable. However, arranging joint venture deals with Canadian juniors is believed to be only part of the reason De Beers has opened an office here. Analysts say Burne's chief mandate is to control the flow of diamonds from Canada by arranging marketing deals with BHP, Rio Tinto and Aber. They say the big question facing De Beers is how much production from Ekati and Diavik will be channelled through the CSO. Burne insists De Beers is first and foremost a mining company, producing 50% of the world's gem diamonds (by value) from 18 mines in South Africa, Botswana, Namibia and Tanzania. Norma

To: Maher Sid-Ahmed who wrote (2306)	7/20/1998 10:02:00 AM
From: Michael Mc Donough	Read Replies (2) \| Respond to of 5206

Maher Panic selling tends not to show up on the ask...they generally just hit the bid prices.With the small volume trading I would not const- itute this as "panic" selling. With regards to the $20-30 price range...for this to happen you need things to progress faster than the current rate of speed... it has been done however, Aber in Oct 92 was trading at $1.50/ share and two years later it was almost $15...and Southernera was a $1.50 at that same time period and last year it was almost $21 Current depth 5000 .28 .29 2000 7000 .27 .38 12000 11000 .25 .40 2500 1000 .25 .60 5500 20000 .15 .61 5000 is it just me, or does there seem like a concerted effort to hold this price in the .30 cent range...come on who would be offering 2000 shares at .29 MM