Thanks Grant for the posting., I think because RTZ is closest to the
Diavik project and has material information concerning the project.,
that the logical suitor in such a developement., would evolve as
Aber being a takeover target., consolidation of assets., maybe a buyout. Aber production would be pivotal to both DeBeers from a marketing standpoint as well as diamond production control.
Secondly., the real winner IMO would be Aber in such a move.
If BHP were a takeover target by RTZ., most future production in
the NWT would either be controlled by DeBeers or RTZ., either scenario., fair value would result in a bidding war for this swing asset
of Aber. The margins are exceptional in diamond mining relative to
gold.., and most production has been readily absorbed in the market
place., when it comes on line. So the quality players.,
DeBeers., RTZ would boost the bidding on Aber shares.
Most major hard asset producers view diamonds as an asset which
takes several years to bring on stream. When companies offer assets
trading well below NAV., it is easier and quicker to assimilate rather
than explore., if the major players view a future rising diamond market., the need to fill the void becomes even more apparent.
In a weak market share prices become attractive relative to NAV,
The first to appreciate in terms of market sentiment would be the
near term producers., And then again., other major Gold producers.,
are searching for high margin operations., which diamond mining offers., to boost lagging profits., so the door may open., how wide
is anyones guess.. since production schedules and world market
economics help formulate corporate decisions well in advance to
to fill potential demand., it makes perfect sense to search out proven
assets., trading below NAV. Now that the Russinas are back in the
fold with DeBeers., the cartel IMO has been strenghtened for the future. DeBeers would like to market Aber Diamonds., as well as any
other producer out the NWT or worldwide. The sun never sets on
their domain., and their political clout and long term relationships.,
developed over several decades., will remain a strong force into the
future.
What would be interesting is to plot all potential producers around the
world., and trickle down to the juniors involed., and their potential.,
and watch the big boys., maneuver in this weak market.
I suspect seeing DeBeers is a high production., low margin operator.,
small rich deposits such as Southernera., Winspear possibly., and
any other small company holding potentially high returns would fit well
into their corporate strategy. You look around the world., and every
major area concerning Diamond exploration is covered., starting from
Greenland., NWT,. S.Africa., Sierra Leone., yes DeBeers has a presence there as well. Algeria., Liberia., Nambia., and countless other areas of major production. So are they spread too thin., to justify
a 200 mill dollar marketing campaign., to their shareholders., they
have to build the high end of their market place., large stones deposits., with high margins.
Well., I rambled on enough for now., have to go., thanks again
for the posting Grant.
We will talk some more about this., when time permits.
Sincerely
George J. Tromp |
