Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: Peter Bourgeois who wrote (2039)	9/24/1998 5:43:00 PM
From: Valuepro	Read Replies (2) \| Respond to of 7235

Hi, Vaughn. Glad to hear you're o.k.. ...thought you might be ill, or something. Following is a summary of a few thoughts I've had in the last couple of days concerning SUF and a possible pending washout in diamond stocks. Please accept this as personal conjecture offered for discussion purposes. We can only gain by sharing such observations and I am open other thoughs/arguemnts along these lines. Financial markets give cause for concern and today's news about a Federal Reserve coordinated ninety-to-one hundred billion US dollar bailout of Long Term Credit Management adds to monetary fears. The cloud I see for diamond stocks is a general market concern over lower product demand in the face of a potential worldwide deflation. If things get very bad, diamond stocks may not be the place to store wealth. However, the net project income to SUF from the joint venture activity on the M-1 pipe is now returning better than $525,000 per day. While this should fall after October when the efforts get into primary kimberlite, we should still expect the net cash flow to be within $200,000 to $250,000, or more, per day. All of the company's other projects in Africa are also low cost, high yield operations. But... 1) With a lowering of demand for diamonds, prices will fall causing higher cost projects and many exploration ventures to be suspended or closed; 2) A few low cost operator's like SUF will be able to survive a serious downturn in the market because diamond prices would have to reach near give away prices before operating profits are lost; 3) Properly weathering such a market will allow SUF to emerge larger and stronger when prices turn up as they will have accumulated cash reserves to buy, at very low cost, projects folded by other companies (and perhaps even those liquidated in bankruptcies); 4) SUF's stock price may decline in the coming months if the international financial crisis gets worse. If so, the stock might be worth accumulating at lower prices given, I believe, they will survive to become a much larger and more valuable company when economic conditions improve; 5) I believe SUF has some exploration possibilities in gold which they've not given any attention because their primary focus is diamonds. Should the diamond market tank, I believe the gold market will go the other direction giving SUF the opportunity to exploit this option. In summary, I expect SUF to survive any serious market upheaval as diamond demand will not fall to zero. Their costs at various projects are not more than US$25.00 per ton (M-1 cost share is US$8.00 per ton) meaning yields of 1-to-3 carats per ton will provide net cash flows down to stone values of US$25 and less. By contrast, if we see any serious decline in diamond-related share & stone prices in the coming months, other company (i.e. Ashton, Mountain Province, etc.) exploration and pre feasibility projects in Canada may not survive. VP

To: Peter Bourgeois who wrote (2039)	9/26/1998 7:32:00 PM
From: VAUGHN	Read Replies (1) \| Respond to of 7235

Hello Peter Crystals can be formed from numerous minerals from gypsum, which is extremely soft to carbon (diamond) which is of course the hardest of all known substances. There are I believe more than fifty known forms of mineral crystals Peter, any one of which could be the type located on the site your refer to. An analysis by a professional gemologist could probably determine the mineral which you have found locally, but I doubt very much that you will find any relationship between the source of say quartz crystals or sapphires and diamonds. They are found in very different host rock and exhibit quite different crystal growth structures, cleavage, inclusions, colours and ease of abrasion (hardness). I believe you have mentioned that you live in Halifax, which is off any craton that I am aware of. That would make finding diamonds very unlikely in your local unless transported by glaciers say from northern Quebec or Labrador where a large craton can be found and Monopros is looking at ground. Quartz crystal can be found in numerous types of rock but is typically associated with silica intrusion (quartz veins) and vuggy volcanic deposits which might for example produce what are known as Thunder Eggs in the Snake River Valley of western Washington or Mexico. Sapphire can be sourced either from Pegmatite (typically found in granites) and basalt (an ultrabasic rock remotely related to kimberlite). Having said that, a field crew from the University of Western Ontario has found micro-diamonds in a basaltic dyke in the Keewatin Region of the Northwest Territories I believe. There has not to my knowledge been a satisfactory theory proposed to explain that occurrence, but presumably the basalt sampled the mantle at 150km or so and explosively erupted and cooled before the diamonds could be reabsorbed. This defies basalt emplacement theory as I understand it, but obviously the theory does not cover all the bases. Regardless, some crystals (quartz, gypsum, sapphire, emerald, amethyst, etc.) grow as a result of minerals coming out of solution (water) under the right temperature, chemical and reducing pressure conditions. Diamond uniquely, is believed to form as the result of carbon being subjected to the extreme application of heat and pressure, (not as a dissolved mineral coming out of solution). There are numerous articles available on the subject and I would recommend that you look up back issues of magazines such as Gems & Minerals. The authors of many of these articles are renowned in their fields and can provide a far more accurate and scientific explanation than I could hope to. Bottom line Peter is that I very much doubt that digging any deeper will produce kimberlite with diamonds if diggers are finding quartz crystals on surface. It could be fun to try though. Regards