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Gold/Mining/Energy : DIAMONDWORKS DMW.v -- Ignore unavailable to you. Want to Upgrade?

To: Chas. who wrote (120)	12/24/1998 11:29:00 AM
From: Kevin Hamlin	Respond to of 413

Just thinking about it "getting worse". I don't think the market has factored in at all (at this price) the idea that the mine will be reopened any time soon. Walsham is suggesting by the end of January and if the market starts to respond to this thought, there will be a strong upside. Now what if it doesn't? Hmmmmm. My thought is the market hasn't put any time frame on reopening the mine, i.e., it has already heavily discounted the current situation. That's why I think the downside is minimal. This country has been at war in one form or another for decades now so more unrest really isn't anything new. -Maybe new to some people taking a look at this play, but not new to the region at all. This is not to say that the current situation isn't serious. It is. But "at a certain shareprice", regardless of the situation (short of them walking away from it all which just won't happen) I'm pretty confident that the price won't go any lower. Regardless of the political situation, the mine and the diamonds will always be there, and so will the potential. I believe we are at "that certain price" now....the "we've got a mine but can't mine it at this moment and don't know when we'll be able to mine it" price. Hence, my call that this is the bottom. (and the tax loss selling that has been going on making the price even artificially lower). Could I be wrong? Sure I could. But damn it'll be soooo nice if I'm right! :)) Kevin

To: Chas. who wrote (120)	12/29/1998 10:54:00 AM
From: Kevin Hamlin	Read Replies (1) \| Respond to of 413

Very interesting trading over the past few days on DMW. I'm pretty sure it was tax loss related, which, if I'm right, should provide for a good bounce short term. I bought some pre-taxloss the other day, and still have a bid in there. Here's my thoughts which are divided into two categories. The first looks at what I believe is the tax loss scenario. The second segment looks at trading patterns today which is already telling a VERY interesting story. PART ONE: TAX LOSS IMPLICATIONS: 1) Since December 10th (I just picked a date approx 2 weeks ago), the biggest selling has by far been by two houses, Octagon (house 64) and CT Securities (house 90) 2) Ct Securities two biggest days of selling were the 17th and 23rd of December. Dec 17th: Sold a net of 98,000 shares at an average of .14 cents. Dec 23rd: Sold a net of 240,000 shares at an average of .16 cents. 3) Octagon's 3 biggest days of selling wer the 15th, 22nd and 24th of December. Dec 15th: Sold 165,000 at .15 cents. Dec 22nd: Sold 123,000 at .14 cents. Dec 24th: Sold 267,000 at .17 cents. So what's interesting about this as it relates to today and beyond? Well....a number of things. 1) First of all, imagine if these two houses were not in there selling! The price would be quite a bit higher I would say. The timing of their selling suggests tax loss. (Yes, the situation in Angola is not pretty...but then it never really was. They've been fighting there for about 23 years now.) If it is the tax loss selling that I think it is, these houses should for the most part evaporate now.....and the price will rise. 2) While CT and Octagon were by far the biggest sellers, there were certainly others as well. DMW's price has suffered this year and undoubtedly others have taken the tax loss hit over the past month or so. This would further artificially depress the price. PART TWO: HOW THE TRADING LOOKS TODAY ( and maybe beyond) 1) If you look back at the volumes and prices that CT Securities and Octagon were selling at, they average out probably somewhere around .15 cents. At this moment, (10:30am) the depth is showing the following on the bids: 76,000 shares bidding .15 cents 45,000 shares bidding .155 cents 40,000 shares bidding .16 cents Well guess what? Neither CT or Octagon is selling into this bidding AT ALL. Fluke? I don't think so. The closest offer at the moment is .19 cents. IF THIS WAS MORE THAN JUST TAX LOSS SELLING, EITHER OF THESE HOUSES WOULD BE IN THERE SELLING INTO THE BIG BIDS AT THE SAME .15 CENTS AVERAGE...BUT THEY'RE NOT! The only selling by either of these houses has been a grand total of 10k shares by house 90, which at .165 cents doesn't mean anything at all. SUMMARY: 1) Big selling 64/90 (and others) pre Dec 24th reeks of tax loss selling. 2) Houses 64/90 have practically "evaporated" so far from the selling, even though the opportunity is easily presenting itself today. 3) Bids are starting to build in. I'm looking for a move over the next week or so back up into the UPPER 20's at least...maybe a bit more. This is strictly based on the trading patterns that I'm seeing (something that I pay very close attention to) and is not based on any political developments that may happen or company announcements. Don't forget too that DMW has a very real and operational mine that they have stated they plan to re-open by the end of Jan at the latest once greater security features are all in place. While I'm looking for a good upside just based on the trading patterns noted above, one announcement to the effect that the mine will in fact re-open, and the price will jump very strongly. I would also expect the same jump would happen if the two fighting sides decided to respect the UN brokered cease fire. -Both announcements?....hehehehe, I'll retire! :) So we'll see. As I've said before, I think the risk/reward on this one is worth it. Watching the trading so far today, I feel even stronger about it! All the best everyone! Kevin