Tomato,
Author: teevee -- Date:1999-02-12 00:24:35
Subject: Are the 3 big stones a fluke?
WillP, You have been busy posting, and good posts
they have been. I would like to address the notions of
whether or not the big stones should be included or
excluded in the average value per carat of $301.00 as
reported by WSP, and whether or not we could
expect more of the same in a bigger sample, but from
a "classical" rather than a statistical perspective. My
methods may not be as rigorous as yours, however, I
believe they are equally as valid because they are
based on empirical experience....the stones are there.
As it is late, I may ramble on for awhile as well. I
hope you enjoy the story. First of all, the diamond
content of the upper mantle is not homogeneous.
What this means is that even if transport conditions via
a pipe or dyke are ideal for diamond preservation
etc., regardless of how good the indicator mineral
chemistry is, or any other consideration, diamond
content and grade can only be determined empirically
by incrimental sampling. Second, diamond size and
the value of diamonds in kimberlites (type I and II)
has been recognised to be distributed in a log-normal
fashion. What this means is that in economically viable
hardrock diamond mines, perhaps 4% to 10% of the
diamond recovered is responsible for 90% of the
value. Large, gem diamond is afterall the objective of
the "hunt" and when found, they are never thrown out.
Why would we do so here? By Comparison to a
known dyke occurence of type II kimberlite(the
Bellsbanke mine in South Africa), one can see that
about 4.4% of total carat weight recovered is
represented by diamonds 10 carats in size and larger
at Snap Lake as well. I hardly see anything unusual or
exceptional about the presence of the larger stones
found in Winspears two 100 tonne samples. I do
however suspect the 1-5 carat size range is under
represented due to under sampling. An interesting and
important aspect of Snap Lake is that the
Orangeite(type II kimberlite) is not serpentinized, and
for the most part is not contaminated by country
rock(as an aside, no serpentinization means no or low
clay content which is positive for diamond recoveries
in a plant-I have heard that clay is a problem at the
Ekati mine plant). If we decide to interpret the rotating
dip direction of the dykes as indictative of as
hypabyssal cone sheet(if it looks like a cone sheet,
call it a cone sheet), this infers through the process of
cone sheet emplacement(less volitile magma and also
comparatively less phreatomagmatic), not only huge
tonnage, but also uniform composition and diamond
content (also big diamonds uniformly occuring
throughout the cone sheet-but with less frequency of
course). This is now supported by the reasonably
consistant microdiamond counts from samples
collected from the east, south, and west edges of the
cone sheet. Interestingly, in contrast to type I
kimberlites, this "diamondiferous dunite" exhibits
almost no dilution and almost no mixing with and from
country rock resulting in low variation in grade(as now
also evidenced by CF results). This should also result
in comparatively less breakage of diamond than in a
pipe... There have been reports of some of the
diamond being compared to Russian white diamond.
This is a reference to diamond from the now closed
Mir mine. One aspect of this which I find interesting,
is that the chemistry of silicates from Snap Lake
suggests depths of origin from 320-350 kilometers
versus 200-220 kilometers depth at Ekati and diavik.
The depth of origin for silicates from Mir are also
deep seated from depths over 300 kilometers. This is
important information which IMO, tells us we can
expect overall higher valuations for Snap Lake
diamond (whiter color and fewer, if any inclusions).
As a historical aside, you should know that the
Russian White diamond from the Mir pipe was a big
headache for DeBeers from the late fifties to just as
few years ago. It forced them to change their grading
system because they could not match the whiteness of
the Mir diamond. In Canada, Birks was Black listed
from CSO sites for buying Russian diamond. Here is
my best guess as to what I expect for certain stone
sizes, based on my calculations on the back of an
envelope, from the 6000 tonne bulk sample: 27 ten
carat stones; 3 thirty carat stones and one (two if they
are really lucky) 100 carat stone. Let me know what
your "guess" is for these stone sizes so we can
compare after the results come out. By the way, gem
quality diamond of this size comonly averages about
$US5000 per carat or more, so....4 diamonds totaling
190 carats (1x100 carat stone, 3x30 carat stones)
could be worth $950,000.00, or could add about
$160.00 per tonne value. 27x10 carat stones
averaging $2000.00 per carat could add about
another $90.00 per tonne. If the rest adds an average
of $90.00 per tonne , we could end up at $US340.00
per tonne. Hmmmmm...seems reasonable to me.....
regards, teevee
Top
Reply
Author: WillP -- Date:1999-02-12 08:05:27
Subject: Ahh Yes, Well...
You've been talking to Nick Pokhilenko,
haven't you? :-)
Now there's one passionate fellow.
You're speaking to the readers, not to me. I
understand that. For the record, and for the
readers, I will largely confirm what you say. Or
more correctly...
#1. Your basic words are confirmable from the
literature.
#2. Discussions with the players at Winspear
would strongly lead one in that particular
direction. (Not that counts for anything
necessarily...every two bit VSE/ASE and most
TSE stocks have their unabashed hypesters,
after all.)
#3. I agree with your basic conclusions.
However...one must still, at this stage of the
project, remember that 'hope' is still a synonym
for 'conclusion'.
Once again, I will remind everyone of Gren
Thomas' casual remarks about coffee cans and
shot glasses, this time with a bit of math:
There were 12,800 carats recovered from
A154-South. That's 2.56 kg...roughly
equivalent to 730 grams of water. Given air
space, etc...might nicely fill a one litre can.
Now those diamonds were valued at $806,000
US. Go now, if you will, to a
shotglass...containing possibly 70 ml of
water...or 50 if we allow for air space. Then
again we can heap diamonds at the top if we fill
it to overflowing...so we'll remain at 70 ml.
Now 70 divided by 730 is just under 10% of
the total weight. Thomas said that that
accounted for 70% of the value of Aber's
diamonds.
I contend, as do you, that such distributions are
normal in the course of events. Or more
precisely...lognormal. :-)
You ask for my 'guesses'. OK. Fair question. I
note you didn't specify gems...so that makes it
easy:
Stones greater than 9.99 carats .... 34
Stones greater than 29.99 carats .... 5
Stones greater than 99.99 carats .... 0.5
As to gem quality...of the quality found in the
bulk...don't know. I used 25% in the all or
nothing approach. As pure optimists like
yourself would point out...this flies in the face of
reality. Of course...I've pointed that out myself
before.
As far as per carat prices go...your quoted
$5000 value is...umm...fair. The price does
keep escalating with larger stone weights.
I doubt if we well ever get the chance to verify
however. Results from caustic fusion are pretty
open...and mini-bulk samples are fairly well
disclosed. A bulk sample will be much more
guarded. Revealing results that *are*
statistically relevant will, after all, spill the
beans.
I'd like to take one last crack at this:
The release of materially pertinent information
in a timely and orderly fashion is mandated.
The release of additional information is not.
Once you hit the send button on a news
release...everyone has it. I'd like to think that
additional information in my hands is more
meaningful than it is in the hands of your typical
day-trader. I'd be unrealistic to think that
someone at, say DeBeers, knows less than I.
The average..err..guy can't draw logically
correct conclusions from CF data. That's
obvious by the crash-and-burns exhibited by
many other diamond plays...is it not?
I can.
It would be logical and reasonable to assume
that DeBeers et. al. REALLY can. :-)
From a guy who is long...very long...and has
been for years...I'd hate to have it ripped from
under me for less than fair value.
But enough...I seem to be losing that battle at
any rate. (Though it's still up to WSP/ABZ
what gets released...not the sentiment of
SW/SI/SH, nor the beliefs of JK/BB, etc. :-)
In closing....
Are the three fine gems a fluke?
Don't know.
I do know that you bet against persistence or
reality at your peril.
On the other side I also know if things are too
good to be true...they usually are.
Then again:
"Once is happenstance...twice is
coincidence...thrice is enemy action." - James
Bond.
Nice hearing from ya!
SlavaP
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