Hello All, especially Vaughnn,
I've got to agree completely with Goalie.
SUF, unlike any other diamond miner/explorer (DMM.B, ABZ, WSP, MPV, etc.) has earnings and cash flow. The exploration/production at Marsfontein and Klipspringer, the places where M1 and the Sugarbird blow and the Leopard fissures have all produced diamonds for relatively small capital outlays, versus a sum total of Dia Met production 8+ years after discovery and expense of $500+ million, is quite compelling.
SUF at 40% on Marsfontein is still frustrating to those with memories. Why was the stock at $20+ previously? Exploration potential or earnings potential? I'm thinking that 40% of M1 plus the likelihood of 40% of the other anomalies on Marsfontein (BTW At least three seem to be similar, geophysically, to the original data that attracted SUF to M1), plus 100% of Klipspringer is worth MUCH more, SOONER, than any other diamond miner.
Look at Winspear. With lots of drill holes seeming to demonstrate a good reserve, but some difficulty proving (statistically) grade and valuation, this company has a market cap of well over $100million. While I am greatly impressed by the diligence of their drilling program, WSP is HOPING to define something that seems like the Leopard fissure, except that its under/beside a lake in NWT, at least 2 years from production, with relatively large start-up costs (compared to SUF). Yes they hope to find a pipe or the "feeder" system (see linkage of Leopard system to M1). So I'll trade ya Munn, Margaret, Yamba and Lac de Gras for Hilltop, throw in the Leopard fissures, and you've got better, cheaper and faster mining than WSP.
This is not to say WSP is wanting. Far from it. But with SUF market cap at $160 million, sustainable cash flow from the fissures of over $1.00 per share for 20 years, all the above exploration potential PLUS 40% of Marsfontein and whatever eventually comes out of Angola, SUF is trading at a ridiculous level. Value investing in not in vogue. But the last time I checked, there was only one Canadian diamond miner making dough -- SUF. (BTW - can anyone guess the second largest diamond producer in RSA last year?)
I don't want to argue facts, but "Argyle which can barely make ends meet at $42 / tonne has more than twice the value per tonne that Camafuca has at $17 / tonne" seems incorrect to me. Is the $17 value the early 80's number from Camafuca? It is my understanding that this number should be closer to $100/tonne. And there is enrichment in certain areas. And WAY MORE tonnes than anywhere else in the world.
I guess my view of diamond mining is simplistic. I kinda figured that the goal was to find a big pile of rocks, a really big pile, with lots of valuable diamonds that could be cheaply removed from this pile, quickly. The keys to making money are the "big pile", the "value" of the diamonds, the "cheap" mining costs and the "quick" turnaround time. Please someone, anyone, point out a company that has better prospects for this very simple view.
If SUF never finds a pipe in the NWT, I'll be disappointed. But, unlike all the other juniors scrambling for drill results, Thank God, and the many good folks that CJ has assembled, for backstopping a former junior with EARNINGS, much exploration UPSIDE, and even tho it is in Angola, the WORLD's LARGEST diamondiferous kimberlite pipe.
And just how is anyone else in the diamond mining world gonna pay for their exploration? SUF does it from revenue, unlike anyone other than De Beers!
And given that all the value (lamentably underpriced by the market) in SUF was generated by the Jennings, L. Barker, K. Freeman, H. Bird et al, just imagine what they might come up with in the year after they've finished the death dance with De Beers, after they've become Canada's first PROFITABLE diamond miner. This might sound silly, but given all of SUF's present assets, given their vast potential, the reason that I own SUF (way too much!) is the people. Howard Bird is so driven to find the big one in NWT. L. Barker is gonna make mines where no one else can. K. Freeman is gonna exploit any given resource the most efficient way possible. And all the sudden, Dr. Jennings doesn't have to fight off De Beers. I wonder how he fills his days now? (BTW, apparently there are many more impressive folks at Klipspringer, but we don't have a lot of contact with the excellent team there.)
Enough said. For investment purposes, buy SUF. For drilling results at the exclusion of all else, choose your poison.
If you want more news from SUF, for heaven's sake, call them!
Undervalued,
Confluence
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