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by Will Purcell

The diamond stocks box score for Monday was a rousing 40-26-33-30 (A-D-U-N). The TSX Venture Exchange rose 18 points to 1,589 while polished diamond prices fell another 0.5 per cent. Belgian diamantaires report a good year, as the value of the country's rough 2011 diamond exports rose to $135 (U.S.) per carat from $85 (U.S.) per carat in 2010. The gross value of Belgium's exports increased by over 40 per cent but the quantity of gems fell 10 per cent. The promotional spin is that the price of diamonds rose sharply while the supply of available goods remained tight. In a more likely and less rosy possibility, the buyers wanted better gems and bought fewer of them. In fact, producers of small, lower-quality rough have seen their average prices increase little over the past eight years, while the average prices of large, flawless gems have tripled or quadrupled in value.

Eric Friedland's Peregrine Diamonds Ltd. (PGD), down one cent to 83 cents on 106,000 shares, has detailed its 2012 exploration program for Chidliak, its heavily-promoted (and now 100-per-cent owned) diamond property on southeastern Baffin Island. Peregrine recently increased its interest in Chidliak from 49 per cent when BHP Billiton Ltd. decided to get out of diamond exploration. Investors reacted negatively to the move, partly because the sale suggested BHP was unenthused by the results so far, and partly because they expect the exploration pace will be slower with Peregrine footing the full cost. BHP and Peregrine previously agreed to collect bulk samples of several key kimberlites this year; a program that probably would have cost over $25-million. Mr. Friedland now says Peregrine plans "continued execution of bulk sample related activities," waffle words that probably translate to "we will not actually collect the samples until 2013 and 2014." Peregrine will still be a busy driller this year, searching for new kimberlites and completing "pre-bulk sample core drilling." The latter work will allow Peregrine to pick its bulk sampling sites carefully, so as to avoid any unpleasant surprises. Mr. Friedland did not offer a projected cost of the scaled back 2012 program, but it probably will be comparable with earlier expenditures: somewhere north of $10-million. (The younger brother of Robert Friedland may work more efficiently than his promoter brother, but "cheap" is not in his vocabulary.)

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