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by Will Purcell

The diamond and specialty minerals stocks box score for Friday was a feeble 45-62-142. The TSX Venture Exchange rose one point to 934 while polished diamond prices held steady. The supply of rough will increase if Robert Mugabe can convince buyers to accept gems from the Marange district of Zimbabwe. The Zimbabwe government is negotiating to sell rough directly to customers in China, Israel and Dubai without violating international sanctions. The Kimberley Process has vacillated between an embargo and certification of Marange diamonds for the past five years while several individual nations, led by the United States, have firmly maintained sanctions against imports of Marange rough. Zimbabwe exported eight million carats of diamonds last year, worth an average of just over $100 (U.S.) per carat. It has the potential to substantially increase production as Marange is one of the largest diamond fields in the world.

Eric Friedland's Peregrine Diamonds Ltd. (PGD), unchanged at 43.5 cents on 64,000 shares, has spent the spring moving 500 tonnes of CH-6 kimberlite from its Chidliak property on southeastern Baffin Island to Iqaluit. The overland shipments began five weeks ago with four large tracked tractors hauling the rock by sled, assisted by several shipments in an ancient Douglas DC-3 aircraft. The rock will be shipped southward this summer during Iqaluit's annual sealift and will eventually go to one of the main dense media separation facilities in Canada. The rock may then face a lengthy rest after its arduous journey. Mr. Friedland says diamond recovery will not start until Peregrine's partner decides whether to participate in a Chidliak joint venture. If it does, De Beers would have to spend a minimum of $37-million on exploration and needs to spend $58.5-million to acquire a 50.1-per-cent interest in the project. Mr. Friedland insists all signs point to De Beers participating, but the diamond major will likely wait until fall before deciding. De Beers is spending $2-million of its own cash this summer on preliminary exploration; probably seeking signs of large kimberlites on the property that could support a decision to proceed. Meanwhile Peregrine is spending $3.3-million on its CH-6 bulk sample, which will keep Mr. Friedland supplied with promotable news through the long Arctic winter.

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