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Diamonds & Specialty Minerals Summary for Aug. 13, 2014

2014-08-13 17:11 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score for Wednesday was a disappointing 49-60-152. The TSX Venture Exchange rose one point to 999 while diamond prices held steady. Robert Gannicott's Dominion Diamond Corp. (DDC) gained three cents to $15.49 on 139,000 shares. The company is continuing development on the Misery project, at the southeastern extension of the core Ekati property, and is working on the arduous environmental approval process for its big Jay project on the Buffer claims. Richard Clark's RB Energy Inc. (RBI) fell one-half cent to 36 cents on 506,000 shares. RB Energy's stock took a tumble in mid-July, when Mr. Clark revealed that there would another delay for full production at the company's lithium carbonate mine near Val d'Or. That will (perhaps) occur early next year.

Patrick Evans's Mountain Province Diamonds Inc. (MPV), up eight cents to $5.90 on 105,000 shares, has its long-awaited Class A land use permit for Gahcho Kue, 250 kilometres northeast of Yellowknife in the Northwest Territories. Mr. Evans's co-venturer, De Beers Canada, said getting the permit was "one of the final regulatory steps" for the project. (The partners are still waiting for a Class A water licence, which is still in the hands of the Northwest Territories Minister of Environment and Natural Resources.) Mr. Evans calls Gahcho Kue "the world's largest and richest new diamond mine" -- the key qualifier being "new" since it will fall well short of the annual diamond production at several existing mines including Diavik, just 100 kilometres to the northwest. It will also be one of the world's more expensive mines. The latest feasibility estimate projected Gahcho Kue with a capital of over $800-million and analysts and rival promoters suggest the final cost could handily top $1-billion. Whether Gahcho Kue will also be one of the world's most profitable mines will depend heavily on it producing a steady stream of the large and high-quality gems that popped up during bulk sampling. Gahcho Kue is one of very few diamond deposits where the appraised value of a bulk sample parcel is significantly higher than the modelled diamond value. Mr. Evans has deftly woven his promotion with the enthusiasm generated by those gems, which keeps Mountain Province's retail shareholders among the most loyal investors around. They have had a good summer, as a share cost just $4.90 in late June. The rally is coming at a good time, as Mr. Evans is working on a $370-million financing for Mountain Province's 49.9-per-cent share of the mine.

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