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Diamonds & Specialty Minerals Summary for Sept. 9, 2014

2014-09-09 18:26 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score for Tuesday was a discouraging 39-72-154 as the TSX Venture Exchange gained three points to 988. Polished diamond prices inched lower. Lukas Lundin's Lucara Diamond Corp. (LUC) lost three cents to $2.38 on 497,000 shares. Lucara's recent silence has allowed it to retreat from a record high of $2.88, but the company has another sale of large and valuable diamonds from Karowe set for next month. Anthony Huston's Graphite One Resources Inc. (GPH) gained one-half cent to 15 cents on 7.91 million shares. The stock has been a frantic trader since Mr. Huston linked his Graphite Creek project to expected demand for graphite triggered by a mammoth battery factory proposed by Tesla Motors Inc.

Dr. Stewart Blusson's Archon Minerals Ltd. (ACS), up 13 cents to $1.45 on 12,000 shares, has told Chuck Fipke it intends to exercise its right of first refusal on the pending sale of the Ekati Buffer claims, north of Lac de Gras. Robert Gannicott's Dominion Diamond Corp. (DDC: $15.11), which bought the majority interests in the Ekati properties held by BHP Billiton Ltd. early last year, agreed two months ago to buy Mr. Fipke's 10-per-cent interest in Ekati and its surrounding Buffer claims; the latter for $17-million. Archon will have to cover $5.9-million of that sum to horn in on Mr. Gannicott's deal. Dr. Blusson, who discovered the first diamonds at Ekati in 1991 with Mr. Fipke, has long been a believer in the Buffer claims, more so than his former partners. Dr. Blusson claimed he was entitled to a greater share of Buffer, and more than three years of bickering and lawyering resulted in a 1997 compromise that gave him a 31.2-per-cent interest compared with Mr. Fipke's 10-per-cent share. Dr. Blusson reserves most of his enthusiasm for the big Jay pipe on the southeast fringe of Buffer. Jay, which is at the northeastern extension of the rich string of Diavik pipes, contains an estimated 46 million tonnes of kimberlite at a grade of about two carats per tonne. The diamonds are unspectacular, worth perhaps $80 (U.S.) per carat, but Mr. Gannicott thinks that is enough to keep Ekati running profitably through the 2030s.

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