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Diamonds & Specialty Minerals Summary for Jan. 28, 2015

2015-01-28 20:11 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score for Wednesday was a lacklustre 40-53-159. The TSX Venture Exchange fell nine points to 667 while polished diamond prices inched higher. Eric Friedland's Peregrine Diamonds Ltd. (PGD) jumped three cents to 20 cents on 1.07 million shares. Peregrine expanded its diamondiferous kimberlite tonnage estimates for Chidliak on Monday and clarified the regulator-required prose on Tuesday. The clarification may have enthused investors more than the original news. Negar Adam's Makena Resources Inc. (MKN) gained one cent to 4.5 cents on 10.77 million shares. Makena is set for the "next phase of operations" -- probably just geophysics -- on its Patterson uranium prospect in Northern Saskatchewan.

Robert Gannicott's Dominion Diamond Corp. (DDC) jumped 48 cents to $20.36 on 528,000 shares. The company now has its prefeasibility study of Jay, the big pipe north of Diavik that could extend mining at Ekati by a decade. The 45-million-tonne pipe, perhaps the largest in Canada's North, averages two carats per tonne. Its 90 million carats are more than De Beers Canada and Mountain Province Diamonds Inc. (MPV: $5.02) plan to mine at Gahcho Kue over a 15-year period. Unlike the Gahcho Kue pipes, Jay is well offshore in Lac de Gras and Ekati's original owner, BHP Billiton Ltd., never seriously thought it feasible to mine based on an assumed capital cost topping $1-billion (U.S.). BHP also believed the value of the Jay diamonds, currently modelled at $64 (U.S.) per carat, was too low to be profitable given its expected operating costs. Mr. Gannicott thought otherwise on both counts. His belief in Jay was the main reason he had Dominion pay BHP $500-million (U.S.) for Ekati and the surrounding Buffer claims in 2012. Mr. Gannicott found good reasons -- some of them legitimate -- to fly over the Jay pipe during the past 20 years, and he was intrigued by the shallow water in that part of the lake. (Technically, Jay is in Lac du Sauvage, a shallow bay at the northeastern end of Lac de Gras.)

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