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Diamonds & Specialty Minerals Summary for April 15

2014-04-15 18:50 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score for Tuesday was a horrid 36-91-120. The TSX Venture Exchange fell three points to 992 while polished diamond prices inched upward. Randy Turner's Canterra Minerals Corp. (CTM) lost one cent to six cents on 230,000 shares. Canterra was the busiest diamond explorer in Canada's North in the early 2000s but it nearly abandoned gems after the recession. It is back with several new prospects in an old area: the district surrounding Snap Lake and Gahcho Kue. Richard Clark's RB Energy Inc. (RBI) closed unchanged at 74 cents on 1.90 million shares. RB Energy was Canada Lithium Corp. until early this year, when cost overruns and mounting debt forced it to merge with Mr. Clark's Sirocco Mining Inc. The final pieces of the company's lithium mine near Val d'Or are being installed and commissioning should wrap up this fall. Full production should come late this year.

Robert Gannicott's Dominion Diamond Corp. (DDC) slipped 53 cents to $13.88 on 241,000 shares after it reported slightly lower diamond production at Diavik through the first quarter of 2014. Diavik yielded 1.87 million carats from 588,000 tonnes of kimberlite or 2.91 carats per tonne. A year ago it produced 1.95 million carats from 505,000 tonnes, or 3.67 carats per tonne. If that was the reason for Dominion's slump today, the concern seems misplaced. The lower grade is the result of Diavik mining considerably more lower-grade kimberlite at A-154 North, which averages barely two carats per tonne. That is good news, especially with rough diamond prices rising significantly in the past few months. (Last fall, the A-154 North diamonds sold for an average of $180 (U.S.) per carat. By March the average had climbed to $190 (U.S.) per carat and the current price is believed to be approximately $200 (U.S.) per carat -- nearly double the average price for the higher-grade A-418 pipe, which accounted for a majority of the Diavik gems last year.) The mix of diamonds in the A-154 twins is such that rising prices are more pronounced there than at A-418. The other encouraging news in the Diavik production numbers was the amount of rock put through the plant. Diavik's quarterly production implies an annual rate in excess of two million tonnes per year, all from underground. When Mr. Gannicott first said Diavik would shift entirely to underground mining, analysts and rivals believed the mining rate would drop off dramatically. That has not happened. Meanwhile, Diavik expects annual production from underground mining this year to reach 6.1 million carats, with another 800,000 carats obtained from processing coarse ore rejects and an improved recovery system. The forecast is in line with 2013 results, but the better prices should yield significantly higher revenue.

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pilot plant talk, metallurgy talk, before any reserves, hockey playing buds at bcsc help let the talk going and the paper trading

Posted by 43-101 at 2014-04-15 19:41


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