Showing posts with label Diamond. Show all posts
Showing posts with label Diamond. Show all posts

Tuesday, December 4, 2012

New diamond technology passes test with flying colours – Rockwell

The high-throughput bulk X-ray technology that the TSX- and JSE-listed Rockwell Diamonds has been putting through its paces has passed with flying colours.

The pilot bulk X-ray project at the Saxendrift mine in the Northern Cape has already repaid the cost of setting it up.

The price of Rockwell shares rose more than 4% to R2.50 a share in Johannesburg on Monday.

Eighty per cent of the revenue at Rockwell’s Saxendrift operation is from stones larger than 10 mm, which are ideally suited to the bulk machines.

Rockwell CEO James Campbell said the next phase would be the rollout of the technology at Rockwell’s new Saxendrift Hill Complex mine, where the processing plant would be based on two bulk X-ray systems processing 100 000 m3 of material a month.

The capital outlay of $2-million would be funded from working capital.

“We believe this technology will become an integral component in our total diamond value management strategy. The work represents an opportunity for a step change in our approach to diamond recovery, enabling a quicker payback than any other type of recovery plant,” Campbell said.

Particularly noteworthy was that previously processed material was used and that the technology had yet to be deployed in a run-of-mine (ROM) application.

Rockwell’s projects team had demonstrated that it is able to replicate the system on other operations.

The bulk X-ray pilot project came in 7% lower than the $1.5-million budget, with revenue from the sale of the diamonds recovered totalling  $4.2-million.

The technology recovered 1 596 ct from 27 609 m3 of old recovery tailings, which another operator had previously processed using older technologies.

Among the recoveries were three particularly large stones weighing 52.72 ct and 145 ct.

The recovery tailings achieved a grade of 2.97 ct/100 m3.

The deployment of the technology in ROM applications across Rockwell’s Middle Orange River projects was expected to yield additional recoveries at lower operating cost, Campbell added.

Edited by: Creamer Media Reporter

Monday, December 3, 2012

Gem Diamonds delays development of Lesotho mine plant

Miner Gem Diamonds said it would sell its Ellendale mine in Australia to Goodrich Resources for A$14.3-million ($14.9 million) and place the development of a plant at its project in Lesotho on hold to preserve cash.

"The main elements of project Kholo (in Lesotho, Africa) would still be pursued but would be executed in the most appropriate manner given the current financial climate, with a view to reducing cash outflow in the short term," the company said on Monday.

Last month, Gem Diamonds said it had started a review of the Kholo project following the extension of its development schedule earlier this year.

The company owns two production mines, the Letseng mine in Lesotho of which the Kholo project is a part of and the Ellendale mine.

The Ellendale mine, located in western Australia, produces about half the world's supply of rare yellow diamonds and contributed $3.1 million in profit last year.

As of June 30, the gross assets attributable to Ellendale were $114.2 million. The sale of the mine is expected to be completed in January 2013.

Edited by: Reuters

Tuesday, October 23, 2012

Rio's iridescent diamonds draw keen interest from international bidders

By Marc Howe

Rio Tinto's auction of a fresh set of multi-hued diamonds from its Argyle mine in Australia have elicited strong competition amongst bidders hailing from both Asia and Europe.

According to the Australian, buyers purchased 56 single pink diamonds, two red diamonds and 19 blue diamonds.

Argyle Pink Diamonds manager Josephine Johnson says the company was "delighted to see such a strong appetite" for the auction of the iridescent gem collection.

Johnson says several of the diamonds were snapped up by Indian bidders, where pink diamonds are becoming increasingly popular, while a bidder from Japan, the traditional market for the oddly hued gemstones, managed to nab the Argyle Elektra, a stunning blue diamond.

The most valuable diamond from the collection, a 1.32 carat pink diamond, went to designer John Glajz who intends to use gemstone for a heirloom jewellery piece.

Despite the strong show of interest in the rainbow-hued gem set, Rio Tinto recently announced plans to slash staff positions at its Argyle mine in Western Australia by a fifth, in what many believe was a preparatory measure for its sale or public listing.

Production at the Argyle mine, which accounts for 90% of the global supply of pink diamonds, is set to come to an end within a decade, after which point prices for the rare gems are expected to soar.

Friday, September 28, 2012

Diamondcorp says Lace tailings retreatment to resume next year

Aim- and JSE-listed Diamondcorp said on Friday it had shut down its the Lace processing plant and that full-scale production from tailings retreatment would not resume until the first quarter of 2013.

The company explained that it had shut down the plant in response to the weakening of diamond prices in the July to August period. During the shutdown, the company would undertake plant upgrades.

Diamondcorp said 5 312 ct of diamonds recovered from tailings retreatment prior to shutting down the plant would be held in inventory and that it would be sold when prices recovered. The company postponed the proposed tender for September.

The firm also holds 2 168 ct of diamonds recovered from underground bulk sampling, which would be retained for evaluation by potential off-take partners.

Diamondcorp posted a loss of £1.56-million for the six months to the end of June, compared with a loss of £1.17-million a year earlier.

CEO Paul Loudon said the period under review saw the company make significant steps towards its goal of being a long-term diamond producer. “Having secured the majority of the project finance required for the Lace underground development, we look forward to finalising the balance of the financing and starting underground development as soon as possible."

The company said last week it would receive R220-million in funding for the underground development and purchasing of mining equipment for its Lace mine, outside Kroonstad. It also agreed that the company would arrange another R100-milllion for the mine prior to the initial drawdown of the IDC facility, which would take total project funding to R320-million, representing a 33% contingency on the forecast peak-funding requirement.

Edited by: Mariaan Webb

Aim- and JSE-listed Diamondcorp said on Friday it had shut down its the Lace processing plant and that full-scale production from tailings retreatment would not resume until the first quarter of 2013.

The company explained that it had shut down the plant in response to the weakening of diamond prices in the July to August period. During the shutdown, the company would undertake plant upgrades.

Diamondcorp said 5 312 ct of diamonds recovered from tailings retreatment prior to shutting down the plant would be held in inventory and that it would be sold when prices recovered. The company postponed the proposed tender for September.

The firm also holds 2 168 ct of diamonds recovered from underground bulk sampling, which would be retained for evaluation by potential off-take partners.

Diamondcorp posted a loss of £1.56-million for the six months to the end of June, compared with a loss of £1.17-million a year earlier.

CEO Paul Loudon said the period under review saw the company make significant steps towards its goal of being a long-term diamond producer. “Having secured the majority of the project finance required for the Lace underground development, we look forward to finalising the balance of the financing and starting underground development as soon as possible."

The company said last week it would receive R220-million in funding for the underground development and purchasing of mining equipment for its Lace mine, outside Kroonstad. It also agreed that the company would arrange another R100-milllion for the mine prior to the initial drawdown of the IDC facility, which would take total project funding to R320-million, representing a 33% contingency on the forecast peak-funding requirement.

Edited by: Mariaan Webb

Wednesday, September 19, 2012

Fluor completes $500m Botswana diamond mine upgrade

Project management services company Fluor Corporation on Wednesday said it had completed the $500-million infrastructure and plant upgrades at Debswana’s Jwaneng Cut 8 mine, in Botswana.

The upgrades formed part of Debswana’s $3-billion expansion programme at the mine.

New York-listed Fluor had been contracted to provide engineering, procurement and construction management services for the mine, which was the world’s richest diamond mine by value.

The expansion would enable the removal of overburden to allow the mine to access 91-million tons of ore that would yield about 102-million carats of diamonds and would extend the life of the operation to 2025.

“Executing a project inside an operational mine is a challenging task and we are proud to complete the project with minimal disruption and impact to production,” Fluor mining and metals business line GM Matthew Cobbett stated.

The company said it would continue to support Debswana – a joint venture between the government of Botswana and De Beers – and that it was currently undertaking a prefeasibility study for a new treatment plant at the Letlhakane diamond mine, north of Botswana’s capital, Gaborone.

Wednesday, September 12, 2012

Rock around the clock sees Rockwell lift production

Toronto- and Johannesburg-listed Rockwell Diamonds had lifted diamond production for the second quarter ended August 31 by 14% year-on-year by processing 23% more gravel, despite a temporary mining suspension at it Tirisano operation.

The South Africa-focused diamond miner said production at the Saxendrift complex, located near the Middle Orange River, in South Africa’s Northern Cape province, including production from the newly acquired Jasper project had achieved a combined 26% year-on-year increase in volumes processed at 476 825 m3. This resulted in a 6% increase in diamond production to 1 996 ct.

The company noted that Saxendrift had over the past two quarters moved to processing lower-grade sandy gravels that made up most of the remaining resources. This required better mining efficiencies and in-pit screening to maintain a profitable production profile for this part of the greater Saxendrift, Saxendrift Hill and Jasper deposits.

The miner’s focus at the bulk X-ray plant was the reprocessing of recovery tailings as well as the implementation of continuous operations and optimising the materials preparation area, to convert the pilot sampling plant to meet the needs of a continuously operated production plant.

A grade of 2.5 ct per 100 m3 was achieved from processing 4 808 m3 of tailings material.

Initiatives to increase and extend the mine life of Rockwell's package of Middle Orange River properties and the associated operational footprint were ramping up and included introducing the Jasper project, Wouterspan project and Saxendrift Hill project into the operation.

Rockwell said the right-sizing strategy being implemented at the Tirisano project early in July, located on the Orange river, saw mining operations put on hold and work concentrated in reconfiguring the processing circuit to rationalise the project.

The new wet front-end was commissioned early in the second quarter and had been integrated into the new processing plant, which would give it increased capability to process the clay-rich Tirisano gravels.

Volumes processed at Tirisano during the first six weeks of the quarter declined by 11% to 57 803 m3, with the recovery of 558 ct being 8% lower on a year-on-year basis.

“Through the concerted efforts of Rockwell's executive and mine management teams, we quickly right-sized the Tirisano mine to adjust to the current diamond market, positioning it to provide positive returns,” Rockwell CEO James Campbell said in a production update.

The company said the plan was on track and Tirisano mining operations were scheduled to resume at a monthly mining rate of 50 000 m3 by the end of this month.

Further, the company’s Klipdam operation, also located in the Northern Cape, achieved a 27% year-on-year increase in volumes processed to 209 081 m3 for the second quarter. However, it fell short of the quarterly throughput target owing to continued plant and mining limitations.

Nevertheless, the mine's diamond production increased by 31% year-on-year to 2 274 ct as a result of an improved overall size distribution and quality from mining more of the paleaochannel gravels and primary Rooikoppie-material.

“At Klipdam, we were able to mine a better resource-area and the mine delivered a good operational performance. We still have some way to go in order to achieve our production targets which is a high priority for Klipdam in coming months."

The company’s stock was priced at 28 Canadian cents apiece on the TSX on Wednesday morning.

Edited by: Creamer Media Reporter

Thursday, September 6, 2012

Harry Winston profit nosedives on low prices, weak sales

Diamond miner and luxury goods manufacturer Harry Winston reported a significant 52% year-on-year drop in profit, the result of weak rough diamond prices prompting the producer to withhold diamonds from auction.

The miner reported net profit of $4.8-million or 6c a share for the first quarter ended on July 31, considerably lower than the $10-million or 12c a share achieved in the previous comparable period.

Consolidated revenue form both the mining segment and the luxury brand segment fell 20% to $176.9-milllion, the result of continued market uncertainty driving diamond prices down.

The company sold about 430 000 ct for an average price of $142/ct, compared with about 570 000 ct for an average price per carat of $157 in the comparable quarter of the prior year.

The 24% decrease in the quantity of carats sold was mainly the result of the company's decision to hold some inventory until stability returned to the rough diamond market.

The 10% decrease in the company's achieved average rough diamond prices in the second quarter resulted from a decrease in the market price for rough diamonds from the peak achieved in July 2011, partially offset by the sale of the higher priced goods held back by the company in the first quarter of the current financial year as a result of an observed imbalance in the rough and polished diamond prices for these goods during that period.

"This quarter has seen transaction numbers and margins grow in our luxury goods segment even as we have withheld rough diamonds, from a soft diamond market, rather than sell at depressed prices,” CEO Robert Gannicott said in a statement.

Harry Winston had about 700 000 ct of rough diamond inventory with an estimated current market value of about $90-million as at July 31, of which about $65-million represented inventory available for sale.

The company expected the trend of wealth creation in emerging markets, combined with increasing tourism to remain key drivers of increasing demand for luxury jewellery and watch products. Over the long term, consumer brand loyalty for luxury products was expected to remain strong.

The Diavik diamond mine, located in Canada’s North West Territories, in which Harry Winston owns a 40% share, was expected to produce about eight-million carats on a 100% basis.

The company’s Toronto-listed stock traded 1.65% higher at C$12.31 on Thursday morning.

Edited by: Creamer Media Reporter

Monday, August 20, 2012

Russia to ease foreign mining of gold, PGM, diamonds

Russia's ministry of natural resources has drafted a bill that will facilitate the access of companies with foreign capital to mine its gold, platinum group metals (PGM) and diamond reserves, according to documents published on a ministry website.

Russia's gold reserves account for about 10 percent of the global volume, second only to South Africa's, according to ministry data. Its share in palladium accounts for 24 percent of global reserves and in diamonds 35 percent.

But Russia lags behind countries such as Canada, Australia and the United States in exploration and development of minerals, Sergei Donskoi, recently named minister of natural resources, has said.

The draft bill would allow foreign-owned businesses to mine deposits of up to 250 tonnes (about 8 million troy ounces) of gold, five times the existing cap of 50 tonnes set in 2008, without facing additional regulation from the state, the documents showed. (www.mmr.gov.ru)

Current Russian legislation classifies gold reserves over 50 tonnes as well as any diamond and platinum group reserves as deposits of "federal significance", which means the state can ban a foreign-aligned investment that it deems is a "threat to the state defence and security".

Polyus Gold, Russia's largest gold miner, produced 47 tonnes of gold in 2011 and has proven and probable reserves of 2,830 tonnes.

Canada's Kinross Gold Corp, the largest foreign investor in Russia's gold sector, has said Russia could lure more than triple the current level of investment in gold exploration to $1.6 billion a year by making small changes in legislation and offering better incentives.

The bill would bring Russian practice into line with that of other leading mining countries, Lou Naumovski, head of Kinross's Moscow office, told Reuters on Thursday.

"The fact that no government approval would be required should give more comfort to exploration companies to start exploring again," he said.

"The other important measure is the suggestion that a discoverer of a strategic deposit could proceed to mine development without the threat that the government could withdraw the licence with only modest compensation," Naumovski added.

Source: Reuters

Harry Winston places Diavik mine’s value at C$2.6bn

Luxury goods manufacturer and diamond miner Harry Winston had placed a net-present value of about C$2.6-million on its 40%-owned Diavik diamond mine when it on Monday released an updated life-of-mine plan.

The company said it expected to move ahead with the development of the A-21 diamond pipe, which it expected to cost about C$500-million and would deliver ore from 2017. This would extend the life of the mine, which had been in operation since 2003, to about 2023.

The value of Harry Winston’s interest in the mine is about C$1-billion when all the remaining resources and reserves were taken into account, while the value totalled about C$800-million based only on proven and probable reserves. The company said it believed that the A-154 North resources were likely to be promoted to reserves when the current drilling programme is completed later in the year.

Harry Winston said it expected capital expenditure at the mine to total C$955-million to the end of its life.

According to a media report, Harry Winston was apparently in “advanced talks” with 60% owner of the Diavik mine diversified miner Rio Tinto, which is also the operator of the mine.

Shares of the luxury goods manufacturer traded 4.48% lower on the Toronto-bourse at C$12.80 apiece on Monday.

Source: Creamer Media Reporter

Tuesday, July 31, 2012

Botswana declines option to raise De Beers stake

Botswana said on Tuesday it had declined an option to lift its stake in diamond giant De Beers, leaving global miner Anglo American with the full $5.1-billion price tag for a buy-out of the remaining shares owned by the Oppenheimer family.

Diamond-rich Botswana had a right to raise its shareholding in the company to 25% from 15%, a move that would have cost it $1.3-billion at a time when it is striving to contain government spending.

The company and the country are deeply entwined. De Beers is the world's largest diamond producer by value and more of the precious gems come from sparsely populated Botswana than any other nation.

But deepening the relationship is too costly at the moment for the southern African government.

The ministry of minerals said in a statement the price was equal to about 10% of the country's gross domestic product, "a large cost for a country whose government budget is still in deficit, and is trying to bring the budget to balance within a year and a half."

It said "such a purchase would inevitably push back the restoration of balancing the budget and drain the country's international reserves."

The move would have also set back efforts to diversify Botswana's economy away from its heavy reliance on diamonds.

Anglo formally offered the Botswana government a pro-rata share of the Oppenheimer family's 40% stake under a long-standing pre-emption agreement.

First-half profit halved at De Beers as trade buyers were held back by a lack of funds and worries over consumer demand.

Anglo last week posted steeper-than-expected drop in profits as faltering global economic growth hit prices but it has put its long-term faith in diamonds.

Source: Reuters

Saturday, July 7, 2012

July 6, 2012: The day the Oppenheimers kissed De Beers goodbye

The Oppenheimer family, controller of giant diamond miner DeBeers since 1927, has officially let go of it 40% stake in the company on Friday, after South Africa’s Mineral Resources Minister Susan Shabangu approved the acquisition of that portion by Anglo American (LON:AAL).

The $5.1 billion deal, announced in November, increases Anglo’s stake in the diamond mining giant from the 45% to 85%, loosening the Oppenheimer’s grip on De Beers after almost 80 years with the company.

De Beers and the Oppenheimer family are one of the most storied relationships in the world of diamonds, and perhaps in mining itself.

Cecil Rhodes formed De Beers Consolidated Mines in 1888. Recognizing that limiting the production of diamonds was the only way to enhance their value, Rhodes bought up or squelched competitors. Cullinan Mine, operated by Bernard and Ernest Oppenheimer, refused to join the De Beers cartel, and the business grew to rival De Beers. During World War I Cullinan Mine was finally absorbed into De Beers, and Ernest Oppenheimer became chairman of De Beers in 1927.

Ernest Oppenheimer also founded Anglo American in 1917.

There have been three generations of Oppenheimers exerting major control of De Beers, up to Nicky Oppenheimer, who represented the family during the sale.

“This has been a momentous and difficult decision as my family has been in the diamond industry for more than 100 years and part of De Beers for over 80 years," said Nicky Oppenheimer.

"After careful and deliberate consideration of the offer, and what is in the best interests of the family, we unanimously agreed to accept Anglo American’s offer. Anglo American is the natural home for our stake as they have been major shareholders in De Beers since 1926 and have a deep knowledge of the diamond business. I am certain that Anglo American will provide strong support to Philippe Mellier and the De Beers management team.”

Diamonds uncertain future

BHP, the globe's biggest mining company, launched in November a review of its diamond operations with an eye to selling most or all of its assets. BHP has already off-loaded its Chidliak exploration project in Canada to Peregrine Diamonds.

Rio Tinto followed in March saying it is rethinking its gems business.

Rio operates three diamond mines including Argyle in Australia, Diavik and Murowa in Zimbabwe. The miner also has an advanced diamond project in Bunder, India.

The diamond business may simply be too small for the mining giants. Rio Tinto's diamond mines contribute less than 2% to its earnings and it’s a tiny proportion of BHP's income as well.

On top of that the profit margins for the gems, compared to say iron ore, which sits at a more than comfortable 70% in Rio Tinto's case, is too small.

With De Beers going private a decade ago and now being subsumed by Anglo-American direct exposure for resource investors to diamonds had always been hard to come by.

De Beers is the globe's number two diamond producer behind Russia's Alrosa.

Monday, June 25, 2012

Asian demand for diamonds set to boom

While in the short term, demand for diamonds globally is struggling, analysts say demand from China and India is set to far outpace the annual 2.8% supply growth.

India's diamond exports crashed by more than 44% in May as compared to a year ago period, sparking off panic in the diamond cutting and polishing industry. Though imports of rough diamonds also fell 20% in May, the country's rough diamond imports had jumped 20.3% the month before, in April.

The ``unexpected increase'' in April came under intense scrutiny from government officials, especially since the polished diamond trade was flat at that time. Diamantaires told the visiting regulatory officials that demand for diamonds in India and China is set to far outpace supply, which is limited to production at a small number of mines worldwide.

"The demand for diamonds is set to boom. There is no doubt about this. It will be driven primarily by the growth of the markets in China and India,'' said Maneesh Dhukaje from Hare Krishna Exports, a diamond trading firm.

In India alone, he noted, the market for diamonds is expected to grow faster than that for gold over the next five years, with some estimates pegging it at 1 trillion rupees. During the same time, India and China are expected to represent half the global growth in demand for diamonds.

Meanwhile, at the Hong Kong Jewellery and Gem Fair that concluded last week, some strain was evident in the business community, with most Indian dealers speaking about the external factors that had influenced the market. Traders also referred to the `silence' from the US market, which remains the biggest market for diamond jewellery in the world.

However, demand for light-weight diamond jewellery by China and India's rapidly expanding middle class consumers could counterbalance the expected drop in demand from key markets, traders added.

Consulting firms also have predicted that prices of rough diamonds are set to rise between 3% and 10% due to demand from emerging markets like China, India, Hong Kong and UAE, given the gradual decrease in global production of rough diamonds.

Traders said demand for diamonds is on the rise in India with the affluent class wearing more of them as a style statement and the middle class consumer shifting to the 16-18 carat gold diamond studded jewellery style that is most preferred in the major metros.

Diamond jewellery with low carat gold also appears to have found pride of place in smaller areas and districts of India, especially in Tier-II and Tier-III cities.

"People in these smaller cities are going for 14 carat diamond jewellery sets and even 12 carat sets to suit their shoe-string budgets instead of the usual 18 carat diamond studded jewellery pieces,'' said Dhukaje.

He added that the demand for diamond necklaces and bangles was especially on the rise in smaller cities.

The Indian diamond industry imports rough stones which are cut and polished within the country before they are exported. This part of the business took a major hit in May this year. According to data released by the Gems and Jewellery Export Promotion Council, exports of cut and polished diamonds fell from 51,22,000 carats in May 2011 to 25,74,000 carats in the corresponding period of this year.

In value terms, the fall in exports was from $2,240 million to $1,245 million in the same period. The decline in May was steeper than in April this year, which saw exports decline 35% in terms of value as compared to April 2011.

Diamond traders are blaming the fall in exports to the imposition of a 2% import duty on cut and polished diamonds on January 17 this year, which most traders say has resulted in a dramatic reduction. India's polished diamond exports for fiscal 2011-12 slipped by 17.3% immediately thereafter, say traders.

"At the start of January this year it was a completely different scene. Net polished diamond exports, which is the excess of exports over imports, was recorded at $828.35 million in January 2012, which was a considerable increase considering that the there was a deficit of $84.17 million in January 2011. Net rough diamond imports, which is imports less exports, also rose by 3% to $940.82 million,'' said Shashi Jariwala, diamond trader and exporter.

"Though margins are lower, cut and polished diamonds are imported for the purpose of value addition,'' he added. India imported $1.58 billion worth of roughs in April, up 8.4% as compared to March. The volume of imports also increased, up 42.2% to 14.2 million carats. The average value of imports totalled $111.41 per carat.

Wednesday, May 30, 2012

Gold producers, Indian cutters might fund Canada’s newest diamond mines

With positive feasibilities studies in hand, companies aim to start building at least three new diamond mines in Canada by the third-quarter of next year, at a combined cost of around $3.4-billion.

First the hopefuls, including Mountain Province, Shore Gold and Stornoway, need to raise the finance to do so, and analysts say they may have to look to non-traditional sources, given the rocky shape global markets are in.

Despite glowing prospects for diamond demand and prices, Canadian juniors readying to start developing their mines have been receiving a cool reception.

The European financial institutions that traditionally provide project funding to build gem mines have been whacked by both new European banking rules upping the reserve ratios they are allowed, as well as the broader market funk in the continent, and the continuing fears of a Mediterranean state’s default.

And, with share prices dwindling near two-and-a-half-year lows, equity financing is mostly out of the question for Stornoway and Shore Gold.

National Bank Financial analyst Eldon Brown said that the three diamond pretenders would likely have differing fortunes.

“Shore Gold is in a bit of a jam. I think they’re blocked out for this cycle for the time being,” he said in an interview.

The biggest problem for the company is the whopping $2-billion its Star-Orion South diamond project will cost to build. Given that it is a super-sized open pit project in Western Canada, where the company will be competing for skills with burgeoning oil, potash and uranium sectors, cost inflation is likely.

Star-Orion South would be Saskatchewan’s first diamond mine, with Shore Gold in a race to find funding before the planned construction start date in the third-quarter. The mine is set to produce an average 1.72-million carats yearly, starting in 2017.

In March, the company took the drastic step of cutting its headcount by around one-third to 15 people in a bid to conserve cash.

The TSX-listed firm said at the time it had been in advanced talks with a potential partner, before the European debt crisis came along and derailed the deal.

Mountain Province, which has diamond giant De Beers as a partner at its Gahcho Kué project in the Northwest Territories, and Stornoway, boasting the Quebec government as a 25% shareholder, are, perhaps, not faced with such an uphill battle.

“For projects with shorter payback periods the prospects of raising money are probably going to be a little easier,” BMO Capital Markets analyst Edward Sterck said in an interview, adding that having a strong joint venture partner would also greatly assist.

Gahcho Kué is set to start producing in 2014, at a capital cost of C$600-million – though Mountain Province’s share, with its 49% ownership, sits close to C$300-million.

The project, located 280 km northeast of Yellowknife and 80 km east of De Beers’ existing Snap Lake mine, will produce around 4.5-million carats yearly, with pre-construction work underway this year.

Stornoway’s Renard project, which would be Quebec’s first diamond mine, has a higher capital figure of $800-million, and will produce an average 1.7-million carats yearly, according to the results of a feasibility study the company announced in November 2011.

First output is pencilled in for 2015.

Both Stornoway and Mountain Province outlined plans this month to start spending millions of dollars on predevelopment at thier projects.

OFFTAKE

Where will these companies likely find the money to build their mines?

Indian cutting and polishing centres and large jewellery retailers, Sterck said.

Diamond processing firms in India, particularly small and medium sized ones that are not De Beers sight holders, can find it difficult to get their hands on rough stones.

Providing financing to build either Stornoway’s or Mountain Province’s share of its mine in return for off-take could be of mutual benefit, he commented.

Indian cutters and polishers recently visited Canada scouring for opportunities to secure rough supply, as they also compete with an emerging Chinese industry.

Retailers such as US-based Tiffany’s have also in the past injected capital into diamond mines to get ensure supply.

Stornoway CEO Matt Manson told Mining Weekly Online in September the company would consider selling marketing rights to help fund Renard.

The other doors juniors should be knocking on are those of gold producers, said Brown.

Toronto-based Agnico-Eagle Gold already owns 10.8% of Stornoway, making it the second-biggest shareholder, and Canada’s number-three producer Kinross in 2009 bought into Harry Winston and took on part of its stake of the Diavik mine it owns with Rio Tinto.

Harry Winston subsequently bought the ownership back in two separate deals in 2010 and 2011.

Some gold companies have been looking to diversify into copper, such as leading producer Barrick, but the market has punished them for doing so. Diamonds, as a luxury good, may make more sense for investment, as long as gold miners “don’t bet the farm” on a deal, Brown commented.

Harry Winston itself has expressed interest in increasing its exposure to Canadian diamond production through investing in projects.

There are also other potential contenders.

“The dark horse is De Beers and Anglo American,” said Brown, referring to the deal whereby Anglo American agreed to buy the Oppenheimer’s 40% stake in the diamond giant for $5.1 billion.

“Obviously Anglo has an interest in increasing exposure to the sector.”

There has been speculation as to whether anti-trust authorities would allow De Beers to make diamond acquisitions, given its historical market dominance, though the dynamics have changed in recent years.

Russia’s Alrosa is now the biggest-volume diamond producer, while De Beers holds the title of being the biggest producer by value.

“De Beers is not, and never has been, prevented from buying producing diamond assets by the EU anti-trust laws,” spokesperson Lynette Gould told Mining Weekly Online in March. That implied the company could also snap up development projects.

Another significant factor in the market is that global mining gargantuans Rio Tinto and BHP Billiton have announced they are looking to sell their diamond mines, as they are too small compared to their other divisions.

Rio owns 60% of the Diavik mine and BHP 80% of Ekati, also located near Yellowknife.

Neither sale would likely sap capital from the juniors hoping to build their mines in Canada, Sterck and Brown said.

“I think there are different kinds of buyers [for Ekati and Diavik],” commented Brown.

Source: Creamer Media Reporter

Friday, May 25, 2012

Rio's Zimbabwe spin-off covets Murowa diamond mine

Zimbabwe's RioZim Limited has opened talks with Rio Tinto in a bid to take full control of the Murowa diamond mine as the global mining major seeks to leave the gem business, a key shareholder said on Thursday.

Rio Tinto has a 78% stake in Murowa, a diamond mine which produced 324 000 ct in the last financial year, while RioZim controls 22% of the mine.

Locally-owned RioZim was created in 2004 when Rio, the world's third largest miner, largely left Zimbabwe while retaining its diamond interest.

RioZim is keen to exercise its pre-emptive rights to acquire Rio Tinto's shares in Murowa, Harpal Randhawa, whose private equity group Global Emerging Markets (GEM) recently bought 25% of the Zimbabwean firm, told an investment conference in Harare.

"We're now in discussions with Rio Tinto to acquire the 78% of Murowa that they want to offload," Randhawa said.

Rio Tinto signalled its intention to leave the diamond industry in March, effectively inviting bids for its $1.2-billion diamonds business, which also includes two other mines in Australia and Canada.

Randhawa, who said only time would tell if his group's decision to invest in RioZim was "either brave or stupid," said the firm was compliant with Zimbabwe's empowerment law as it was 54% controlled by locals.

President Robert Mugabe is championing a law that seeks to transfer at least 51% shareholding in foreign firms, including mines and banks, to locals.

Several foreign firms, including the world's two largest platinum miners, Anglo American Platinum and Impala Platinum are in talks with the government over plans to turn over majority stakes in their local operations to Zimbabweans.

"The main constraint that indigenisation [as the empowerment policy is called in Zimbabwe] has put on any company is a capital constraint due to the limited ability of locals to inject capital," Randhawa said.

RioZim, which is battling to clear a $50-million debt owed to local banks, badly needs to recapitalise its gold mines and develop its substantial coal and chrome concessions.

Source: Reuters

Monday, May 7, 2012

Noble Mineral Exploration Inc. commences diamond drilling on the lucas gold target

Noble Mineral Exploration Inc. (the "Company," "Noble" or "NOB") (TSX-V:NOB, FRANKFURT: NB7, OTC.PK:NLPXF) is pleased to announce the commencement of the diamond drilling campaign on the Lucas Gold Target, Project 81, Lucas Township, Timmins Area, Northern Ontario, Canada. The programme is designed to test over a 700m strike length of the mineralized structures outlined by a recently completed IP Survey and Airborne Differential Magnetic, VLF, TEM and Radiometric Surveys over the target area.

A program totalling six (6) NQ size diamond drill holes for approximately 3800m has been designed for this preliminary drill campaign in order to confirm results of earlier drilling dating back to 1960-1980s by Canico, McIntyre Porcupine Mines Ltd, and Abitibi Price Resources on the Lucas Township Gold Target. Historical non 43-101 compliant results have been previously released by the company in earlier releases dated Dec. 01, 2011 and Dec. 05, 2011. The drill program is also designed to follow Airborne Gradiometer Magnetic, VLF, Radiometric, and TEM surveys completed in late 2011, (NR Dec 5. 2011) and a 45km IP survey over a 1500m by 3000m grid at 100m line spacing in early 2012 (NR Jan. 12, 2012) completed by NOB earlier this year.

About Project 81:
Project 81, the Company's flagship project, is a 72,218-hectare (187,381 acres) patented and staked land package divided into 2 blocks. The patents include surface, mineral and timber rights, and host a significant timber resource plus a number of zones that have historical exploration identifying nickel and gold mineralization (these sample results are historical and non 43-101 compliant) from work carried out in the 1960s and 1970s, which have been confirmed by recent assay results from the current, ongoing drill program.
Michael Newbury, P. Eng. (ON), a "qualified person" as such term is defined by National Instrument 43-101 and a Director of Noble, has verified the data disclosed in this news release, and has otherwise reviewed and approved the technical information in this news release on behalf of Noble. Core logging and sample regime protocol are being carried out by Geologist Howard Lahti, PhD., P.Geo. (NB), while all field activities are under the direct supervision of Randy Singh, P.Geo. (ON), P.Eng. (ON), VP- Exploration & Project Development.

SOURCE Noble Mineral Exploration Inc.

Friday, May 4, 2012

Stornoway gets another $20m, this time in debt

Stornoway Diamond Corp, wanting to build Quebec’s first diamond mine, has secured a $20-million loan from its biggest shareholder, Diaquem, and development capital funds Fonds de solidarité FTQ runs, the TSX-listed junior said on Friday.

Stornoway, which in April raised a similar amount in a share sale, said it would put the money into pre-development work at the Renard project, including detailed engineering and ordering long-lead mining equipment.

“We are particularly pleased to be able to announce the support of the Fonds in the development of the project, and the continued support of our major shareholder, Investissement Quebec,” Stornoway CEO Matt Manson said in a statement.

Investissement Quebec is the province’s investment vehicle, and owns 25% of Stornoway.

“Our objective is to continue to move Renard ahead on schedule as we work to complete project permitting and senior project financing,” Manson added in a statement.

While the debt facility avoided significant equity dilution, which he said was “respectful of shareholder value”, it did come attached with 15-million share purchase warrants for the lenders.

Each warrant allows the owner to buy a Stornoway share for $1.21 up to five years after the deal closes. That’s a 40% premium to the 20-day volume weighted average price of the stock on the TSX before the deal was announced on Friday.

Stornoway plans to start building Renard in August next year. The mine will produce an average 1.7-million carats yearly, at a capital cost of around C$800-million, according to the results of a feasibility study the company announced in November.

Monday, April 30, 2012

Rio Tinto reviews options for future of its diamond business

Rio Tinto has begun a strategic review of its diamond business that will include exploring a range of options for potential divestment of its diamond interests.

Rio Tinto operates three diamond mines, Argyle in Australia (100 per cent interest), Diavik in Canada (60 per cent interest), and Murowa in Zimbabwe (78 per cent interest), as well as Bunder, an advanced diamonds project in India (100 per cent interest).

Harry Kenyon-Slaney, chief executive Diamonds & Minerals, said “We regularly review our businesses to ensure they remain aligned with Rio Tinto’s strategy of operating large, long-life, expandable assets.

“The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. We have a valuable, high quality diamonds business, but given its scale we are reviewing whether we can create more value through a different ownership structure.

“This process may take some time. We’re committed to keeping stakeholders informed about any key developments, and in the meantime are reassuring employees and the governments in the states and countries where we operate that it is very much business as usual.”
About Rio Tinto Diamonds

Rio Tinto operates a fully integrated diamonds business from exploration through to sales and marketing. It is one of the world’s major diamond producers through its 100 per cent control of the Argyle mine in Australia, 60 per cent of the Diavik mine in Canada, a 78 per cent interest in the Murowa mine in Zimbabwe. These three mines allow Rio Tinto to produce the full range of diamonds for all market segments. Rio Tinto also has an advanced diamond project, Bunder, in India.

Rio Tinto’s share of the production from its three operating diamond mines is sold through its sales and marketing headquarters in Antwerp, with representative offices in Mumbai, Hong Kong and New York. It also operates a niche cutting and polishing factory in Perth for the rare pink diamonds from its Argyle mine. Rio Tinto is a leading supporter of the Kimberley Process as well as a founding member of Responsible Jewellery Council. Website:

www.riotintodiamonds.com.

Source: Rio Tinto

Tuesday, April 24, 2012

Diamond Offshore announces first quarter 2012 results

Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the first quarter of 2012 of $185.2 million, or $1.33 per share on a diluted basis, compared with net income of $250.6 million, or $1.80 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2012 were $768.6 million, compared with revenues of $806.4 million for the first quarter of 2011. The sale of the jack-up rig Ocean Columbia was completed during the quarter, resulting in an after-tax gain of approximately $16 million, or $0.12 per share.
“Our ongoing efforts to control costs and maximize operating efficiency, expressed in terms of minimal rig downtime, enabled us to achieve favorable operating results for the quarter,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our systems and employees continue to perform for our customers and shareholders.”

“Looking ahead, we are optimistic about future contracting opportunities for our fleet, given the continuing market strength in the offshore drilling industry,” noted Dickerson.
CONFERENCE CALL
Diamond Offshore will host a conference call to discuss first quarter results on Thursday, April 19, 2012 beginning at 9:00 a.m. CDT. A live webcast of the call will be available online on our Company’s website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 800-247-9979, or 973-321-1100 for international callers. The conference ID number is 65195830. An online replay will also be available on www.diamondoffshore.com following the call.
Source: Business Wire

Wednesday, April 18, 2012

Rio Tinto, Harry Winston on track for 24% boost to Diavik diamond production

Harry Winston outlined stronger quarterly diamond production at the Diavik mine in the Northwest Territories as Rio Tinto continues to review ownership options

HALIFAX, NS - Harry Winston Diamond (TSX: HW, NYSE: HWD) and its mining partner Rio Tinto look to be on track to churn out 8.3 million carats in 2012 at their co-owned Diavik diamond mine - or about 24 percent more than in 2011 - according to the latest Diavik production figures.
In the first quarter 2012, Harry Winston, which owns 40 percent of the Diavik mine, said the mine's production grew 19 percent over the same quarter a year ago to 1.6 million carats, owing largely to a boost in recovered carats from reprocessed ore. The reprocessed ore accounted for 0.08 million carats of the quarterly diamond output.

The higher quarterly production put the diamond partners on pace with Diavik guidance for 2012: 8.3 million carats as compared to 6.7 million carats in 2011.
During the quarter diamond grades improved to 3 carats per tonne from 2.8 carats a tonne a year ago and edged the partners closer to grades as defined in proven and probable reserves. At last count Rio Tinto and Harry Winston said Diavik held 19 million tonnes @ 3.1 carat per tonne for 59 million carats in proven and probable reserves.

Meanwhile, based on the latest production figures published by Harry Winston on Tuesday morning, Diavik diamond prices held more or less steady.
Still up in the air is the question of what will become of Rio Tinto's majority interest in the Diavik operation. Rio Tinto, which owns 60 percent of the Diavik mine, said earlier this year it was considering what to do with its diamond assets, which includes diamond mines in Australia and Zimbabwe.

These, it has been reported by the Sunday Times and in these pages, might be combined with BHP Billiton's diamond assets - also under review - to form one of the world's largest diamond producers.

Monday, April 16, 2012

Gem Diamonds expects prices to keep rising

Rough diamond prices were expected to continue climbing “across the market” this year, London-listed Gem Diamonds said on Monday.

In an interim management statement, the company said that its price index showed increases in every sale since the September 2011 market correction. The index was up by 7% for the year.

The miner, which has two producing mines – the Letšeng mine in Lesotho and the Ellendale mine in Australia – as well as the Ghaghoo mine currently in development in Botswana, said Letšeng exceeded expectations, growing carats recovered and grade in the year to date.

“28,114 carats were recovered at Letšeng during the first quarter of 2012, up 5.9% from the first quarter of 2011. In addition, the recovered grade at Letšeng during the quarter was up 10.6% on the first quarter of 2011,” reported the company.

The Gem board approved Project Kholo in November last year, which will increase Letseng’s production through the construction of a third processing plant. Output is planned to be ramped up to a 10 tonnes per year by July 2014 from the current 5.7 million tonnes a year.

Gem Diamonds holds a 70% shareholding in Letšeng, with the King of Lesotho holding the remaining 30%. Operated by De Beers from 1977-1982, Letšeng reopened operations in 2004 and was acquired by Gem Diamonds in late 2006 for US$118.5 million.

In October last year, reported that Gem sold the world’s 14th largest white diamond discovered at Letšeng two months before for $16.5 million in cash. Gem will also share in the profit of any polished diamond cut from the 550 carat Letšeng Star.

Without the occasional large diamond find, the Letšeng pipe would probably be a marginal deposit, but the mine, 30% owned by the King of Lesotho, has also yielded the 478 carat Light of Letšeng that went for $18.4 million in 2008 and two other big rocks.