Post by
oiltar on Apr 21, 2017 8:34am
No wonder
PGD as failed big time to attract a producer.
PGD will not be able to move the project further under these market conditions get better:
Will P on Stockhouse:
The latest sales data from Dominion Diamond Corp.(DDC: $16.44) are disquieting for both Mountain Province Diamonds Inc. (MPVD) and Matt Manson's Stornoway Diamond Corp. (SWY). Both companies should be revealing their sales statistics for new diamond mines within the next month. Mountain Province, up two cents to $4.46 on 280,000 shares, is well off its high of $7.18, set last September just after its Gahcho Kue mine in the Northwest Territories began producing diamonds. Stornoway, which added one cent to 83 cents on 5.70 million shares, had been as high as $1.34 last fall, as investors anticipated the company's first sale of diamonds from its big Renard mine in Quebec.
Both companies disappointed the market with their maiden sales. Stornoway sold 38,916 carats in November for $7.6-million, about $195 (U.S.) per carat, but to do so the company said it withheld "a quantity" of smaller and low-quality gems. Stornoway's vague reference to the withheld gems suggests that the quantity was large, as does the fact that six weeks before the sale began, the mine had already produced over 111,000 carats. (Unofficial reports suggested that Stornoway had offered 91,000 carats; if so, it pulled more than 50,000 of them off the table.) Had it allowed those stones to sell, Stornoway's average price might have dipped close to $100 (U.S.) per carat.
Mountain Province's first sale of diamonds from Gahcho Kue was perhaps bleaker. The company sold 49,420 carats in its January sale for $6.27-million (U.S.), or about $127 (U.S.) per carat. Unfortunately, Mountain Province had to withdraw 16,000 carats because there were no offers, or it deemed the bids too low. Worse, Gahcho Kue had produced 862,000 carats by the end of December, prompting questions as to why Mountain Province did not try to sell most of its 420,000-carat share of that haul.
Dominion's recent experience suggests why. James Pounds, its executive vice-president, said that the company's recent diamond prices had declined by an average of 7 per cent from those at the end of October. He added that while prices for larger, better quality diamonds were flat through that period, prices for smaller and cheaper goods were off about 25 per cent. He said, perhaps hopefully, that he expected demand for diamonds would return to normal in the second half of the year. Unfortunately, the new normal is nothing like the old normal, or at least the normal espoused by diamantaires and promoters over the past decade, when they were calling for rough diamond prices to relentlessly increase faster than inflation for years, and perhaps decades to come.
Stornoway offered some clues of what to expect when it rolled out its guidance for 2017 in February. Mr. Manson said that his company expected Renard's prices would average between $100 (U.S.) and $132 (U.S.) per carat this year, well below its March, 2016, estimate of $155 (U.S.) per carat. (The Dominion numbers suggest Stornoway is currently getting something near the lower end of that range, unless it is stockpiling a lot of lesser gems.) Mountain Province says it will offer its guidance later this spring, probably after it reveals its first quarter results next month. Meanwhile, Dominion's numbers point to current prices being 25 per cent to 40 per cent below its 2014 estimate of $138 (U.S.) per carat, unless there are some pleasant surprises yet to be revealed.
Comment by
Kidlapik on Apr 21, 2017 10:28am
Impacts of Indian de-monetization, according to De Beers this is about worked out. De Beers had its biggest sale in over a year this January. https://www.mining.com/diamond-market-regaining-sparkle-debeers-sales/