| The diamond and specialty minerals stocks box score on Friday was a so-so 83-86-141 as the TSX Venture Exchange fell six points to 575. Rough diamond prices fell about 0.2 per cent this week, according to Paul Zimnisky's global rough diamond price index. The drop wipes out two weeks of lesser gains, leaving the index essentially flat since a seven-month-long decline flattened at the end of September. Mr. Zimnisky's index shows the pullback from a bubbly record high in mid-February now stands at 11.4 per cent, a decrease much like what happened in 2011, on the heels of a 21-month-long surge in rough diamond prices following the Great Recession collapse. The two rebounds were remarkably similar in duration and extent, pushing prices about 70 per cent above their nadirs. (Those bottoms were a challenge to quantify, as during both crashes the rough diamond market was essentially shuttered -- by a lack of buyers in early 2009 and by a COVID-driven lack of a market in 2020.) Diamond promoters, investors and miners are undoubtedly united in their hopes that the similarities do not continue moving forward, as the Great Recession collapse and subsequent bubble were followed by eight years of stagnation, with just modest movements in average prices at best. A similar pattern now could be more difficult to endure, as inflation is arguably quadruple what it was a decade ago. There are other issues that could affect rough diamond prices in the longer term. A big question today is what is happening with diamonds mined by Alrosa, Russia's state-owned diamond company. For months, Russian rough was getting to market by hook or by crook, although now, the West claims to have tightened its sanctions sufficiently to choke off the channels. Well perhaps, but even if true, those Russian gems are accumulating somewhere, and they will be available to flood the market once the Ukraine situation is resolved. In the meantime, the supply of rough beyond Russia appears sufficient to match demand lowered as the world's economy drifts into recession. None of this is particularly encouraging for companies looking to develop major diamond mines. One of those, Ewan Mason's Star Diamond Corp. (DIAM), was unchanged at 8.5 cents on 435,000 shares. The company's current market value, $40-million, is a sliver of the $1.5-billion that it had in 2007, when it was working with Newmont Corp. (NGT: $60.40) on the mammoth Fort a la Corne project in Saskatchewan. Newmont is long gone, its eventual replacement, Rio Tinto, appears destined to quit as well, and Star's indefatigable founder, Ken MacNeill, has just agreed to retire as president and chief executive officer. With production at the project about five years away even under the most optimistic of scenarios -- "never" also being a possibility -- rough diamond price predictions will figure prominently in any bankable studies. Some still hope Rio will rethink its exit, but if they do, if they don't, stay tuned either way -- just don't hold your breath. Ellerton Castor's Canada Carbon Inc. (CCB) was unchanged at seven cents on 2,000 shares. The company has updated its resource estimate for the Miller graphite project near Grenville-sur-la-Rouge in southwestern Quebec. The company now lists 3.34 million tonnes inferred at 0.75 per cent graphite and 10.48 million tonnes inferred at 0.72 per cent, which is good for a total of just over 100,000 tonnes of graphite contained within an optimized open-pit shell. This is 26 per cent more than the company cheered over five years ago, when it listed Miller with 2.65 million tonnes indicated at 0.8 per cent graphite and 7.56 million tonnes inferred at 0.77 per cent, a total of 79,400 tonnes. Mr. Castor, CEO, cheers the significant increase in the resource as enhancing the company's understanding of the mineralization. The new resource estimate, Mr. Ellerton says, will serve as the basis of future updates of the company's preliminary economic assessment. Further, he cheers, the larger resource will allow the company to "expand its potential universe of clients in the aerospace, defence and small modular reactor sectors. As well, the new calculation provides "an increased degree of flexibility in future pit design" -- critical given Canada Carbon's long-running battle with the locals about permitting the project. And the marble, you ask? The 1.5 million tonnes of architectural marble that a 2016 dream sheet projected would generate roughly half of Miller's projected revenue? Well, there is a change of plan. Mr. Castor says that the company "will reduce focus on any potential marble quarry operations and prioritize its ability to develop Miller's potential as a high-quality graphite deposit." In other words, forget the marble -- which will make updating the preliminary economic assessment a challenge. Trevor Walker's Frontier Lithium Inc. (FL) lost two cents to $1.97 on 258,000 shares. The company has drilled a 338-metre interval at its Spark pegmatite in Northwestern Ontario, averaging 1.64 per cent lithium oxide and modest amounts of cesium, tantalum, niobium, tin oxide and rubidium. Assays from three other holes also yielded promotable grades, but over shorter intervals. Garth Drever, vice-president of exploration, enthuses that Frontier is confident it has converted the required tonnage on the Spark pegmatite for an upcoming prefeasibility study, and has added new inferred rock to the west and at depth. Timothy Froude's Sokoman Minerals Corp. (SIC), down 1.5 cents to 24 cents on 114,000 shares, and Stephen Stares's Benton Resources Inc. (BEX), unchanged at 11 cents on 83,000 shares, have sampled up to 1.56 per cent cesium oxide, 0.4 per cent lithium oxide and 0.022 per cent tantalum oxide at their Golden Hope project in Newfoundland. This is, they cheer, the first high-grade hit of cesium oxide scored on the island. The dike is five to six metres wide and has so far been traced for about 100 metres along strike before it disappears beneath overburden in both directions. The new find is 12 kilometres northeast of the Kraken lithium discovery, which the two companies first cheered in March. That discovery hole yielded 1.76 per cent lithium oxide and subsequent tests produced 0.95 per cent lithium oxide over 8.4 metres in early summer, while a 20.82-metre encounter in mid-October averaged 0.6 per cent. Mr. Froude, Sokoman's president and CEO, enthuses that Golden Hope "continues to prove itself," adding that it has "evolved into a potentially significant host to many metals in high demand to power and build the new economy." Mr. Stares, president and CEO of Benton, applauded Golden Hope as it "continues to deliver exceptional new discoveries and results." He was "extremely excited and encouraged" that the partners have located new high-grade pegmatites and is confident that more will follow, as they continue with their aggressive exploration plans. |