2023-02-15 18:50 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score for Wednesday was a poor 77-105-128 as the TSX Venture Exchange rose three points to 623. Grenville Thomas and Ken Armstrong's North Arrow Minerals Inc. (NAR) closed unchanged at seven cents on 19,000 shares. The company, a 15-center a year ago amid mild enthusiasm for a bulk sample of its Q1-4 kimberlite at Naujaat in central Nunavut, sagged to three sad cents by the end of last year. Word of a new lithium project near Yellowknife spiked North Arrow's chart to the 10-cent mark late in January, but the stock is struggling to hold its gains.
Investors were mildly enthused with word of North Arrow's acquisition of the DeStaffany project, and while the company is eager to get to work there, it is not abandoning diamonds. Mr. Armstrong, president and chief executive officer, says that he and his crew "have been focused on diamond exploration for going on 10 years now, and we are good at it."
While Mr. Armstrong is pleased North Arrow has exposure to lithium -- "arguably the hottest commodity in the market" -- he enthuses that while diamonds are the most out of favour commodity, they "are poised for a significant turnaround." Mr. Armstrong has been cheering a common refrain heard while on the promotional hustings the past few months -- that "the best time to invest is when a commodity or sector has the least amount of interest -- and that is diamonds right now."
Having warmed to the promotional challenge, Mr. Armstrong throws caution to the wind, gushing that the market appetite for diamonds "does not match the reality of the diamond business, which is now the healthiest it has been in the last 10 to 15 years." (It is in one aspect -- rough diamond prices are just off their all-time high and are currently higher than they have been any time in the past decade.)
Mr. Armstrong's enthusiasm for the diamond sector "is really rooted in the fact that mines are making money because of the arrival of declining global production and increasing retail luxury jewellery demand." This is something that had been predicted for a long time, he concedes, "but it is finally happening, and it is happening now." And so, waving off the fact that while high, rough diamond prices are down over 12 per cent in the past year, Mr. Armstrong concludes with a flourish: "We need to find new diamond deposits."
While Naujaat is the company's flagship diamond project, a big bulk test will not occur this year for logistical reasons. The test will be a year -- maybe two -- away, and in the meantime, North Arrow will need to raise a lot of cash for the test unless its co-venturer, Peter Ravenscroft's Australia-based Burgundy Diamonds Ltd., chooses to increase its interest in Naujaat to 60 per cent from 40 per cent by paying for the test. For now, Mr. Armstrong waffles that he and his crew are "looking to forward plan for the next stage of exploration there."