NewswireAber hunts new diamond supply-street wire
by Will Purcell
Most investors now consider Aber Diamond Corp. a diamond producer and retailer, but the company still has an interest in diamond exploration. The company and Rio Tinto PLC continue to examine their large block of Diavik ground for new kimberlites worthy of inclusion into the mine plan. Aber also has a small interest in an old project that Peregrine Diamond Corp. brought back to life last year. Further, the company remains on the prowl for any new projects that could help supply its retail arm in the coming years.
The Diavik search
Aber's chief executive officer, Bob Gannicott, said the continuing exploration program at Diavik went through about $5-million last year. That effort failed to turn up anything economic. The Diavik partners planned mini-bulk tests of two kimberlites on the old Commonwealth portion of the property, about 20 kilometres east-southeast of the mine.
Mr. Gannicott said the partners would be busy with exploration in the coming months, working on the second year of a $10-million program. The amount seems modest in comparison with companies working on mini-bulk tests, but Aber's head since 1999 said the current exploration budget was "about as much as you could spend" on the property.
Diavik put much of its recent exploration effort into the existing kimberlites, looking to expand the contained resource through a more detailed delineation drilling program. That work did add new blocks of kimberlite to the resource, but the focus for this year will be somewhat farther afield.
New plays
With Diavik running beyond its original specifications and Harry Winston delivering retail profits ahead of schedule, Aber is looking for new opportunities. Mr. Gannicott said there was no reason to add another retail name to Aber's business. That leaves new mining opportunities as the likely focus.
"We are certainly interested in acquiring new sources of supply, of any characteristic," Mr. Gannicott said, adding that anything that would be able to supply the quality of goods needed by Harry Winston would be especially desirable. That would put the emphasis on larger stones, and diamonds of top quality.
Aber shed itself of most of its geological field expertise over the past several years, as it moved from grassroots exploration to production and retail. As a result, the company is not likely to be banging stakes of its own into the ground any time soon. The hefty Diavik profits leave the company with brimming coffers, and Aber would likely make any new mining forays by buying into an existing project. (like GGL)
Several advanced diamond projects lie scattered across Canada. Some could benefit from a timely investment by a well-heeled veteran, but Aber plans to be choosy. "We have not seen anything yet that causes us to write a cheque," Mr. Gannicott said.
If so, that would rule out an investment in the current crop of advanced projects, at least for now. As well, Aber's need for raw diamonds would appear to preclude an investment in any project that did not control the marketing rights to the diamonds.
In fact, Aber may have greater interest in getting into a new project at an earlier stage. Thanks to the many finds at Diavik and several of Aber's other old properties, the company has an excellent library of diamond size and value distribution data, and that gives the company an advantage in assessing early results. Mr. Gannicott said Aber's bounty of data gave it a better idea than most people about what good and bad finds would look like. As a result, he said Aber would be "more than happy to take a run at an early stage program."