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Diamonds North Resources Ltd V.DDN



TSXV:DDN - Post by User

Comment by propertymadon Jul 03, 2008 8:32am
356 Views
Post# 15252713

RE: Calling Rockingeo

RE: Calling Rockingeorockingeo,

thanks for your post outlining the impact of crystal (habit) shape on rough stone valuations..... I have taken the liberty of posting it on the SL board where a similar post about rough diamond valuation was made recently by Heavymoney.... see below

If someone would offer us a 5 carats rough diamond, for example, stone structure, VS2 and G colour.
  The stone structure we will yield approximately 50 percent of the finished diamond:
5 carats (rough) x 0.50 (50 %) = 2.50 carats (polished).
  If we decide to cut the octahedron in half to yield two equal finished stones:
2.50 carats ÷ 2 = 1.25 carat (for each polished diamond).
  The Rapaport value for a 1.25 carat, VS2, and G colour is US$2,500/carat:
2,500 x 1.25 = US$3,125 (for each stone).
  This type of stone will yield 2 X 1.25 carat stones:
US$6,250 (3,125 x 2).
  We will discount the Rapaport value by 40 percent to obtain the wholesale market price:
1.25 x 2,500 x 0.60 (- 40 %) = US$1,875 (for one diamond), total US$3,750 (for two polished diamonds).
  To obtain our purchase price for this rough diamond of 5 carats, it is necessary to apply a percentage which will correspond to our profit margin (on average it is best at 50%):
3,750 x 0.50 = US$1,875 (this is our purchase price for this rough diamond).
  The purchase price per carat for this rough diamond is:
1,875 ÷ 5 carats = US$375 per carat.
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