RE: Supply Shortage Biggest Challenge...good find bishop....
same thing happening with Harry Winston..... substantially lower carat production figures yet substantially higher profits..... this indicates a perfect storm for the diamond industry is nearby.....
If I was Rio, HW or Debeers i would be buying up ANY potential near term producers at these share price levels..... why wait for them to deliver feasibility studies and buy them for a dollar a share when you can buy the 5 best for an average of 20c a share right now....???
If 1in 5 succeeds (say one from DOR, DDN, SL, SWY, VAA for example - others may suggest a different basket) you make billions...... the producers are about to roll the dice - if they have any sense whatsoever....... the risk reward ratio for majors to drive consolidation is just too compelling for it not to happen...
if they snooze, private equity players and vulture funds will try and take these diamond juniors out.... and make a fortune in the process.....
luckily DOR are nicely cashed up and would be best advised to husband the money well...... no point in spending rashly and then having to raise additional funds to pay for day to day operations...... thats jsut asking to be raped....
lets hunker down for the moment and ride out the storm