Diamond Sector PercolatingLooks like the diamond sector - like the gold miners - is rebounding with the current strong rally. Rough diamond prices have gone up nicely in the last few weeks. Producers like De Beers, DDC, LUC and SWY (startup late 2016) and Gahco Kue are hitting their strides, and junior DVI is up pending sampling results. The steep drop in Canadian dollar is helping the diamond miners' bottom line.
U2 exploration negotiations with ATT FN are ongoing - close but no cigar just yet. Dominion (DDC) now models the value of Jay diamonds larger than a 1.0-millimetre cut-off at between $53 (U.S.) and $58 (U.S.) per carat. DDC puts the discounted net present value @7% (NPV) of Jay at $610-million (U.S.) after taxes, based on a $657-million (U.S.) mine plan. Previously, on the "quick and dirty" estimation, I put U2's 8% NPV at $500 million (U.S.) after taxes, based on $100 -million mine plan (assuming Victor processing plant is bought out by MTX for $20-million). While Jay has huge tonnage, U2 which is similar to Victor's (based on world-renowned Antwerp diamond expert ) has the highest carat value in the world at around $400 (U.S.) per carat. The bulk sample should bear that out.
A year ago, MTX spent close to all of its exploration budget on the Moroccan diamond prospect. A container of sample rocks will arrive in Kelowna next week. Chuck would not have shipped the rocks all the way from Morocco unless they found excellent indicator minerals there.
As for the Quebec diamond sample, the results should be announced shortly. Chuck personally raised $650,000 for exploration on this project during last year.
We all know Chuck is secretive, and keeps things close to his vest. I won't be surprised if the stock pops big with news forthcoming.