From Will PDiamond Corp. (DDC), up 27 cents to $16.83 on 1.44 million shares, revealed this week that for the past month it has been dealing with a possible $13.50 (U.S.) takeover bid. That news propelled Dominion's stock, barely $11 in early March, as high as $17.21 today. Meanwhile, Dominion is rumoured to be in talks regarding a possible merger with Matt Manson's Stornoway Diamond Corp. (SWY: $0.95). While neither company is commenting on the rumours, which Reuters attributed to unnamed "people familiar with the matter." Stornoway's stock has also been moving thanks to the speculation, rising from 82 cents in early March to a high of 99 cents this week. At first glance it might appear to be a whale about to swallow a minnow, as Dominion is the world's third-largest producer of diamonds while Stornoway has just opened a much smaller mine in Northern Quebec. Nevertheless, Dominion's $1.1-billion market capitalization in early January was not much higher than Stornoway's $900-million valuation. Further, Dominion is currently seeking a new chief executive officer and Mr. Manson is rumoured to be a potential replacement, especially if the two companies were to merge. If so, it would be Mr. Manson's second big jump since he left his job as vice-president of marketing and technical services of what is now Dominion in 2004 to become CEO of a tiny diamond junior, Contact Diamond Corp. In 2007, he became president, and later CEO, of the much larger Stornoway, after that company and little Contact completed a three-way merger with Ashton Mining of Canada Inc. Mr. Manson has done well as Stornoway's CEO, arranging a $946-million financing for the company's Renard mine, then bringing the project to production significantly under budget and ahead of schedule, managing to promise small and deliver big along the way. A Dominion/Stornoway combination would be intriguing, as both companies have a lot of diamonds and together they would be big enough to scare off most hostile bidders. Dominion has an indicated resource of 164.5 million carats at the Ekati mine, most of them indicated, with over 62 million carats remaining at its 40-per-cent-owned Diavik mine. The latter mine is projected to close by 2023 unless new diamond discoveries are made, but Dominion expects to keep mining diamonds at Ekati well into the 2030s, once it builds the $650-million open-pit mine at Jay. Meanwhile, Stornoway's diamond potential extends far beyond its 22-million-carat reserve. The company's full resource estimate includes 30.2 million carats indicated and another 13.4 million inferred, with between 33 million and 71.1 million additional carats deemed a target for further exploration. In all, Stornoway's carat count at its 100-per-cent-owned Renard mine could t....