World gem avg $300, SGF $1536 - WernerWerner, you stated: “I think the analytical community will be very surprised by the outcome of Stars valuations if they are "average" by world standards, and blown away if…above average.”
I have many pages of calculations before me and will summarize how Shore’s gem valuations can beat the world average all to hell. The world average as you posted is $300/ct, and one possible scenario that I outline below puts Shore’s gem values at $1536/ct, nearly FIVE times the world average.
To restate what you posted: “In fact, Star has consistently produced a ratio of 75% gemstones and 25% industrials, among the best results in the world. If you multply the afformentioned world 'gemstone only' average by this percentage, the resulting per carat valuation is $225. Interesting starting point huh? Add to this fact that the Star produces a 1ct stone every six or seven carats versus the norm of about 1 every 24 (i.e. four times better for the Star) and things get real interesting. Most of the value in any diamond parcel resides in the larger stones because of the geometric increase in value asscoiated with size. Impending valuation numbers could indeed be interesting when looked at in this light. The stones at Falc have exhibited both above average size distribution and percentage of gemstone parameters. This makes one wonder if the the relatively lower grade of the Falc deposits has not somehow manifested itself in unrealisticaly low expectations of value. With such an erroneously low (and logically unwarranted) sentiment, given what the Star has exhibited so Far (4.77ct flawless for instance) makes for very intersting speculation.
So here is my speculation:
I added up the total number of diamonds > 1.18 mm recovered to date = 12,514 diamonds.
Then I added up all the diamonds in the various size ranges and calculated their %:
>0.5 ct = 4.1% of total diamonds >1.18 mm in size
>1 ct = 1.6 %
>2 ct = 0.8%
>6 ct = 0.06%
>10 ct = 0.05%
Then taking an average sample of 10,000 diamonds from the Star Kimberlite (so far), you get:
< 0.5 ct = 9590 diamonds
> 0.5 ct = 410
> 1 ct = 160
> 2 ct = 80
> 6 ct = 6
> 10 ct = 5
Assuming that when they state in the news releases that they have 30 diamonds >1 ct and 12 diamonds > 2 ct, it actually means that there are 18 diamonds between 1-2 ct, and 12 diamonds > 2 ct, for a total of 30 diamonds > 1 ct. That makes for the following adjustment so as to put our diamonds into size ranges, and so we don’t count our diamonds twice:
0.5 – 1 ct = 250 diamonds
1 – 2 ct = 80
2 – 5 ct = 69
6-9 ct = 6
> 10 ct = 5
According to the news releases, the average percentage of diamonds classified as ‘white’ and of gem quality is 76%. So multiplying the above number of diamonds by 76%, we now have:
0.5 – 1 ct = 190 ‘white’ diamonds out of 10,000 diamonds
1 – 2 ct = 61
2 – 5 ct = 52
6 – 9 ct = 4
> 10 ct = 3
Now for the fudging and fun speculations. Taking George Read’s comment that half of the > 2 ct diamonds are octahedra, as well as the world ave. prices for gems from Crocky and Country Gent, as well as some of the info from nopoo’s chapters, I’ve assigned ‘uneducated’ value guesses to the following gems (assuming some are average quality, some better than avg, some flawless, some are octahedra, some are fragments):
0.5-1.0 ct range = 190 gems x $165/ct (world avg) = $31,350
1 – 2 ct range = 61 gems
30 (or half) x $300 (world avg) = 9,000
15 x $1,000 = 15,000 10 x $5,000 = 50,000
5 x $10,000 = 50,000
2 – 5 ct range = 52 gems
26 (or half) x $500 (world avg) = $13,000
18 x 2,000 = 36,000
7 x 10,000 = 70,000
1 x 40,000 = 40,000
6 – 9 ct range = 4 gems
3 x $1000 = 3,000
1 x 30,000 = 30,000
1 x 100,000 = 100,000
>10 ct range = 3 gems
1 x $10,000 = 10,000
1 x 50,000 = 50,000
1 x 250,000 = 250,000
This gives us a total value for these 310 diamonds of $757,350.
Total number of carats (assuming the mid-value for each range) = 493 carats
Value per carat = $757,350/493 = $1536/ct
Of course there is lots of room for playing with the values for the various gem sizes, but consider that these numbers may even be conservative if you have just one 30 carat flawless diamond worth….$1,000 000?
I’m hoping others will make corrections or adjustments to my figures to reflect something more accurate than my ‘guesswork’.