Post by zoinkers on Feb 22, 2005 4:49:36 GMT -5
From the article....Boyd said:
"The frequency of discoveries is not keeping up with the market consumption. There will be a supply squeeze at some point in the future."
Ashton's kimberlite exploration sparkles
By: Dorothy Kosich
Posted: '20-FEB-05 23:00' GMT © Mineweb 1997-2004
RENO--(Mineweb.com) Ashton Mining of Canada Inc. President and CEO Robert Boyd is a refreshingly honest diamond mining executive, the kind of low-key fellow who can sit next to a mining journalist for nearly two hours at a luncheon and, mercifully, not hype his company.
Then again, Boyd does not need to glad-hand. When it comes to Ashton (ACA), its exploration success in Canada speaks louder than words.
Ashton has been instrumental in the discovery of three new Canadian diamond districts including Buffalo Heads Hills in Alberta, the Otish Mountains in Quebec, and Coronation Gulf in Nunavut. The Vancouver-based junior discovered 69 kimberlites in 11 years, 70% of which are diamond-bearing kimberlites. A number of these kimberlites have been submitted to mini-bulk or bulk sampling processes.
Ashton's most advanced project is the Foxtrot property in Quebec where the company just completed a 660-tonne bulk sample, now up to 430 carats of diamonds, 25 of which are more than one carat in size. Two of the recovered diamonds were larger than 4 carats each. In 2004 Ashton and its 50/50 joint venture partner Soquem completed an $18-million bulk sampling and exploration program of the Renard cluster on the property.
"Once you have a diamond discovery, you move very quickly into taking large samples to understand your rock value before you move into resource definition-type activity," Boyd explained, adding that Ashton is preparing to obtain an independent valuation of these diamonds by visiting the marketplace in Antwerp. Every kimberlite that has diamonds has a high percentage of small diamonds and a very low percentage of larger diamonds. The unit value of diamonds per carat goes up exponentially with their size.
THE BUSINESS OF DIAMONDS
Worldwide, the rough diamond industry sales are about $9 billion annually, which converts to $60 billion in jewelry sales. The most capital intensive aspects of diamonds are the mining and jewelry components of the business. The intermediate parts of the business are trading-oriented.
The market is effectively consuming the yearly production of one BHP Billiton Ekati-sized (4-million to 5-million carats) diamond mine annually, according to Boyd.
"The frequency of discoveries is not keeping up with the market consumption. There will be a supply squeeze at some point in the future."
Canada is the third largest diamond-producing country in the world, after Botswana and Russia. "We produce more rough diamonds by value now than South Africa and Angola," he said. "Canada has the potential of growing because most of the feasibility and development-stage projects in the world for diamonds are in Canada right now." Boyd estimated there are seven or eight development, ore-feasibility or feasibility-stage projects internationally of which five are located in Canada.
During the post-Bre-X winter of mining exploration, as equity markets dropped for metals exploration, they also declined for diamond exploration. "We started to come out of the hole in 2001," Boyd recalled. "We have been able to finance relatively well since that period."
Exploration successes, including those of Ashton Mining, have helped to stimulate the diamond exploration business. However, Boyd suggests that, in the past year, junior diamond players in Canada are being eclipsed by gold, base metal, and uranium exploration companies. Nevertheless, he added, "there does not seem to be any problem in us getting financing."
Ashton was formed in 1993 by Ashton Mining, Ltd. of Australia, a company that was acquired in 2000 during a hostile bidding process by Rio Tinto. As a result, Rio Tinto owns the whole of of the Argyle mine in Australia and acquired the majority shareholding (currently 52 percent) in Ashton. "They manage us as an equity investment rather than a directly managed subsidiary," Boyd explained. Dr. David S. Robertson, Chairman of Ashton's board, is a familiar name in gold mining circles. He recently chaired Meridian Gold's board and has served on Placer Dome's board.
"Sightholders," who include the manufacturers of polished diamonds and dealers of rough diamonds, meet once every five weeks, ten times a year, to inspect their diamond allocations in the London offices of De Beers at 17 Charterhouse Street. Payment for the "sight" is in advance of the delivery of the rough to the sightholder. It is estimated there are 120 sightholders, the majority of whom are from international diamond cutting setters.
The Diamond Trading Company (DTC) is the part of the De Beers Group responsible for sorting the rough diamonds (from all over the world) into some 16,000 categories (shape, size, quality and color); valuation; and, then, marketing and selling the rough diamonds. DTC uses a "site sale" to offer these uncut rough diamonds for sale to sightholder diamond manufacturers.
Boyd said that " different sources say diamond prices themselves went up between 15% and 22% last year alone. DTC put up their sight prices 3% already in the first sight the second week in January. Prices are already starting to escalate for 2005."
Diamonds are very much driven by demand, Boyd explained. "In the Asian market, Japanese demand is coming back in the polished stone business. The Chinese demand is increasing for diamonds just like it is for every other commodity. The U.S. market still consumes approximately 50% of the diamonds in the world."
Meanwhile, the on-going diamond exploration boom in Canada has attracted 200 junior companies. Nevertheless, Boyd claimed "there are not a lot of people that can rack up against us in terms of exploration capabilities and kimberlite discovery success. Outside of the Lac de Gras district in Canada, we're only exceeded for the discovery of kimberlites by DeBeers."
[Continued next window]
"The frequency of discoveries is not keeping up with the market consumption. There will be a supply squeeze at some point in the future."
Ashton's kimberlite exploration sparkles
By: Dorothy Kosich
Posted: '20-FEB-05 23:00' GMT © Mineweb 1997-2004
RENO--(Mineweb.com) Ashton Mining of Canada Inc. President and CEO Robert Boyd is a refreshingly honest diamond mining executive, the kind of low-key fellow who can sit next to a mining journalist for nearly two hours at a luncheon and, mercifully, not hype his company.
Then again, Boyd does not need to glad-hand. When it comes to Ashton (ACA), its exploration success in Canada speaks louder than words.
Ashton has been instrumental in the discovery of three new Canadian diamond districts including Buffalo Heads Hills in Alberta, the Otish Mountains in Quebec, and Coronation Gulf in Nunavut. The Vancouver-based junior discovered 69 kimberlites in 11 years, 70% of which are diamond-bearing kimberlites. A number of these kimberlites have been submitted to mini-bulk or bulk sampling processes.
Ashton's most advanced project is the Foxtrot property in Quebec where the company just completed a 660-tonne bulk sample, now up to 430 carats of diamonds, 25 of which are more than one carat in size. Two of the recovered diamonds were larger than 4 carats each. In 2004 Ashton and its 50/50 joint venture partner Soquem completed an $18-million bulk sampling and exploration program of the Renard cluster on the property.
"Once you have a diamond discovery, you move very quickly into taking large samples to understand your rock value before you move into resource definition-type activity," Boyd explained, adding that Ashton is preparing to obtain an independent valuation of these diamonds by visiting the marketplace in Antwerp. Every kimberlite that has diamonds has a high percentage of small diamonds and a very low percentage of larger diamonds. The unit value of diamonds per carat goes up exponentially with their size.
THE BUSINESS OF DIAMONDS
Worldwide, the rough diamond industry sales are about $9 billion annually, which converts to $60 billion in jewelry sales. The most capital intensive aspects of diamonds are the mining and jewelry components of the business. The intermediate parts of the business are trading-oriented.
The market is effectively consuming the yearly production of one BHP Billiton Ekati-sized (4-million to 5-million carats) diamond mine annually, according to Boyd.
"The frequency of discoveries is not keeping up with the market consumption. There will be a supply squeeze at some point in the future."
Canada is the third largest diamond-producing country in the world, after Botswana and Russia. "We produce more rough diamonds by value now than South Africa and Angola," he said. "Canada has the potential of growing because most of the feasibility and development-stage projects in the world for diamonds are in Canada right now." Boyd estimated there are seven or eight development, ore-feasibility or feasibility-stage projects internationally of which five are located in Canada.
During the post-Bre-X winter of mining exploration, as equity markets dropped for metals exploration, they also declined for diamond exploration. "We started to come out of the hole in 2001," Boyd recalled. "We have been able to finance relatively well since that period."
Exploration successes, including those of Ashton Mining, have helped to stimulate the diamond exploration business. However, Boyd suggests that, in the past year, junior diamond players in Canada are being eclipsed by gold, base metal, and uranium exploration companies. Nevertheless, he added, "there does not seem to be any problem in us getting financing."
Ashton was formed in 1993 by Ashton Mining, Ltd. of Australia, a company that was acquired in 2000 during a hostile bidding process by Rio Tinto. As a result, Rio Tinto owns the whole of of the Argyle mine in Australia and acquired the majority shareholding (currently 52 percent) in Ashton. "They manage us as an equity investment rather than a directly managed subsidiary," Boyd explained. Dr. David S. Robertson, Chairman of Ashton's board, is a familiar name in gold mining circles. He recently chaired Meridian Gold's board and has served on Placer Dome's board.
"Sightholders," who include the manufacturers of polished diamonds and dealers of rough diamonds, meet once every five weeks, ten times a year, to inspect their diamond allocations in the London offices of De Beers at 17 Charterhouse Street. Payment for the "sight" is in advance of the delivery of the rough to the sightholder. It is estimated there are 120 sightholders, the majority of whom are from international diamond cutting setters.
The Diamond Trading Company (DTC) is the part of the De Beers Group responsible for sorting the rough diamonds (from all over the world) into some 16,000 categories (shape, size, quality and color); valuation; and, then, marketing and selling the rough diamonds. DTC uses a "site sale" to offer these uncut rough diamonds for sale to sightholder diamond manufacturers.
Boyd said that " different sources say diamond prices themselves went up between 15% and 22% last year alone. DTC put up their sight prices 3% already in the first sight the second week in January. Prices are already starting to escalate for 2005."
Diamonds are very much driven by demand, Boyd explained. "In the Asian market, Japanese demand is coming back in the polished stone business. The Chinese demand is increasing for diamonds just like it is for every other commodity. The U.S. market still consumes approximately 50% of the diamonds in the world."
Meanwhile, the on-going diamond exploration boom in Canada has attracted 200 junior companies. Nevertheless, Boyd claimed "there are not a lot of people that can rack up against us in terms of exploration capabilities and kimberlite discovery success. Outside of the Lac de Gras district in Canada, we're only exceeded for the discovery of kimberlites by DeBeers."
[Continued next window]