(Reuters) – Prices of rough diamonds are expected to rise this year after a turbulent 2011, driven by recovering consumer demand in the United States and a robust appetite for the gems in Asia, the head of the World Diamond Council (WDC) told Reuters on Monday.

Diamonds had a rollercoaster 2011, with a bumper first half followed by a steep drop in prices as markets unraveled over the summer months, despite the dearth of new mines, low inventories and Asia’s growing demand.

“Prices have been stabilizing and (are heading) towards going up again. Outlook seems to be bullish,” the WDC President Eli Izhakoff said in an interview on the sidelines of the annual meeting of the council, which represents diamond manufacturing and trading companies, held this year in northern Italy.

“I think the prices will end the year …higher,” Izhakoff said. He declined to give a more precise forecast.

Demand in the U.S., the world’s biggest consumer of polished diamonds, has been strong so far this year as the world’s biggest economy shows signs of recovery. Forecasts for demand in India and China are also very positive, Izhakoff said.

Asia’s growing appetite for diamonds has helped the sector offset weaker patches elsewhere and is key to several market debuts in the pipeline, not least the Hong Kong initial public offering of London-based high end jeweler Graff Diamonds. Graff will launch its $1 billion float this month.

Entrepreneur Beny Steinmetz’s Octea diamond operations, which include the Koidu mine in Sierra Leone, could brave stock markets later this year, most likely in Hong Kong to tap China’s love of luxury.

But Izhakoff said a question mark hung over demand in Europe, which is struggling to rein in the unfolding euro zone sovereign debt crisis. He added consumer demand in Europe was largely driven by tourists from Asia and eastern Europe while local demand is hit by austerity measures in many countries.

SECOND HALF OUTLOOK

The market expects more stable rough diamond prices in 2012, with an improvement in the second half after a slow start due to inventories built up by buyers when prices weakened.

“Our view is that, provided the leading producers are restrained in what they offer for sale and in the level of their prices, the second half of the year should see further improvement,” RBC Capital Markets said in a note on May 11.

“Looking through to 2013 and beyond we are more optimistic, though the economic turmoil in Europe will continue to weigh on sentiment,” the RBC capital Markets analysts wrote.

Diamond demand is expected to exceed supplies this year, giving a fundamental support to prices, but announced exits of major mining companies from diamond operations is unlikely to reduce supply of rough diamonds to the market, Izhakoff said.

Mining giants Rio Tinto (RIO.L) and BHP Billiton (BLT.L) have said they could sell their diamond units, putting, between them, four major diamond operations on the block – a huge number in an industry that gets most of its production from 20 or so mines, and where no large discovery has been made in 15 years.

Some analysts have said such exits could lead to a reduction of investment in diamond mining and hence to a reduction in supplies. But Izhakoff said he would expect any possible buyer of the mines to have enough funds to pump into production and keep supplies steady.

Sourced & published by Henry Sapiecha

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G & J Exporters hit by RBI Directive Already affected by the rising value of the rupee and slow demand from key markets like US and Europe, gem and jewellery exporters were further hit by the RBI’s directive to convert 50 per cent of foreign currency holdings in all types of Exchange Earner’s Foreign Currency (EEFC) accounts in to rupees.

The RBI move is part of its attempt to stabilise the rupee which dipped to a new low of 53.82 against the dollar this week, and will release an estimated $2.5 bn worth of foreign currency into the market.

While the RBI’s objective cannot be faulted, its methodology can be, particularly the lack of a differential approach towards the foreign currency balances held by different sectors.

Clearly industries dealing in commodities, like gems and jewellery, have different needs from sectors like IT that earn dollars through selling services overseas. Unlike the latter, the former need foreign currency to import fresh raw materials on a regular basis. This is all the more marked for g & j, since virtually all the raw materials are purchased overseas, and value addition is based on the skills of the people involved in the trade.

The exact modalities of ensuring payment flexibility for such sectors can be worked out, but a starting point could be the FIEO proposal, where the limit for sectors like gems and jewellery could be higher than the general limit, say 75 per cent as against 50 per cent for others.

Sourced & published by Henry Sapiecha

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Independent Valuation of Gahcho Kué Diamonds

Actual Price per Carat $185 – up 38%
Modeled Price per Carat $122 – up 41%

(All values are in US Dollars)

Toronto and New York, May 5, 2011 – Mountain Province Diamonds Inc. (“Mountain Province”, the “Company”) (TSX: MPV, NY-AMEX: MDM) today announced the results of an updated independent valuation of the diamonds recovered from the Gahcho Kué Project. The valuation was conducted by WWW International Diamond Consultants Ltd. and took place at the London offices of the Diamond Trading Company in early April, 2011. All diamond values presented below are based on the WWW Price Book as at April 11, 2011.

Importantly, for the first time, the Gahcho Kué diamonds were grouped into larger parcels, each parcel representing diamonds from the Hearne, Tuzo and the separate lobes of the 5034 kimberlite. In the opinion of WWW, grouping of the diamonds into larger parcels increased the accuracy of the diamond valuation.

Patrick Evans, Mountain Province President and CEO, said: “The results of this independent diamond valuation reflect the strong performance of rough diamond prices since the previous valuation conducted on April 2010. Based on the analysis of leading diamond producers and analysts, the global diamond industry will experience peak diamond supply during 2011, with burgeoning demand – particularly from the robust Chinese and Indian markets – outstripping mine supply. There is a strong probability that rough diamond prices will continue to experience strong double digit increases as production from aging mines decrease and new mine supply falls short of growing demand. As the world’s largest and richest diamond development project, Gahcho Kué is well placed to enjoy excellent diamond price support as it prepares for production”.

In their report to Mountain Province, WWW stated: “The most valuable stone is in the Tuzo sample. This 25.13 carat stone is the largest stone in all of the bulk samples. The stone is an octahedron of H/I colour which WWW valued at $20,000 per carat giving a total value of $502,600″.

WWW added: “The stone with the highest value per carat sample is a 9.90 carat stone in the 5034 C/E sample. This is a makeable stone of high colour (D/E) which WWW valued at $24,000 per carat giving a total value of $237,600″.

Commenting further, Mr. Evans said: “Experience shows that during the mining phase larger populations of large, high value diamonds are commonly recovered, which has the potential to improve modeled diamond revenues. Besides the high-value 25.13 and 9.9 carat diamonds referred to above, several other large high-value diamonds of gem quality have been recovered from Gahcho Kué, including 7.0 carat, 6.6 carat and 5.9 carat diamonds from the 5034 kimberlite and 8.7 carat, 6.4 carat and 4.9 carat diamonds from the Hearne kimberlite. The presence of coarser diamonds is an important driver of overall diamond value at Gahcho Kué.”

Table 2 below presents models of the average price per carat (US$/carat) for each kimberlite. The modeled price per carat is determined using statistical methods to estimate the average value of diamonds that will be recovered from potential future production from Gahcho Kué.

For mine feasibility studies WWW recommends using the base case models for defining the resources and reserves. The “high” and “low” models are included for sensitivity analysis.

The WWW averaged modeled price per carat for the Gahcho Kué kimberlites is $122, which represents a 41 percent increase over the WWW 2010 average price. The WWW models use size distribution models (carats per size class) developed by De Beers.

Mr. Evans added: “The 2010 independent definitive feasibility study, under which the revenue assumption was based on the mean average of the April 2010 WWW and De Beers modeled diamond prices, reported a 33.9 percent IRR excluding sunk costs. Further, sensitivity analysis shows that a 10 percent increase in modeled diamond prices results in an approximate 3 percent increase in the project IRR. Accordingly, the 41 percent increase in the modeled price over the past year would result in an approximate 12 percent increase in the project IRR.”

Qualified Person

This news release has been prepared under the supervision of Carl G. Verley, P.Geo., who serves as the qualified person under National Instrument 43-101.

Forward-Looking Statements

This news release may contain forward-looking statements, within the meaning of the “safe-harbor” provision of the Private Securities Litigation Reform Act of 1995, regarding the Company’s business or financial condition. Actual results could differ materially from those described in this news release as a result of numerous factors, some of which are outside the control of the Company.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Mountain Province Diamonds Inc.
Patrick Evans, President and CEO
Tel: 416-670-5114
401 Bay Street, Suite 2700
Toronto, Ontario M5H 2Y4
Phone: (416) 361-3562
Fax: (416) 603-8565
www.mountainprovince.com
E-mail: info@mountainprovince.com

Sourced & published by Henry Sapiecha

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Finding diamonds in Canada was, for many years, little more than a prospector’s hope. But with the discovery of diamonds in Nunavut in the early nineties, this hope became a reality that soon led to active exploration for the elusive gem throughout the country – specifically, on the Canadian Shield.

Canada became a diamond producer in October 1998, when the Ekati diamond mine opened about 300 kilometres northeast of Yellowknife. By April 1999, the mine had produced one million carats. And by 2003, the country became the world’s third largest diamond producer on a value basis, after Botswana and Russia.

Today, diamond exploration and discovery is undergoing a renaissance in Canada’s north that rivals the first wave of successful exploration. Most of the efforts are converging in Nunavut, the largest and newest territory of Canada.

Although the Canadian northern territories are not the easiest places in which to live and work, there are a number of junior and senior companies operating in these areas.  These companies have to deal with harsh climates, limited infrastructure and a very fragile environment. But as demand for minerals, particularly diamonds, continues to grow, both new and established operators are taking a more active interest in the region.

Peregrine Diamonds Ltd. is one of the protagonists of the new success story. The company revitalized the diamond exploration scene last year, by reporting a remarkable discovery of three major outcropping diamond-bearing kimberlites at its Chidliak property on Baffin Island.

Chidliak, located 150 km northwest of Iqaluit, the capital of Nunavut and the company’s earlier stage Nanuq project, located 300 kilometres north of Rankin Inlet in Nunavut, are both textbook cases of grassroots or greenfields exploration low-budget programs that were taking place while attention was focused primarily on DO-27.

The Chidliak program began in 2005, when BHP Billiton approached Peregrine with an offer to jointly explore southern Baffin Island. “The agreement was that, together, we would undertake a reconnaissance program that covered roughly the southern third of Baffin Island. We would fund it equally and then Peregrine would take the data and run with it,” says Peregrine President, Brooke Clements.

After the programs’ first year, during which the most promising properties were acquired, the funding responsibility fell to Peregrine alone, but BHP retained back-in rights.

Despite being discovered a year earlier than Chidliak, Nanuq is currently at about the same stage, for two reasons. Three kimberlite pipes have been found on each site, but those at Nanuq, while encouraging, do not offer the promising diamond counts seen in kimberlites tested at Chidliak. Future exploration work at Nanuq will be focusing on finding new pipes. Meanwhile, the work at Chidliak will be split between searching out new pipes and continuing to estimate the value of the one already known to hold diamonds.

A bit of luck also favoured Chidliak. “Usually, kimberlites are covered by soil and aren’t visible from the surface,” explains Clements. “But in the case of Chidliak, the sampling crew went to three promising sites and found not just indications of kimberlites, but outcroppings of the pipes themselves exposed on the surface. We were fortunate because we kind of jumped a year ahead of the normal sequence. Without drilling a single hole, we know we have diamonds and kimberlites with significant tonnage potential on the property,” he said of the significance of the outcroppings.

Clements describes the results as “exceptional,” and not just because the coarse diamond size distribution indicates potential for large commercialization of diamonds. Unlike most diamond-bearing kimberlites in northern Canada, which typically occur under lakes or are buried by overburden, the Chidliak kimberlites outcrop on the surface..

“It’s still early days but we’re very excited by the potential as we’ve identified more than 65 geophysical anomalies within the property,” says Clements.

Key Players

Until recently, Tahera Diamond Corporation was the best known name in Nunavut’s diamond scene. The company runs Jericho Diamond Mine, Canada’s third diamond mine and Nunavut’s first, located about 400 km (249 mi) northeast of Yellowknife, Northwest Territories.

Two and a half years after that high-profile startup, Tahera has abruptly ended production at the Jericho mine, forcing Prime Minister Stephen Harper and his government to take over.

Deloitte and Touche has since been appointed as receiver and contracted to undertake care and maintenance at the mine.

It is doubtful that a new owner will soon be found for Jericho.

Other companies currently exploring for diamonds in Nunavut are Indicator Minerals (Nanuq North, in a join venture with Peregrine Diamonds), Shear Minerals (Churchill), Diamonds North Resources (Amaruk) and Stornoway Diamonds (Aviat).

Stornoway, a Vancouver-based exploration company, is the dominant diamond explorer in eastern Nunavut and it has property stretching from the northern tip of the Melville Peninsula to Rankin Inlet on the western shore of Hudson Bay.

Stornoway shares interest in the Aviat property with BHP Billiton – which owns the Ekati mine in the Northwest Territories – and the Hunter Exploration Group. Two of Stornoway’s holdings, Churchill and Quilalugaq, are in the advanced exploration stage.

Governmental Support

To maintain Nunavut’s position as a jurisdiction of choice for mineral investment, the local Government developed a strategy entitled “Parnautit: The Nunavut Mineral Exploration & Mining,” which provides a framework of policies and actions to encourage mineral discovery and development. Released in March 2007, the goal of Parnautit is to create the conditions for a “strong and sustainable minerals industry that contributes to a high and sustainable quality of life for all Nunavummiut.” The plan addresses Nunavut’s regulatory and taxation regimes, workforce training, infrastructure development and environmental baseline availability.

Peter Taptuna, Nunavut’s Deputy Premier and Minister Responsible for Mines, explains that Nunavut also offers a Development Partnership Agreement (DPA) program that was introduced in 2006 as a means of extending the territorial off-road fuel tax credit (rebate) to developing and producing mines. Through these DPAs, Nunavut’s Government and mine operators work cooperatively in areas such as education and training, socioeconomic monitoring and mitigation, as well as in infrastructure development. As the physical and economic circumstances of no two mines are alike, so too each DPA should reflect the unique and shared needs of the mine operator and the local population. Proponents entering the regulatory phase are encouraged to begin negotiations on a Development Partnership Agreement for their projects.

For now, the reality of the diamond industry is much like the weather conditions in Nunavut- harsh. In spite of this, the Canadian industry is up to the challenge. While current prices, logistical challenges, inclement weather, personnel shortages and training needs remain concerns, all signs point to Nunavut seeing growth in mining operations in the near future, just in time to offer its diamonds to an eager market.

Sourced & published by Henry Sapiecha

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Mining giant Rio Tinto sources said that Rio has unearthed a “remarkable” 12.76 carat pink diamond in Australia, the largest of the rare and most precious stones ever found in the resources-rich nation.

Named the Argyle Pink Jubilee, the huge rough stone was found at Rio’s pink diamond holdings in the Kimberley region of western Australia and would take almost 2 weeks to cut and polish, it was said.

“This rare diamond find is generating incredible excitement. A diamond of this calibre is unprecedented — it has taken 26 years of Argyle production to unearth this precious gem and we may never see one like this again,” said Josephine Johnson from Rio’s Argyle Pink Diamonds division.

“The individual who gets to wear this remarkable pink diamond will be an  incredibly lucky person.”

The light pink Argyle Jubilee has similar colour tones to the 24-carat Williamson Pink given to Britain’s Queen Elizabeth II as a wedding gift which was later re-set into a Cartier brooch for her coronation.

The Williamson was discovered in Tanzania in 1947 and  ranks among the finest pink diamonds in existence.

Rio produces more than 90 percent of the world’s pink diamonds from the Argyle mine, and said, typically large stones like the Jubilee typically went to museums, were gifted to royalty or end up at prestigious auction houses like Christie’s for sale to the highest bidder.

Christie’s had only auctioned 18 polished pink diamonds larger than 10 carats in its 244-year history, Rio said.

When the Jubilee pink diamond has been cut and polished it will be graded by international experts and showcased globally before being sold by invitation-only tender later this year.

This 12.76 carat sparkling gem which was discovered at the Rio Tinto Argyle mine is among the largest and most valuable pink diamonds in the world.

The rarest of diamonds, pink diamonds have been  known to fetch about $1 million a carat on the market.

Sourced & published by Henry Sapiecha

www.www-gems.com

Black Coral & 1 carat pink diamond pendant for sale

Pink heart diamond 4.54 carats for sale

Pink diamond RBC 1.84 carats in ring for sale

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Preparations for Bulk Sampling at Krone-Endora at Venetia

KELOWNA, August 17, 2011 – Diamcor Mining Inc. (TSX-V.DMI / OTCQX-DMIFF) (the “Company”), is pleased to announce that it continues to make excellent progress on the completion of the recommended drilling programme and site preparations for the Company’s planned transition to recommended bulk sampling at its Krone-Endora at Venetia project (the “Project”).  In addition to the drilling efforts, which are now in their final stages, approximately +/- 20 employees, consultants and contractors, including heavy equipment, are preparing for the Company’s commencement of the recommended bulk sampling program.  Preparations include the establishment and upgrade of access roads throughout the Project, preparations for the installation of an initial water pipeline, preparation of the area selected for the anticipated delivery of the bulk sampling plant, preparation of areas which have been selected for bulk sampling, establishment of operational offices and infrastructure on-site, procurement of equipment necessary for bulk sampling, and the procurement of the bulk sampling plant for delivery to the Project.  Further details regarding Company efforts to support the transition to bulk sampling will be released by the Company in the coming weeks.

Drilling Programme Expanded:

The Company initially planned to drill approximately 390 targets on the K1, K3, Confluence, and areas of interest immediately adjacent to these areas of the Project as part of the recommended drilling programme.  Due to the encouraging results of the ongoing drilling efforts in identifying additional gravel bearing areas, and the desire to further extend drilling into new areas, the Company expanded the total number of drilling targets and has now successfully completed the drilling of 469 targets.  In addition to the drilling completed to date, the Company plans to further extend drilling to include an additional +/- 50 targets in new areas to the north east of the K3 and Confluence areas.  All targets drilled to date have been in areas outside of the current fence-line of Venetia.  In conjunction with the drilling of these extended targets outside the current fence line of Venetia, the Company also plans to complete the drilling of various targets inside the fence-line of Venetia in the coming weeks.  The drilling of targets inside the fence-line of Venetia is aimed at aiding in the identification of potential extensions of the known deposits from the K1 area through the areas to the East of K1 where drilling has now been completed up to the Venetia fence-line.  The Company is targeting the completion for all remaining drilling prior to the end of the third calendar quarter.

Data gained from the combined drilling efforts is designed to aid the Company, and independent geologists, in determining the depths of the underlying bedrock throughout the various initial areas of the Project being drilled, to provide additional information on both the known lower-grade upper gravels and higher-grade basal deposits in the areas of the Project which were previously identified by De Beers, and to identify potential extensions and the directions of any additional deposits into new areas from the proposed source of the deposits, the adjacent Venetia kimberlites.  Data is also being used to identify the target areas for the Company’s recommended bulk sampling programme.

The combined results of the recommended drilling and bulk sampling programmes are designed to support the filing of a new updated NI 43-101 Technical Report (the “NI 43-101 Report”) for the Project in the coming months.  These programmes will also be used to aid in the recommended advancement of the Project to trial mining exercises in the near-term, and to assist the Company in assessing a production strategy for the Project over the long-term.  The current NI 43-101 Technical Report as filed by the Company on July 30, 2009 was based solely on the areas of the Project on which De Beers previously performed initial work, with the average diamond dollar per carat price estimate in that report dating from 2005.  In addition to further establishing grades and other relevant information in areas being targeted for bulk sampling, the Company anticipates that the rough diamonds recovered during bulk sampling will allow the Company and independent geologists to establish the current rough diamond dollar per carat average for the Project.

About Krone-Endora at Venetia:

On February 28, 2011, Diamcor successfully completed the acquisition of the Krone-Endora at Venetia Project from De Beers. The Project consists of the prospecting rights over the farms Krone 104 and Endora 66, which represent a combined surface area of approximately 5,888 hectares directly adjacent to De Beers’ flagship Venetia Diamond Mine in South Africa.  De Beers previously completed various exploration efforts on initial areas of interest comprised of approximately 310 hectares, a summary of which has been reported in an initial Independent NI 43-101 Technical Report filed by the Company on July 30, 2009.  The deposits which occur on the properties of Krone and Endora have been identified as a rare, higher-grade lower “Eluvial” basal deposit which is covered by a lower-grade upper “Alluvial” deposit.  The deposits are proposed to be the result of the direct-shift (in respect of the “Eluvial” deposit) and erosion (in respect of the “Alluvial” deposit) of an estimated combined 1,000m (1 km) of material from the higher grounds of the adjacent Venetia kimberlite areas.  Based solely on the work completed to date, the current NI 43-101 Technical Report filed provided an inferred resource estimate of 54,258,600 tonnes of diamond-bearing gravels and 1.3 million carats of diamonds for the initial areas of interest alone.  The deposits on Krone-Endora occur in two layers with an average total depth of only 15.0 metres from surface to bedrock, allowing for a very low-cost mining operation to be employed, and the potential for near-term diamond production from a known high-quality source.  Krone-Endora also benefits from the significant development of infrastructure and services already in place due to its location directly adjacent to the Venetia Mine.

About Diamcor Mining Inc:

Diamcor Mining Inc. is a fully reporting publically traded junior diamond mining company which is listed on the TSX Venture Exchange under the symbol V.DMI, and on the OTC QX International under the symbol DMIFF.  The Company has a well-established operational and production history in South Africa, and extensive experience supplying rough diamonds to the world market.  Rather than exposing itself to the high risks and costs associated with exploration, the Company’s focus is on the identification, acquisition, and operation of quality near-term production based diamond projects such as the Krone-Endora at Venetia Project.  For additional information on Diamcor, please visit our website at www.diamcormining.com.

Strategic Tiffany & Co. Alliance:

As announced on March 29, 2011, the Company has established a long-term strategic alliance and first right of refusal with world famous New York based Tiffany & Co. to purchase up to 100% of the future production of rough diamonds from the Krone-Endora at Venetia Project.  To expedite the production and supply of rough diamonds from Krone-Endora at Venetia, Tiffany & Co. has also provided the Company with additional financing for the Project.  Tiffany & Co. is a publically traded company which is listed on the New York Stock Exchange under the symbol TIF.  Originally founded in 1837, the Tiffany’s name is now globally recognised as one of the premier luxury jewellery and specialty retailers in the world.  Through Tiffany & Co. and various other subsidiaries, the company is engaged in product design, manufacturing, and retailing activities on a global basis.  As of October 31, 2010 Tiffany & Co. operates 225 retail stores and boutiques in the Americas, Japan, Asia-Pacific, and Europe and engages in direct selling through internet, catalog and business gift operations.  For additional information on Tiffany & Co., please visit their website at www.tiffany.com.

Sourced & published by Henry Sapiecha

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In 2010, it accounted for 23.5% of the total diamond production in terms of volume, and 25% in terms of value.

New assessments from Frost & Sullivan, Outlook of the Russian Diamond Market, find that the market earned revenue of $4.79 billion in 2010 and is estimated to reach $5.74 billion in 2015. Deployment of modern equipment will be essential for productive outcomes in mining low-grade ore.

Sourcd & published by Henry Sapiecha

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for cut of polished profit

London-listed Gem Diamonds announced last Tuesday that it has sold the world’s 14th largest white diamond discovered at its Letšeng Mine in Lesotho two months ago for $16.5 million in cash. Gem will also share in the profit of any polished diamond/s cut from the 550 carat Letšeng Star.

Letšeng is fast-becoming the richest source of large diamonds in the world and without the occasional large diamond find, the Letšeng pipe would probably be a marginal deposit, but the mine, 30% owned by the King of Lesotho, has also yielded  the 478 carat Light of Letšeng that went for $18.4 million in 2008 and two other big diamond rocks.

Sourced & published by Henry Sapiecha

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Controversy continues to rage over mining in Zimbabwe’s Marange alluvial diamond fields, & Voice of America reports a deal has been reached to sell Marange diamonds.

According to the World Diamond Council, the agreement allows two Marange operations to sell diamonds on the international market and a third, run by Chinese interests, will be allowed to resume sales following third-party verification.

The agreement, reached in Kinshasa, Congo, was supported by members of the Kimberley Process, which is a system to prevent the sale of so-called “blood diamonds”.

The United States opposed the decision by abstaining from voting.

Sourced & published by Henry Sapiecha

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