Everyone is talking about gold and silver these days, but nobody talks about diamonds. Let’s have a little peek inside this sector [and how to take full advantage of expected developments.] Words: 437
So says Katchum (www.katchum.blogspot.ca) in edited excerpts from his latest post*.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Katchum goes on to say, in part:
The diamond market is to be found in the developed world as Asian/emerging markets only have a 10%-30% stake in this market (Figure 2). This means that demand is going to keep growing in countries like China and India, while we won’t have any new and significant discoveries. In fact, we haven’t had any Tier 1 discoveries in over 17 years now. Tier 1 discoveries are very large and very high grade discoveries by the way.
Supply & Demand Gap
As a result, we will get a huge supply and demand gap in the near future, starting from 2015.
Higher Prices Expected
This supply-demand gap will spark diamond prices and we can already see a recovery in diamond prices in the chart below. Consulting firms forecast a 3% to 10% price growth per annum in rough diamonds for the coming years due to China and India.
Best Investment Opportunity – Olivut Resources (OLV)
So how do we play the positive fundamentals in the diamond market? We go after the biggest resource in the world and that can be found in Olivut Resources.
In a recent interview with Pierre Lassonde, who owns 18% of Olivut Resources (OLV), we were reminded of the recent developments at Olivut Resources. Olivut Resources is a development stage exploration company which primarily holds a 100% share in the HOAM project in Canada, which is a huge kimberlite deposit. The value of this deposit could control the top end of the diamond market. Pierre Lassonde talks about a possible 100 times increase in the share price because the site could contain an in situ value of $20 billion and a net present value of $2 billion. The market capitalization of the company is currently just $36 million.
Based on extremely positive indicator mineral chemistry, geophysics and drill results to date, management believes that there is a high probability that economic kimberlite pipes remain to be discovered in the project area. Drilling (10-hole drilling program) has…concluded for the year…with results known by the end of 2012. Investors can speculate on these pending results at a bottoming price level as seen in the chart below.
…What’s very positive is that Olivut tends to follow the diamond price. I say positive because the diamond price has been in an uptrend in the last few months so Olivut Resources should trend up as well. Olivut Resources had $2.7 million in working capital as of 31 January 2012 and has invested $4 million to date in the HOAM project….
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
China and India are about to drive diamond demand through newly affluent population. In the world diamond retail market, Asia in 2005 made up 23% of purchases. In 2020, they will make up 57%! Such growth in diamond demand should make for a sparkling future for those who invest prudently. In the infographic and copy below you will learn all about diamonds.