Monday, November 29, 2010

Record price paid for perfect pink diamond

A rare pink diamond sold at auction today for a record £14.86 million.

The 14.23-carat rectangular gem, known as the Perfect Pink, went under the hammer at British art auction house Christie's Hong Kong saleroom, where it was bought by an anonymous bidder.

It was a record price for a jewel sold at auction in Asia. Another record was broken by the total raised by the Jewels: The Hong Kong Sale, which at £50,601,648 was the highest amount Christie's had yet raised at a jewellery sale worldwide.

Vickie Sek, director of the jewellery and jadeite department for Christie's Asia, said: "The strength of the jewellery market was once again demonstrated in Hong Kong with a record 78.9 million dollars (£50.6m) auction making it the highest total ever for a jewellery auction in Asia and the largest at Christie's worldwide.

"At 23.2 million dollars (£14.86m), the Perfect Pink became the most expensive jewel ever sold at auction in Asia.

"Exceptional Burmese rubies and Kashmir sapphire also fetched top prices, as did jadeite which remains in great demand with Asian collectors."

Christie's said only 18 pink diamonds over 10 carats had appeared for sale in the auction house's 244-year history, with the Perfect Pink the first to be graded a "fancy intense pink".

A spokesman added: "Large, polished pink diamonds with this intensity of colour are virtually unheard of - in fact, fewer than 10% of pink diamonds weigh more than 0.20 carats."

The diamond's previous owner also wished to remain anonymous.

Prices included the buyers' premium.

The Independent

Thursday, November 25, 2010

South African court agrees to block sale of 27-carat pink diamond

South African businessman has obtained a temporary court order blocking the sale of a 27-carat pink diamond with a claimed value of $25 million found on November 3 in the Northern Cape.

Johann Jacobus Cilliers secured the order in the Cape Town High Court last week to stop Kimberley Consolidated Mining (KCM), in which he owns shares, selling the diamond, found last month at the miners' Bo Karoo site in the Northern Cape, according to a report in Times Live.

Cilliers claims that the company is in financial difficulties, and will receive on just 15 percent of the profit from the sale of the diamond because of an invalid subcontractor agreement with Pico Diamonds.

He wants the company to retain all the proceeds of the sale which would help ensure its survival. Cilliers said the money could be used to pay creditors, reacquire mining equipment and pay dividends to investors.

Cilliers claimed the firm and its subsidiaries were plagued by corruption and "maladministration".

KCM CEO Phemelo Sehunelo told The Times: "One, we are ready to defend the action and, two, we have a good subcontractor agreement with Pico Diamonds. And we have been keeping records of everything. Since the inception of this company or joint venture, this single shareholder [Cilliers] has been causing problems for us."

Last year, the JSE-listed company ran into trouble with the authorities for failing to submit annual financial statements. This month, the company was delisted.

After the cleaning process, the pink diamond will be sold at tender, the firm’s board of directors said. "In terms of the subcontractors agreement, KCM will receive royalty of 15 percent of the gross selling price of the diamond," the board said.

Antwerp Facets

Wednesday, November 17, 2010

Petra Diamonds gets big time pay day

Investing in a mine that De Beers decided to cast off would seem to many a risky consideration, especially for a junior miner. However, when the opportunity arose in 2008, South Africa-based Petra Diamonds saw an opportunity to score big.

And it certainly did. In the space of little more than a year, Petra’s new acquisition yielded the 507-carat Cullinan Heritage, which was classified as virtually flawless and went on record as the 19th largest diamond ever mined. It was sold to a jeweller in Hong Kong for $35.3 million, the highest-ever sale price achieved for a rough diamond. That stone alone helped boost the company’s revenues by 88 percent in the 12 months to June 2009.

Granted that this was no ordinary mine. The Cullinan Mine, which Petra purchased from De Beers in 2008 began life in 1902 as the Premier Mine, outside the town of Cullinan, 40 kilometres east of the South African capital of Pretoria. In 1905, it produced the world’s largest diamond and one of the most famous, the 3,016-carat Cullinan. Since then, the mine has produced a quarter of all diamonds weighing more than 400 carats, and four of the top 20 largest high-quality gem diamonds: the Cullinan, weighing 3,106 carats; the Golden Jubilee, at 755 carats; the Centenary at 599 carats; and the 507-carat Cullinan Heritage.

Indeed, the Cullinan Heritage is just one of many exceptional white diamonds Petra has extracted in the past year from the Cullinan mine. In addition, there was a 168-carat that it sold for $6.3 million, a 64-carat diamond sold for $3.7 million, two 50+ carat stones sold for $2.8 million, a 104-carat diamond sold for $2.0 million, and a 37-carat diamond sold for $1.1 million.

Cullinan’s rare blue diamonds also command high per carat prices, with a 6.7-carat blue sold for $510,000, and a 6.5-carat blue manufactured to a 2.8-carat polished stone sold for $250,000. Meanwhile, at Petra’s Koffiefontein mine, a 70-carat diamond was sold for $1.1 million, and a 34-carat gem sold for $1 million.

Earlier this month, it was announced Petra has completed a transaction for loan facilities of $83.5 million, which means it will be able to finance the expansion of the Cullinan mine, as well as the Williamson mine in Tanzania in which it has a 75-percent stake.

Cullinan contains the world’s second-largest indicated diamond resource, of 181.4 million carats, included in a total resource base of 203.3 million carats (including tailings), and the company is planning an expansion programme at the mine to take annual production from just over 920,000 carats in full year 2010, to 2.4 million carats by full year 2019. This expansion plan will eventually access the first portions of the major C-Cut resource, which is estimated to contain some 133 million carats, and will also involve a large tailings operation.

Petra Diamonds was established in 2005 when the firm, which was then just a pre-production diamond explorer with assets in Angola, merged with Crown Diamonds, a miner with projects in Sierra Leone. Shortly afterwards, De Beers was under pressure to sell assets and was looking to offload part of its holding in Cullinan, which was producing fewer of the huge stones for which it had become famous. Petra bought a 37 percent holding, which it has since increased to 74 percent.

Although acquiring a mine that had been in operation since 1902 might be considered by some as something of a risk, Petra Diamonds carried out a great deal of due diligence before going ahead with its first acquisition of 37 percent, said Bobby Morse, a Cullinan spokesperson. “There was a lot of confidence that it was a good acquisition because Cullinan has always produced good levels of diamonds, and many large high-quality diamonds. Petra is good at right-sizing operations; it’s much easier to take on a mine of this type when you are a company of the size of Petra,” Morse said.

Morse said it was common in a range of mining industries for larger producers to sell off smaller operations since a point is reached when it may not be economically worthwhile to carry on running. “De Beers is a very big company that has much larger mines with which to occupy itself and where they may prefer to put their capital.

“Cullinan is part of the so-called C-Cut which requires an investment of some tens of millions of dollars and a miner like De Beers may prefer to use that money on its larger operations rather than spending that capital on a mine whose output might be marginal to their overall operations. It makes sense for De Beers to receive money for selling its share in Cullinan and not to have to invest money in expanding the mine,” Morse said. That principle was applied by De Beers at several of its operations since it also sold its Kimberley Underground and Koffiefontein mines in South Africa, and its share in the Williamson mine in Tanzania.

“For Petra Diamonds, the aim is to achieve annual output of three million carats by 2019,” Morse said. “That is their aim, and they have the assets to get there because they have several mines not just one mine as is the case with many junior miners. Petra has high-level, experienced people, with some of them having worked for De Beers.”

Morse said that while acquisitions was not a core part of its strategy, if it considered that a deal could be beneficial to its shareholders then it would be willing to do so. “It is not a core part of its model – which is to treble production – but don’t be surprised if it did so if there was an acquisition that is accretive.”

Petra Diamonds sees its investment in Petra, and its other mines, as a success. It has interests in seven producing mines: six in South Africa – Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star, in addition to Cullinan, and the Williamson mine. The company reported a turnover of $17 million which soared to gross revenue of $177.7 million for the year ended June 30, 2010, and was up 88 percent on the year-earlier period, while it also recorded net profit of $70 million. Petra says it is on track to more than double diamond production to 2.5 million carats by 2014 – and triple production to more than 3 million carats by 2019. For the year ended June 30, gross diamond production rose 6 percent to 1.16 million carats.

Petra Diamonds has raised its expectations for the long-term potential at its Cullinan, Williamson, Kimberley Underground and Koffiefontein mines, both in terms of output and prices. There could be a possible decline in prices only if release of stockpiles of diamonds from Russia or Zimbabwe. The company also faces a handicap from currency issues as the South African rand remains strong and the dollar continues to decline.

Although Petra Diamonds is mainly concerned with raising production, it is also carrying out exploration. The group’s “modest annual exploration budget” is now focused on Botswana, which also offers a friendly operating environment.

Looking forward, Petra Diamonds says it has witnessed an upturn in the important U.S. market, “as evidenced by the steadily increasing volume and value of polished diamond imports in 2010 and improved sales in North America reported by leading diamond retailers. As the diamond market now enters the pre-festive season, expectations are for a continued improvement that should end with robust retail sales in the fourth quarter.”

For the 2011 financial year, it foresees diamond prices being firmer as long as the market and global economy remain stable. “Cullinan is our flagship asset and, along with Williamson, a key driver to Petra’s production and revenue growth in the coming years,” said Petra Diamonds' CEO Johann Dippenaar in an interview with The Independent.

“We completed the acquisition of the Kimberley Underground mine in the past year and introduced a seventh producing diamond mine to our portfolio. We had been operating Kimberley Underground on a care and maintenance basis together with De Beers since September 2007 and therefore had time to significantly rehabilitate the underground workings and to build the first of two new plants. Production has now commenced and the mine will be a valuable contributor to the company’s growth plans in the 2011 financial year,” Dippenaar added.

As for its sales and marketing operations, Petra’s management believes that as demand for rough goods grows stronger, there is a continuing constriction of the traditional diamond pipeline, with more and more companies opting for vertical integration.

“From Petra’s perspective, this is particularly evident by the number of major manufacturers and retailers now buying rough diamonds directly from the group’s tenders, rather than via traditional diamond traders,” the company said in its financial statement for full year 2009. “We think this trend will continue as rough becomes ever more scarce and our strategy to continue increasing output ensures that we are poised to benefit from this trend.”

Thursday, November 4, 2010

Kimberly Process Fails To Reach Agreement On Zimbabwe's Marange Diamonds

Kimberly Process members failed again on Thursday to reach agreement on whether to allow Zimbabwe to export rough diamonds from its controversial Marange field without Kimberly supervision, officials have said.

After deferring discussion for two days, Kimberly members had hoped a consensus could be reached Thursday after informal talks had produced an agreement that was rejected by Canada, Australia and other countries.

Chairman Boaz Hirsch told reporters in Jerusalem the watchdog group will now take an extra two days to see if members can reach a consensus on the highly contentious issue of Kimberly oversight.

"An agreement has not been finalized," said Hirsch. "We hoped to have a consensus today, we believe it will take a few more days...We are still working with Zimbabwe and other countries."

A defiant Zimbabwe Mines Minister Obert Mpofu told the conference and reporters later that Zimbabwe will sell the output from the Marange alluvial field "without any conditions." He said Zimbabwe will start doing that immediately. The minister said he was tired of the West treating Zimbabwe as "one of its entities."

The Kimberly Process, created to prevent the sale of so-called conflict or blood diamonds diamonds on international markets, suspended its certification of Marange diamonds last year citing alleged human rights abuses and other abuses by the military in charge of the Marange zone and other players in exploiting its riches.

Zimbabwean officials denied allegations by human rights groups that forced labor by local residents, torture, harassment, beatings and smuggling by government troops continue in the area.

A recent Kimberly review mission found that low-level intimidation continued, and urged Harare to crack down on the smuggling of diamonds into nearby Mozambique, a way station to the Gulf and other ultimate markets.

It also wants Zimbabwe to demilitarize Marange. The Harare government says it has fully complied with Kimberly rules and is supported by African and Asian countries in its quest to sell diamonds without supervision.

Back in Harare, meanwhile, state media reported that police Thursday arrested six officials of the Zimbabwe Mining Development Corporation and Canadile Mining, a government joint venture partner in Marange, on charges of fraud in obtaining permission to mine diamonds in the controversial field.

The state has accused Zimbabwe Mining Development Corp. Chief Executive Dominic Mubaiwa, ZMDC Chairwoman Gloria Mawarire, board members Ashton Ndlovu and Mark Tsomondo, Canadile Mining Secretary Tichaona Muhonde, and company representative Lovemore Kurotwi of duping the government into believing Canadile had sufficient resources to develop the Marange fields at the time the joint venture was formed.

The state-controlled Herald newspaper reported that the executives are alleged to have told the government that a South African company called BSGR wanted to invest US$2 billion in Zimbabwe when it fact it did not exist. A Kimberly Process report praised Canadile, but its future in Marange operations now seems in question.

Zimbabwe Republic Police spokesman Wayne Bvudzijena said the six were being held at the Braeside Police Station in Harare. He decline to comment further on the high-profile arrests.

For two viewpoints on the discussion in Jerusalem, VOA Studio 7 reporter Sandra Nyaira turned to Tiseke Kasambala, Human Rights Watch researcher on Zimbabwe, and Supa Mandiwanzira, president of the Affirmative Action Group, a Zimbabwean black empowerment organization, both attending the Kimberly Process meeting this week.

Kasambala, whose organization says Harare should not be allowed to freely export Marange diamonds, charges that the government and its partners in developing the Marange field have as failed to comply with a number of terms of a Kimberly Process work plan set out in late 2009. Mandiwanzira said those opposing Zimbabwe's s bid to sell its diamonds at are supporting what he says is the West's ultimate objective of regime change.

Tuesday, November 2, 2010

185-carat white diamond recovered in Lesoto mine

A "remarkable" 185-carat white rough diamond has been recovered in Losotho's Letseng mine, the Gem Diamond company announced Tuesday.

“Early examinations indicate that this rough diamond will yield top color and top clarity polished diamonds and is thus expected to achieve a substantial price per carat,” Chief Executive Officer Clifford Elphick said in statement quoted by 'Bloomberg.'

Only last year, the London-based diamond company recovered a 196-carat stone from the same mine. And according to a September, 2010 report by analyst Alison Turner of Panmure Gordon and Co., that rough diamond may be worth almost $12 million,

The Letseng mine, 70% of which is owned by Gem Diamonds, has been a more-than-steady supplier of impressive rough diamonds. According to Gem, three of the 20 largest diamonds recovered over the past four years were found in the Lesoto mine.

Monday, November 1, 2010


Diamond Exchange Ltd

List of Proof of Debts

Rare 14.23Ct Pink at Christie’s Hong Kong Jewelry Auction

Christie’s Hong Kong will offer at auction over 300 lots of gemstones and jadeite jewelry with a total estimated value of $55 million. Leading the sale is a 14.23-carat fancy intense pink VVS2 rectangular cut diamond ring estimated at $14-$19 million.

Calling it the Perfect Pink, Christie’s said that in over 244 years of auction history, it offered only 18 pure pink diamonds over 10 carats. None of them were graded fancy intense pink.

Last December, Christie’s Hong Kong sold a 5.00-carat cushion-cut fancy vivid pink potentially flawless diamond for $10,776,660, an average of $2,155,332 per carat. Christie’s estimate price for the 14.23-carat pink comes to $1-$1.34 million per carat. Considering the high prices such rare diamonds realize at Hong Kong auctions, the diamond may sell for more.

The November 29 auction will also feature a 12.02 carat fancy vivid internally flawless yellow oval cut diamond from Tiffany & Co. estimated between $1.25- $1.9 million.

Notable as well is a Nirav Modi necklace made entirely of Golconda diamonds, known for the quality in which light appears to pass through the diamonds unobstructed.

IDEX Online News