Firestone Diamonds reports on progress at Liqhobong mine; appoints new CFO

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Firestone Diamonds (LON:FDI) said it treated 152,422 tons of ore in the second quarter at the pilot plant of the Liqhobong mine in Lesotho - nine per cent above its forecasts.

49,240 carats were recovered at a grade of 32.3 carats per hundred tonnes (cpht), it said, in a trading update, which also revealed sales figures for stones from the mine at a dual tender held in Gaborone and Antwerp this month.

The company also revealed it had appointed a new chief financial officer - Grant Ferriman. Modifications at Liqhobong's pilot plant aimed at decreasing breakage began in June and were completed this month and are expected to lead to a further improvement in diamond values.

Chief executive Tim Wilkes told investors: "We have continued to build on the positive production and carat recovery trends from Q1. "The second planned shutdown during the latter half of June has gone very smoothly and the plant is ramping up towards a steady state of around 2000 tonnes per day."

At the tender, 45,773 carats were sold, realising gross revenues of $4.14 million or $91 dollars per carat, the firm revealed. This price was significantly higher than the $71 per carat achieved during the previous quarter.

The dollar per carat achieved demonstrates continued strong demand for higher quality stones whilst some pressure remains on the poorer quality and smaller stones, Firestone said.

Wilkes said the encouraging sales bode well for the feasibility study on the main treatment plant at Liqhobong, which will undergo final review for board approval in October 2012.

The DFS for the main treatment plant is largely completed and being reviewed, the firm said. The results are expected to be announced towards October this year.

Firestone also announced it had appointed Julian Treger and Mike Wittet as non-executive board members with effect from Tuesday (July 24). In addition, Grant Ferriman joined the firm as CFO with effect from July 5 this year.

The firm said it had a strong cash position of around $16.3 million as at June 30 this year and was reviewing its strategy in regard to its exploration portfolio and would update the market in due course.

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Researchers Use Diamonds to Boost Computer Memory

A team led by Johns Hopkins engineers has discovered some previously unknown properties of a common memory material, paving the way for development of new forms of memory drives, movie discs and computer systems that retain data more quickly, last longer and allow far more capacity than current data storage media.

The research focused on an inexpensive phase-change memory alloy composed of germanium, antimony and tellurium, called GST for short. The material is already used in rewritable optical media, including CD-RW and DVD-RW discs. But by using diamond-tipped tools to apply pressure to the materials, the Johns Hopkins-led team uncovered new electrical resistance characteristics that could make GST even more useful to the computer and electronics industries.

"This phase-change memory is more stable than the material used in the current flash drives. It works 100 times faster and is rewritable about 100,000 times," said the study's lead author, Ming Xu, a doctoral student in the Department of Materials Science and Engineering in Johns Hopkins' Whiting School of Engineering. "Within about five years, it could also be used to replace hard drives in computers and give them more memory."
GST is called a phase-change material because, when exposed to heat, areas of GST can change from an amorphous state, in which the atoms lack an ordered arrangement, to a crystalline state, in which the atoms are neatly lined up in a long-range order. In its amorphous state, GST is more resistant to electric current. In its crystalline state, it is less resistant. The two phases also reflect light differently, allowing the surface of a DVD to be read by A tiny laser. The two states correspond to one and zero, the language of computers.
Although this phase-change material has been used for at least two decades, the precise mechanics of this switch from one state to another have remained something of a mystery because it happens so quickly -- in nanoseconds -- when the material is heated.

To solve this mystery, Xu and his team used another method to trigger the change more gradually. The researchers used two diamond tips to compress the material. They employed a process called X-ray diffraction and a computer simulation to document what was happening to the material at the atomic level. The researchers found that they could "tune" the electrical resistivity of the material during the time between its change from amorphous to crystalline form.

"Instead of going from black to white, it's like finding shades or a shade of gray in between," said Xu's doctoral adviser, En Ma, a professor of materials science and engineering, and a co-author of the PNAS paper. "By having a wide range of resistance, you can have a lot more control. If you have multiple states, you can store a lot more data."

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Are diamonds the new gold for individual investors?

"Diamonds are a girl`s best friend." From Carol Channing to Marilyn Monroe to "Moulin Rouge" the iconic song has endured as a symbol of wealth for more than half a century.

But should diamonds be an investor`s new BFF?

Of course, investors and couples alike can buy diamond earrings on the retail market, but there`s a movement to create a way for individual investors to buy diamonds like gold.The Securities and Exchange Commission is looking over a proposal for the first-ever diamond-backed exchange-traded fund.

Tom Lydon, president of Global Trends Investments and editor of ETF Trends, thinks there would be a demand for a diamond ETF, but the problem will be pricing. "When you look at these ETF providers trying to get into the space to a degree it`s the tail wagging the dog. They`re trying to force the industry to have standardized pricing" he said.

The diamond industry likes "the fact that pricing is not always clear. That`s basically how they make their money," Lydon told CNBC`s Street Signs."Gold is liquid. It trades on the futures market. But when you get to diamonds it`s a whole different story. Diamonds aren`t created equal. There are so many sizes, shapes, qualities," he said.

A report in The New York Times explains how the diamond ETF would work.It would buy one-carat diamond earrings and store them in a vault in Antwerp, Belgium, providing daily values with an as-yet-unnamed index. The fund is backed by a New York company, IndexIQ, that has brought 14 other exchange-traded funds to market in the last five years.

Wall Street waded into the diamond trade in the late 1970s and early 1980s, when inflation was exploding and investors were looking for hard assets. But when rates sank, so did the value of diamonds and the diamonds-as-an-investment proposition.

Citi analyst Oliver Chen, who covers the diamond industry, regards the proposed diamond ETF with caution. "Diamonds for end-use tend to be 98 percent consumer versus gold at 50%. So there could be a lot of volatility on those supply and demand characteristics.

"Within the context of the diamond market, De Beers and [Russia`s] Alrosa still have chunky market shares. On a combined basis that`s 60 percent. So it`s a relatively non-fragmented market, which is a unique characteristic in contrast to gold," Chen told CNBC.

And it may get even more non-fragmented.The Sunday Times in the UK reports that legendary investment group KKR wants to create the third-largest diamond company behind De Beers and Alrosa by combining the diamond operations of BHP Billiton and Rio Tinto.

Chen is, however, bullish on diamonds, projecting that prices will increase 6% annually for the next decade. He likes Toronto-based Harry Winston recommending it as a "buy" with a price target of USD 17 a share over the next 52 weeks.

Meanwhile, Harry Winston is looking to tap hedge funds, pensions, and other institutional investors by teaming up with a Swiss asset manager to create a USD 250 million fund to buy diamonds.According to Chen, the difference between this investment fund and the proposed IndexIQ diamond ETF is the Harry Winston vehicle will only be open to qualified investors, will be capped at USD 250 million and will be a closed-end fund.

Diamonds Are a Great Way to Diversify: Expert

Diamonds are an attractive option for investors looking to diversify portfolios because they don't move in relation with other assets such as commodities and stocks, according to David Riedel, President of equity research firm Riedel Research Group.

“Over the past decade cross-asset correlations have nearly doubled, (but) diamonds have exhibited very low correlations to other assets making them an attractive source of diversification. They have almost no correlation to anything else – commodities, gold, equity markets,” Riedel told CNBC on Wednesday.

In 2011, the RapNet Diamond Index (RAPI) for one carat polished diamonds rose 19 percent outpacing gold,which rose 10 percent. And supply constraints are expected to take diamond prices even higher in the coming years, says Riedel.

He estimates demand for diamonds will grow 50 percent between now and 2015, driven by consumption in the United States, China and India, while production will rise by just 24 percent.“Diamond mines tend to be most productive near the surface, and like a funnel become less productive as you go deeper,” says Riedel, which restricts supply.

Demand out of the U.S., which currently accounts for 40 percent of global diamond purchases, is set to strengthen alongside the pick up in its economic recovery, he said.The rise in household income and the young population in India and China will support demand out of these two countries, which are already the world’s top two consumers of gold jewelry, says Riedel.

“We expect cultural trends throughout emerging markets to drive demand for diamonds further. A major trend increasing demand among the Chinese is a desire to display wealth,” he said.

Addressing the growing supply of synthetic diamonds, which are available at a fraction of the cost of natural diamonds, he says the former will not impact demand for the latter.“There is a growing supply of synthetic diamonds but there is a certain cache and investment value in natural diamonds and we think that will continue.”

Sotheby's annual spring sale of “Magnificent Jewels” in Hong Kong this week highlighted Asia’s booming interest in diamonds. The highlight of the auction was the sale of an 8.01-carat blue diamond ring for $12.7 million - the second highest price per carat for a blue diamond at an auction.

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Paragon Diamonds reports consistent results from Motete micro samples

 Paragon Diamonds(LON:PRG) said results from the final part of its micro-diamond sampling programme at Motete, Lesotho showed results consistent with the previous samples.The sample, from the western end of Motete Dyke, included 17 macro-diamonds (greater than 0.5mm/600μm) and a single diamond greater 1.18 mm.

The overall sample’s combined results of 2,655 diamonds included 131 macro-diamonds and six diamonds greater than 1.18 mm from 1,355 kg of samples. These are now being interpreted to establish a modelled grade for the Motete Dyke.

Paragon owns 83.75 per cent of Motete Dyke. The micro diamond analysis results in 2012 indicated that an in-situ grade of up to 1 carat per tonne is likely.

Paragon added that the road access to extract a bulk sample is proceeding with six kilometres of access track built to within one kilometre of the main dyke. Mining equipment will arrive and begin sample extraction by the end of March.

Paragon said it has also negotiated a contract to drill approximately 1,400 metres of NQ core at depth for a series of 12 intersections into the dyke up to 150 metres below surface. This drilling, in addition to providing further sample material, is intended to demonstrate the continuity of the dyke at depth, it said.

Meanwhile, Ntate Bataung Leleka, former Principal Secretary to the Lesotho Ministry of Natural Resources, is to be a consultant to the Lesotho subsidiaries, while Alastair Garner and Radiant Diamond Consulting will be professional diamond valuers to the company on a non-exclusive basis.

Francesco Scolaro, chairman, said: "Our management team continues to deliver positive results in a timely manner. I am encouraged with these results and remain confident that Lesotho will deliver a revenue stream for the company."

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Stellar Diamonds soars after Tongo resource wows brokers

Shares in Stellar Diamonds (LON:STEL) soared as brokers hailed the maiden resource estimate for its Tongo project in Sierra Leone as a significant milestone.The Africa- focused diamond group revealed a JORC compliant 660,000 carat inferred resource for Dyke-1 with a resource grade of 120 carats per hundred tonnes.

Daniel Stewart said the most important figures for investors to focus on are the very high grade and diamond price per carat, reflected in the quantity and quality of the resource of 120cpht and US$225 per carat.House broker Northland meanwhile said it was reviewing its current price target of 15.1p and said parallels can be drawn between Stellar’s Tongo kimberlite dyke project and Petra Diamond’s long established Fissure Mines.

Fissures are currently the only actively mined kimberlite dykes being mined in the world. The ROM grade at Tongo is likely to be c. 54cpht and the average diamond value is estimated to be between $225/ct to $270/ct.

At Fissures, the grade is 39cpht and the average diamond value is $255/ct.Combined, this results in a higher value per ROM tonne from Tongo between $122/t and $146/t, compared to $99/t from the Fissures.

The Fissures have a combined strike length of 12.9km, at Tongo 1.9km of the 2.5km long Dyke-1 has been tested and there is further potential from other Dykes in the area (c. 2km). The current depth of mining at Fissures is 750m at Tongo the resource extends to a depth of 200m - further drilling could extend the resource to a greater depth.

The Fissures have been in production for more than 50 years and have a remaining 15 years of mine life, demonstrating the longevity that kimberlite dyke operations can have. Karl Smithson, Stellar’s chief executive, said: "The high diamond grades and values exhibited by Dyke-1 make it one of the highest value kimberlites in terms of dollars per tonne worldwide."

Smithson added that the maiden inferred resource had confirmed the potential of the Tongo Kimberlite Dyke project and was a “significant milestone” for Stellar Diamonds.He added that the project also had potential for major expansion and development.

“In addition there is 25% of the mapped strike of Dyke-1 yet to be drilled into the resource category and there is considerable potential to expand the resource with depth. Similar operational kimberlite dyke hosted diamond deposits in South Africa are mined to a depth of 700m below surface.

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