Ann: Maiden Diamond Resource at Lulo, page-43

Nice annountement. I'm swapping my buy sentiment to a hold. Reasons?

- 4 years mine life has to be discounted a lot.
- Refer to map on pp7. The inferred resource areas are in the uphill portion of the river flank positions along the Cacuilo River - basically, where the prospective gravel bed got too deep for the garimpieros. There's very, very few areas where these individual areas of the gravel apron can be expanded along strike, and if you accept the river valley as a boundary, little opprotunity to extend them out from the river valley. So exploration will have to work along the edges of the valley. There's possibly only 300-400% more upside on the mining license area at most, assuming all areas outside the Resource, not worked over by garimpieros, and not in the flood plain, are laden with gravels.
- as pointed out above, the company has 40% of the rights
- mining costs aren't accounted for
- it's 30-50cm of gravel under 2-4m of sludge. it is wrong to characterise this as "just the top 2 feet"
- guess how long it takes to deliver a drill rig to the sticks in Angola? Don't hold your breath. Also, it's $2-5K a day to run a rig (probably on the lower end, thanks to African wages). So you can see where these diamond dollars are going to go

So, yeah, it's a good indication that you guys won't have to drop your hands in your pockets to fund exploration for the hard rock source, but it's not the worldbeater announcement. It's an alluvial resource and it will partly fund exploration for 4 years.