Note some of the work put into the statistical analysis. Whilst based on guesses the guesses are certainly underpinned by research ...
In the absence of any definitive data it is easily the most carefully put together estimate we have.
- I joined a Gem Society
- I e-mailed/messaged individuals in the industry to get some perspectives on rough ruby and cut ruby value
- Significant research of ruby material on the web covering Mozambique and Burma
- I researched yields for cut rubies from rough rubies
- I carefully analysed all the company announcements to get a good understanding of the carat size distributions of rough rubies. Some contributors here suggested statistical distributions that might accurately model actual distributions.
- I researched 3 or 4 ruby grading systems
- I carefully analysed all the company announcements to get a good understanding of ruby sizes and qualities being recovered
- I obtained industry price data for cut rubies at a range of sizes and qualities ( industry data sourced from a company announcement )
- I used the research above to develop estimates of reserve price ratios
$300/ct or $600/ct would be optimistic. Last week I would have agreed with a lower range around $180/ct.
$200/ct is reasonable given the company focus on secondary deposits that yield 'almost exclusively' high quality rubies.
If you look at the 3 pie charts (below) in the statistical analysis, you will see that the first 120,000 carats (1st chart below) of inventory includes a very high proportion of commercial quality ruby so there is a reasonable distribution of qualities in line with recoveries that could be expected from . The assumptions IMO are reasonable.
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These are the breakdowns inventory-wide for auction 1. IMO reasonable given company focus on secondary deposits.
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This will also achieve the company objective of providing sufficient commercial-quality material at the auction to meet buyer needs. i.e. 1/3rd of inventory.
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