At 4c (and a market cap of 6 million) the market is pricing this company to fail, which doesn't make a lot of sense. The $20 valuation is consistent with what is happening in the broader rough diamond mining sector. Diamonex isn't immune from this macro phenomenon. DeBeers and a bunch of other diamond miners have had to contend with much lower diamond valuations in the last quarter as people curb their spending. Debeers have considered stopping sales in a bid to create a buying vacuum.
So where to from here?
I'm hoping sanity will prevail, and the company will move up a couple of notches and assume a more realistic market cap. Even if the macro issues continue, demand will surely get to a tipping point where rough diamond prices resume to 'fairer trading levels'. Even if this means putting the mine 'on-ice' for a while, or stockpiling diamonds for better times...
Definitely a specie, but at current levels I'm inclined to take a punt (My opinions only - DYOR)
Cheers, George.
DON Price at posting:
4.0¢ Sentiment: Buy Disclosure: Held
