Flinders Diamonds has gem of a day
Email Print Normal font Large font AdvertisementAdvertisementBarry Fitzgerald
November 23, 2007
IT WAS a big day out for hardy Adelaide-based diamond explorer Flinders Diamonds. But the 790% increase in the group's shares — albeit from 1¢ to 8.9¢ — had nothing to do with the hunt for diamonds, not directly anyway.
The sudden surge was a response to Flinders' declaration that a permit it holds next to Fortescue Metals' recently reported 1 billion tonne iron ore find in the Pilbara region of Western Australia could host up to 390 million tonnes of iron ore.
Flinders has been exploring the tenements for elusive diamonds since June 2003, but only decided to check out its iron potential this year, given the activity of Fortescue and the market's craving for anything with leverage to the China-led iron ore boom.
Fortescue announced its Serenity area discovery last week and its shares shot higher, taking the personal holding of executive chairman Andrew "Twiggy" Forrest, to more than $6 billion — making him Australia's second-richest billionaire behind James Packer.
No one is super rich at Flinders yet, with the group's market capitalisation standing at about $10 million after yesterday's monster (percentage) gain. Besides, there is no Twiggy-type holder of the register, with the top 20 shareholders controlling only 24 per cent of the action.
Apart from the adjacent tenement with the 390 million tonnes iron ore "potential", Flinders is also entitled to a capped royalty payment from Fortescue on a joint venture tenement that contains an inferred resource of 220 million tonnes of iron ore, which was included in Fortescue's 1 billion tonne discovery announcement.
Flinders managing director Kevin Wills emphasised that although based on the best available local experience, the 390 million tonne "exploration target" on the group's tenement "was conceptual in nature and there has been insufficient exploration to estimate a mineral resource".
"It is also therefore uncertain whether further exploration will result in a larger, smaller or any mineral resource," he said.
Dr Wills was part of the team that found the Argyle diamond
FDL
flinders diamonds limited
