Other issue for me is complexity of pricing and effect on...

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    Other issue for me is complexity of pricing and effect on deposit economics.

    The price of gold for example is transparent to all and so is the value - the gross value of gold in a tonne of ore in a deposit is simply the grams per tonne (excluding recovery rates etc).

    Diamond pricing on the other hand is not transparent (as per Tastarga suggested; google De Beers to partly see why); and the gross value of diamonds in a tonne of ore is a factor of both carats per tonne (usually quoted in carats per hundred tonnes from memory) and the size of the diamonds; larger diamonds attract higher prices and so do different coloured diamonds. So I guess JORC reserves for diamonds have an inherant complexity in-built compared to metals which to me equates to higher risk.

    Hence some of the issues with project economics with some of the diamond companies I mentioned above when they started mining - lower than expected grades, lower than expected average diamond size and in some cases lower than expected higher value coloured diamonds. Combine all of these and its likely game over.

    Disclaimer - have not followed diamonds for years so a bit rusty and worth verifying what I have posted!

 
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