I found this interesting. It was written in Feb of 2004
http://www.smallcapmedia.com/articles/diamonds/diamonds-february-03-2004.html Renowned Diamond Stock Pundit John Kaiser Announces His Top 2004 Picks At Annual Vancouver Mining Investment Conference
By By Marc Davis, Managing Editor
February, 2004
A record crowd of about 4,500 investors packed out this year’s Vancouver Resource Investment Conference at the Pan Pacific Hotel in Vancouver on January 25-26. And many of them came to hear renowned investment newsletter writer, John Kaiser.
The author of San-Francisco-area newsletter, The Kaiser Bottom Fishing Report, did not disappoint them with his typically insightful commentary. Widely-regarded as the pre-eminent diamond stock expert among his stock pundit peers, Kaiser was nonetheless quite circumspect this year. Emphasizing that diamond exploration is a painfully laborious process, he cautioned investors not to expect many exciting developments to unfold in 2004. But that’s not what everyone came to hear. They wanted to hear which specific stocks would beat the odds by becoming newsmakers. So Kaiser (almost grudgingly) listed off a few of his favourites.
They include Mountain Province Diamonds Inc. (TSX: MPV) – a long-time favourite of his. Last year, Kaiser told a standing-room only audience of about 500 people (much like this year’s attendance at his diamond presentation) that Mountain Province was arguably his top pick. It had “$5 to $10 potential” written all over it, he said at that time. This view was based on the likelihood that the diamond junior’s deep-pocketed joint venture partner, De Beers, would advance the AK Properties project (which includes the prized Hearne and 5034 pipes) a long way towards a commercial production threshold. But Kaiser’s high hopes were soon dashed and Mountain Province’s share price fell out of bed following De Beers’ announcement that the AK Properties project would be temporarily shelved.
Unfortunately, most of Kaiser’s other favourite diamond picks also failed to perform last year due to a commonality of underwhelming exploration results. But that’s the nature of hunting for diamonds. A typical timeline for an end result is usually eight to ten years. And Kaiser is always at pains to point this out to investors as a caveat to his usually cautious diamond recommendations.
So, once again Kaiser stood before a stock-tip-hungry audience, bravely announcing that this will likely be Mountain Province’s year to glitter again. Once more, he based his opinion on the likelihood of De Beers acquiescing to bankrolling a $25 million pre-feasibility study at Snap Lake. What would prompt this change of heart by De Beers? Well, Kaiser argues that the diamond cartel is sensing a growing need to find new ways to replenish its dwindling global diamond supplies. And the prospect of tapping into a ready supply of “bloodless” Canadian diamonds is too compelling to continue to dither over, Kaiser argues. So the Snap Lake deposit represents a good gamble for De Beers.
For the same reason, Kaiser also favours Kensington Resources Ltd. (TSX.V: KRT) and its neighbour in Fort a la Corne, Saskatchewan – Shore Gold Inc. (TSX.V: SGF). This is because of the advanced-stage of both companies’ adjoining diamond projects. And of course, there is also the fact that De Beers is partnered with Kensington and is keeping the door open with Shore Gold should the junior’s recently initiated 25,000-ton bulk sample begin to yield plenty of diamonds in excess of one carat.
Kaiser also notes that De Beers would have to come up with as much as $25 million to finally bring Kensington’s mammoth 140/141 twin pipe to the threshold of a production decision.
“It’s going to take that kind of money to determine if this billion-ton pipe has large, gem quality stones that are well-distributed throughout. It’ll take that kind of consistency to justify a future production decision,” he said.
Meanwhile, Shore Gold will have to come up with some impressive diamond counts of its own in the coming months, particularly in terms of size and value curves. That is what’s needed to get De Beers to open its chequebook with an offer the diamond junior won’t want to pass on.
Meanwhile, the processing of Shore Gold’s bulk samples will surely prove to be a time-consuming process and results are expected to be announced throughout 2004 “in dribs and drabs,” as Kaiser puts it. This could easily hold off a feasibility study decision until early next year. Speculators will no doubt cast their votes on the future prospects of a diamond mine at Fort a la Corne by reacting to each bulk sample announcement that trickles out with a flurry of buy and sell orders.
“This could make Shore Gold one of the most volatile stocks of the year,” Kaiser cautioned.
But investors with steely nerves may be inclined to stay the course with Kensington and Shore Gold when considering how important their respective prized pipes could prove to be for De Beers -- the ever-pragmatic diamond cartel.
“De Beers is ‘hot to trot’ to develop Canadian diamond mines…Their diamond production in Botswana and elsewhere is going to dry up at some point, not too many years from now. Remember this is a company that plans along a 100-year timeline,” Kaiser said.
“And Fort a la Corne has the ability to feed De Beers with diamonds for the next 50 years.”
Later, he told captivated listeners that his “dark horse” picks for 2004 include Dr. Chuck Fipke’s Metallex Ventures Ltd. (TSX.V: MTX) and its joint venture partner, Arctic Star Diamond Corp. (TSX.V: ADD). Kaiser pointed out that Fipke has the discovery of the $3 billion Ekati Diamond Mine to his credit and is arguably the best -- or one of the best – diamond hunters in the world. But after spending over $8 million in the remote Attawapiskat area of James Bay, Ontario, Fipke’s diamond project still remains shrouded in secrecy.
Fipke is definitely hot on the trail of potentially economic diamond deposits in the vicinity of De Beers’ prized Victor pipe – which is on track to become Canada’s next diamond mine. But how close he is to a major announcement is anyone’s guess, Kaiser mused.
“Fipke seems to have established that there is a generation of pipes in Attawapiskat with no magnetic anomalies -- or ones that are so subtle they don’t show up on airborne surveys,” he added.
“And he has some geochemistry that suggests large stone diamond potential.”
Another well-regarded junior, Pele Mountain Resources Inc. (TSX.V: GEM), is however moving along a much more aggressive timeline in Attawapiskat than the notoriously methodical Fipke. Pele Mountain is presently drilling some magnetic targets in the hope that Fipke’s theory is far from watertight. Kaiser likes Pele Mountain as a long shot that could surprise everyone with one or more diamondiferous kimberlite discoveries in early 2004.
Meanwhile, north of Canada’s tree line, a number of Kaiser’s other favourite diamond stocks are also busy spending millions of dollars on their own top diamond pipe prospects. These well-managed juniors include Diamondex Resources Ltd. (TSX.V: DSP), Diamonds North Resources Ltd. (TSX.V: DDM), Shear Minerals Ltd. (TSX.V: SRM), Dunsmuir Ventures Ltd. (TSX.V: DVV) and Stornoway Diamond Corp. (TSX.V: SWY). None of these stocks are expected to make any earth-shattering announcements this year but they all have enough sparkle in their respective exploration plays to keep the Great Canadian Diamond Rush alive and kicking.
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