Category Archives: Mining

Transitioning to Lab-Made Diamonds

The weather is warming up and the sun is finally shining. As engagement season approaches, there is generally a rise in sales in the diamond industry. With the increasing popularity of factory-made diamonds, however, authentic diamond sales have been slowing down.

Independent diamond industry analyst, Edahn Golan, explains that the number of engagement rings with a lab-made diamond sold in March increased by 63% compared to last year, while the amount of traditional engagement rings featuring a natural diamond decreased by 25%. Data from February showed an even larger increase in purchases of rings with manufactured diamonds, at 80% more than the previous year. Golan cautions, “The big fear in the natural diamonds industry is that consumers will start accepting lab-grown diamonds in engagement rings.” He continues, “Too late. It’s actually happening.”

Why the switch to man-made diamonds?

The most apparent reason is cost. With a one-carat round lab-made diamond retailing at $2,318, it’s equivalent natural stone would average at $8.740 – a difference of over 70%. This disparity enables couples to purchase larger stones without worry about compromising on clarify or perfection.

Aside from cost, manufactured diamonds are becoming more popular as the population learns more about them. Negative association connected to child labor in African diamond mines and “blood diamonds” used to finance conflict in war-torn areas leaves a bad taste to many. According to The Knot wedding planning website, the younger population is more conscientious about the background of natural diamonds and the ethical issues related. A lab-made diamond offers an appealing solution.

Large jewelry companies are accommodating these new concerns and the market trends. Zales and Kay Jewelers are producing more man-made bridal options. Pandora, the world’s largest jewelry company, made a drastic move last year, announcing the company’s plans to stop using natural diamonds altogether, and shift to manufactured diamonds only.

If the statistics from the past few months are telling, it seems that demand for manufactured diamonds will only continue to increase. As long as budget and ethics remain priorities for consumers, more jewelry companies are bound to follow the path some major ones have already taken.

Diamond Giant Alrosa Names Female Head

Rare twinned diamond crystal. Photo courtesy Robert M. Lavinsky

The world’s leading producer by output of diamonds, Alrosa, appointed Rebecca Foerster to lead its USA division.

The move comes the reopening of its offices in New York last year, together with expanding sales in the US. The company chose an experienced female executive to lead its American operations; Foerster is former Vice President of Strategic planning and marketing at Leo Schachter Diamonds, a position she held for four years.

She has previous experience as Vice President at the US Representative office of Rio Tinto; executive roles at Frederick Goldman Inc, Revlon, Unilever, and Benckiser.

“The United States is the world’s largest market for diamond jewelry consumption. For this reason, special requirements are placed on the person who will represent Alrosa’s interests there. Foerster has a wealth of experience in companies that represent almost all parts of the diamond pipeline, from diamond mining to diamond jewelry sales. She knows the specifics of the diamond business and is well aware of American market needs,” said Deputy CEO of Alrosa, Yury Okoemov.

In 2016 Alrosa closed its New York office for “organizational reasons.” Since the office reopened in 2018 business has been expanding at a pace to the extent that from the two rough diamond auctions held last year in New York the company will have four such events in 2019. Alrosa, which mines diamonds, plans to also offer polished diamonds to the US market this coming year.

Gold is on its way up

Gold is on its way up again and so is Randgold Resources Limited (GOLD) on its way up. Starting on September 20th, the stock fell from $113.45 to $92.61 on October 4, 2011. Since then it has been inching its way back up and today it is trading at $108.90. The stock is trading above its 200-day moving average of 91.40 and also above its 50-day moving average of 103.16. Randgold has a market capitalization of $9.5 billion and a beta risk factor of 0.46. While regular gold stocks tend to be directly related to the price of Gold, mining stocks only have to cover the production costs to be profitable.

Randgold has partial ownership in mines located in central and western Africa. These mines are: the Loulo mine in Western Mali; the Gounkoto gold deposit in Mali; the Kibali mine in the Democratic Republic of Congo; the Morila mine in Mali; the Massawa mine located in Senegal and the Tongon mine located in the Ivory Coast. What I like is that this company has several different projects in different locations. If something happens to one the company’s projects, the diversification will balance the loss and lower the total risk.

Randgold was founded by Mark Bristow and has been is gaining in profitability over the last 3 years.

Disclaimer: The content used in this article is for educational purposes. All investments should be thoroughly analyzed before being transacted.

Endeavor Silver Reports Excellent Third Quarter

Silver Bullion
Endeavor Silver (Exk) had a solid third quarter. Gold mined rose by 7% yoy to 4,926 ounces. Silver mined rose by 8% to 858,738 ounces. Revenues rose by 93% to $38 million for the sale of silver and gold mined and produced by the company. Endeavor has also expanded its Guanajuato plant and remained within its expansion budget.

While the stock tumbled From $12.60 to $8.04 in late September due to the fall in the stock market, Endeavor stock has stabilized and seems to be headed up. It is presently selling at $9.83. Its 200-day moving average is $10.57 and its 50 day moving average is $10.10. Endeavor also has agreements to purchase silver at cheap prices from silver mines in Mexico and Chile. In addition, since silver has industrial and jewelry applications, it should go up over the long term.

Mario D. Szotlender and Ricardo M. Campoy are 2 directors at the company.

Disclaimer: The information contained in this article is for educational purposes. All investments decisions should be thoroughly analyzed before purchase.

Minefinders Can Be Money Finders

Gold Ore Straight From The Mine
Minefinders is an exploration and mining company based in Vancouver, Canada. The company owns mining properties in Canada, The United States, and Mexico. One of its biggest mines is the Dolores mine which has many millions of ounces of silver and gold and is in northern Mexico. In addition, the company has exploration properties in various phases of development.

Over the last year the stock has risen from $10 to $18 and is presently trading at $14.40. The company has purchased new equipment and its gold production is up 42 percent since second quarter last year. During the second quarter it produced 19,571 ounces of gold. Silver production has risen four times since second quarter last year to a million ounces.

The revenues for the second quarter of 2011 were 73.1 million dollars over last year’s second quarter revenues of 21.6 million dollars.  

Net income for the second quarter was $30.5 million which equaled $.38 per share. This was up from last year’s second quarter loss of $2.4 million of $.01 per share loss.

The company’s shares are traded on the Toronto Stock Exchange, on the NYSE and on the American Stock Exchange. What is nice about mining stocks is that they can make money as long as they cover their production costs. The price to mine and refine gold is approximately $400 an ounce. As long as gold prices remain above that the gold mining companies profit. I don’t see gold going down below $400 for a long time.

Among the main officers are: Mark H. Bailey, the CEO; Gregory D. Smith, the CFO; Tench C. Page, VP of Exploration; and Thomas Bagan, VP of Corporate Development.