Sunday, August 30, 2015

Bulk sample Comparison

Updated - Sept 19th, 2016

KDI just released its second bulk sample results from Kelvin.
Here is an updated summary table:

The numbers from Kelvin are similar to the 2015 bulk sample. It might be a little less coarse compared to the first sample, but that also could determine on the ratio of tonnages between the 4 different subsets with Kelvin.

The subset themselves look quite interesting. Here is a chart that includes both 2015 and 2016 results broken up by subset for Kelvin:

Looking at the normalized to 10000 stones category, it is pretty clear that the 4 subsets are very, very similar when it comes to the coarse distribution. They do have confirmed different grades (quite variable), but once 10,000 stones is achieved in a sample, they all produce roughly the same ratio of stones in the same sieves.

The additional line item at the bottom is Faraday 2. This clearly shows that it does show a different distribution compared to Kelvin and actually looks to have a better coarse distribution then any of the Kelvin results.

Chidliak still shows a higher percentage in the upper sieves compared to the lower sieves. There is potential for one or two other Chidliak kimberlite's to get bulk sampling done in 2017.

Updated  - July 25th, 2016

KDI just released a new 21.1 tonne sample from Faraday 2. A different kimberlite from the main Kelvin kimberlite. These results can now be put into the bulk sample comparison table.

Faraday 2 as a high stone count in the early sieves and drops off significantly in the later sieves. This is similar to Kelvin pipe. However, it does actually show a stronger showing in the upper sieves as compared to Kelvin. Faraday 2 might create a coarser distribution over Kelvin. CH6 and CH7 are still much stronger in the upper sieves as compared to both Faraday 2 and Kelvin.

January 2016 - Bulk sample from CH-7 did come out, but there was significant diamond breakage. Bigger stones turned into many smaller stones. It does not make sense to try and compare it in any of these tables as the # stones, etc. are flawed.

Updated - Oct 5th, 2015

KDI just released a 2+ tonne sample from one of their kimberlite's.
The table below compares it to a historic 2+ tonne sample from CH-6 to compare the population of diamonds and sizes.

 The trend is the same as the original post below. KDI has a lot more diamonds on the earlier sieves than PGD's kimberlites...but when you move up to the higher sieves, PGD's kimberlites bring more stones.

This is again related to the fact that PGD's kimberlites are bringing in a higher than world average size portion and this directly inputs into the valuation model as a key parameter.
The CH-7 bulk sample results will be coming out over the next few months. However, another project with Kennady Diamonds just released some new bulk sample results very recently.
This is a quick snapshot of the results for a bit of comparison analysis.

Included is the Kennady Kelvin recent results (KK-2015) and the CH-6 2013 bulk sample results and also the CH-7 2010 results from a smaller 50 tonne sample that was limited to just domain 1 of that kimberlite.

There have been certain circumstances that have made direct comparison difficult. This does not bold well for the investor who likes to make easy comparisons. Numbers to numbers. The true comparison will be when carat value comes out for Kennady Kelvin and that should be made available in a couple of months.

Comparing grades? (cpt?) on these bulk samples. First off CH-6 bulk sample dropped everything below 1 mm at the DeBeers Sudbury the 0.85mm+ grade is not accurate. The 1.18 mm+ grade is more accurate. The KK-2015 bulk sample chose to just release a 0.85 mm+ grade and not a 1.18 mm+ grade. The market is lacking information on a direct comparison.

The table above, has been normalized to both tonnage (however, that is reflective of grade).
It has also been normalized to 10,000 stones..and this should help when trying to compare a population with an expected value. The more stones weighted to the top (right of chart), the higher the valuation.

As you can see, the the KK2015 does become the winner in the lower part of the population curve...yet ch-6 does take the winner as the sieves get larger. So from a pure macro population curve, CH-6 does win and if that were the only input into a valuation model, CH-6 stones would be worth more. That is not the only category. It strongly depends on what quality (gem?), and type and colour are the larger macro sizes. CH-6 ended up with a large clear and off white octahedron population and the valuation model has already been released. KK2015 has come out with a couple of tinted brown's and a reasonable clear macle. It looks like CH-6 might have the better shapes and colour as well. KK2015 still has a significantly high grade, so it can still come out with a reasonable value $$/tonne even with a lower valuation per carat as compared to CH-6.

CH-7 mini bulk has been added to the chart just as a potential glimpse in to the larger bulk sample results coming up. The mini bulk was limited to Domain 1, but should equate reasonable well to Domain 3 and 4 for Grade. Domain 5 has significantly higher grade than Domain 1 and Domain 2 has a lower grade than Domain 1. The question is whether the population curve (normalized to 10,000 stones) is reflective in all 5 domains. If it is, and the curve holds above, there is a good chance that CH-7 $/carat value could topple KK-2015 and actually compete with CH-6 for the title. Again, there is little information on the type and colour expected out of the big bulk sample. Based on the mini bulk, CH-7 looks to have a more variety of types as compared to CH-6. Photos should be coming out over the next 2 or 3 months on the CH-7 bulk sample diamonds. Type (octahedran vs. macle vs. aggregate) will be a good driver for final valuation results. These photos should be analyzed and used as a good indicator of potential valuation results.

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