DIAMOND PAGE — Russians make history with public listing of

The public listing of diamond exploration company Almazny Bereg on the Central Russian Universal Exchange marks an industry first.

The company holds the development licence for the Verkhotina project in the Archangel diamond province of northwestern Russia. The share issue includes 300,000 preferred, non-voting shares at a price of 20,000 rubles each for a total of US$2 million.

The shares (described as the Western equivalent to “junk bonds”) are trading at about 65,000 rubles each despite the fact that a dividend rate has not been set. The run-up in price may be explained by the fact that the exchange thus far has only about 20 listings, leaving little supply for investors with depreciating rubles.

Archangel Diamond (VSE) holds 40% of Almazny’s 10 million common shares under an agreement which requires it to finance the Verkhotina project through to the feasibility study stage.

Seven diamondiferous kimberlite pipes have been identified on the property. Wide-diameter drilling is under way on the No. 401 pipe, the objective being to extract a 300-tonne bulk sample. Results should be available in March. Bulk samples of 100-150 tonnes will be drilled from two of the other pipes in the new year.

Exploration drilling on magnetic targets is also planned for January. Elsewhere Overseas

* Serengeti Diamonds (VSE) extended to June 15, 1995, the funding date for exploration expenditures on its diamond properties in Tanzania. The junior is earning a 40% interest in East Africa Diamond Exploration, which, in turn, holds 14.9 million hectares of diamond leases and licences in Tanzania. Production testing at Kahama is continuing. A 5-ton-per-hour mobile test plant is up and running, and bulk-sample results should be available in January. A 50-ton-per-hour plant will be commissioned in early 1995. * Sales of rough diamonds by De Beers’ Central Selling Organization (CSO) were US$4.25 billion for 1994, just 2.7% less than in 1993.

Demand for rough diamonds was strong for the first half of the year (particularly in the first quarter), largely as a result of demand in retail markets.

The CSO reduced supplies to the market beginning in the second quarter, following a build-up of stocks in the cutting centres (particularly of Indian polished).

Sales for the second half of the year were well below those for the first half — a situation created by two factors: the outbreak of pneumonic plague in India and evidence of Russian rough diamonds being sold directly to outside markets.

Retail demand for diamond jewelry remains high in East Asia and is showing signs of improvement in the U.S. Demand in Europe and Japan is generally weak, however, although there are signs that these economies are starting to recover.

* Redaurum (TSE) reports that it has completed its final diamond sale of the year from its 50%-owned River Ranch mine in Zimbabwe. The sale transpired in Antwerp, Belgium.

The sale raised US$1.115 million, with the highest price paid for an individual diamond being US$2,000 per carat. The parcel included the first pink diamond (weighing about 1 carat) produced at the mine.

Overall prices proved to be about 13% higher than the company’s own independent evaluation of the diamonds.

Redaurum anticipates that 1994 production from River Ranch will reach 150,000 carats.

United States

* In Wyoming, four angle holes drilled on magnetic and resistivity geophysical targets on First Choice Industries’ (VSE) Happy Jack property failed to intersect kimberlite.

However, diamond indicator minerals were found in stream sediments in the immediate area, and the company plans to conduct a diamond indicator mineral survey on all drainages and topographical depressions.

The company also has 16 joint ventures in the Candle Lake, Tobin Lake and Nipawin Provincial Park areas of Saskatchewan. Drilling of several targets is to begin in the new year.

Northwest Territories

* A $400,000 drilling program is planned for March on the NWT diamond prospect. Major General Resources (VSE) and the International Diamond Syndicate are earning a combined 40% interest from SouthernEra Resources (TSE) by spending $2.5 million.

The joint venture outlined six to eight drill targets based on favorable results from 80 samples, as well as the presence of several “unique” magnetic anomalies. Upon completion of the earn-in, Major General will have a 24% interest and SouthernEra, 60% The balance will be held by the Syndicate, consisting of Calco Resources (VSE) at 6.4%, Teryl Resources (VSE) at 6.4% and Agate Bay Resources (VSE) at 3.2%.

Saskatchewan

* Analysis will soon be performed on drill core from the Saskatchewan Diamond Syndicate’s CN-1 target in the Carrot River area. One hole tested a magnetic anomaly believed to represent a buried kimberlite, yet no visual results have been released.

Calco Resources (VSE) now holds a 15% interest in the property, while Swannel Minerals (VSE) and Golden News Resources (TSE) each hold 42.5%.