John Kaiser's recent report
"...A careful read of Mountain Province's August 4 news release will reveal that the actual values of the Gahcho Kue bulk sample parcels are substantially higher than the modelled values which is due to several large very high value stones whose presence cannot be quantified in the value modelling conducted by De Beers and WWW. So unless these diamonds are super freaks not likely to be found again, the modelled valuations for Gahcho Kue which follow statistical methods likely understate what will be the value of commercial production. This is in contrast to most bulk sample parcels such as those of Shore Gold's Fort a la Corne project where the actual parcel values are well below the modelled values Shore Gold uses in its prefeasibility study. Patrick Evans points out that other large diamonds are present, and, understandably, does not mention than the bulk sampling of Diavik never produced anything like the larger Gahcho Kue stones. So when Bob Gannicott dismisses Mountain Province as too expensive, even as he tries to defend the continued ownership of the Harry Winston retail division which would be legitimized by a supply of large, high value Gahcho Kue diamonds, he is doing what any good
CEO should do to further his company's interest, namely denigrate a potential acquisition target. If Harrry Winston did absorb Mountain Province, it will likely not have the problem it has with Rio Tinto at Diavik where Rio Tinto always outbids Harry Winston for the specials because it controls downstream supply channels. De Beers still operates as a wholesaler through its "supplier of choice" system, and would never bid a price for a special that represents some of the value added by being able to accompany a diamond from mine to retail market. If Mountain Province and De Beers adopt a system for dividing the specials similar to what Rio Tinto and Harry Winston have at Diavik with which the Canadian government seems to be happy for tax purposes, a Mountain Province owned by Harry Winston would be in a position to scoop the specials for its downstream benefit. And that would be one more reason for De Beers to take out Mountain Province and end up with 100% of Gahcho Kue. Bottom-fishers and spec value hunters should continue to hold their positions for a price target range of $4-$6 which is now near term. "
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With the recent pull back ($3.89 5 days ago and now $3.35) I'd say a good time for those who want in (or want to add) to pick up some shares. I think the share price is heading to $5 in the short term and way higher in the mid to long term.
