O.K Alrosa will release its annual report this month but the chances of it going public in US markets is remote as Putin has emphatically stated that he would like to see privatization of Alrosa to take place on Russian exchanges but nonetheless there are some advantages on going public on the Pink Exchange, such as not having to spend unnecessary monies on audits, etc. this leads me to another avenue of opportunity for investing in GBDX via a reverse butt!
Canadian diamond company Aber Corp once had a brilliant idea, that of vertically integrating its diamond mining operation into diamond retailing. So they purchase Harry Winston and called themselves the Harry Winston Diamond corporation. At that time they touted the concept immensely...guess what happened....their liabilities increased several fold and finally in 2012 sold Harry Winston diamond retailing to Swatch luxury brand retailing!!! Diamond Commodities and Retailing are two differently animal...both are very capital intensive, the margins are competitive on the Retail side but not on the rough, distribution channel dynamics are totally different,,,,,,bottom line message, vertical integration does not cut it!
Of course, this brings about another opportunity to talk about, that of spinning off DeBeers jewellry which is a 50/50 joint venture with LVMH and the stores are operated by LVMH. They have about 50 stores worldwide. I think they really need to spin off the venture so that they can raise capital for expansion and manage for better profitability. Seems practical to me as LVMH already trades on the Pinksheets and they are totally familiar it. Note: recently DeBeers sold its stake out to the Anglo American mining company....so DeBeers Holding is now owned 85% by Anglo American and 15% by Botswana Govt.
