Paul Zimnisky: Canadian Diamond Miners Well Positioned

Speaking to Mining Weekly, independent diamond analyst Paul Zimnisky said that Canadian diamond producers may be the best positioned to weather the current weakness in the diamond market.
As quoted in the market news:

Despite current market conditions affecting the industry as a whole, the Canadian operators included, Zimnisky believed Canada was the best-positioned jurisdiction in the industry, given the quality of the projects.
“Looking at the Northwest Territory’s (NWT’s) Ekati and Diavik mines, for instance, they are still quite profitable projects, even in a weaker price environment. I think Dominion Diamond, which owns 89% of Ekati and 40% of Diavik, could generate almost $250-million in free cash flow next year and almost double that the following year, using what I would consider a conservative diamond price. The company’s market cap is only $750-million,” he noted.
The two diamond mines currently being built in Canada, De Beers and Mountain Province’s Gahcho Kué, also in the NWT, and Stornoway Diamond Corp’s Renard project, in Quebec, were already fully financed, meaning they would not need to raise money in the weaker investment environment.
Further, Mountain Province’s exploration spinout, Kennady Diamonds, just successfully closed a C$48-million financing in October, which would cover the company’s activities through to 2017, which, Zimnisky noted, was impressive relative to the company’s C$130-million market capitalisation.

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