Blog

Stuffed

By Charles Wyndham.

There is no one definite rule as to how to stuff a turkey.

Every household has its own twist, even if it is simply buying the local butchers concoction or some pre fabricated de salivated filling mix.

In our industry, Mountain Province Diamonds Inc. and all who have invested in it must be feeling horribly like turkeys at the moment.

They have recently put out a press release informing the market that its bulk sampling programme for the Gahcho Kue project in Canada’s Northwest Territories has fallen through and the drilling will have to wait till 2008.

This years spring drilling got scuppered because of the problems with the melting ice road which affected all the mines in the area.

2007 travails have arisen because the operator De Beers Canada set such stiff performance conditions for the drilling that the contractor walked away from the work.

Getting any drilling company in this boom time for mining is difficult enough, to set such apparently harsh conditions would seem to me as an uninitiated, as sure a way of guaranteeing no progress as possible.

The net result is a possible two year delay.

For any company this is pretty bad news for, junior mining companies such delays are especially hard to handle.

At a time that De Beers is having to cut its ITO’s (i.e., the volumes of diamonds it is intending to offer in the first half of 2007) to so many of its clients and laying the blame primarily at the door of inadequate availability, an outsider might have thought that they would be going out of their way to find and develop new deposits.

In its role of Partner of Choice (PoC) the ubiquitous outsider might think that De Beers would be trying to shrug off the damage to its cuddly image induced by the string of failed court actions against Shore Gold, and get on do what most would expect a responsible operating partner to do.

Selfishly, I have never thought what a turkey might be thinking about its future stuffing. As the happy creature heads for Xmas, I presume, it probably is not pondering about whether it would prefer a chestnut or sage and onion stuffing for its moment of transitory glory.

It might, if the thought crossed its mind, even prefer to pass up on this moment of glory and pass on the stuffing altogether.

The forthcoming action in the High Court in London between Jayam and the DTC (De Beers) is going to be interesting for a whole bunch of other turkeys or sightholders or buyers of rough from De Beers as to just how much they may or may not have also gone through the stuffing process.

Behind the blurb about drilling conditions and the sugar coated promises of De Beers' Supplier of Choice strategy which is what begat ITO’s, there are some clear messages.

A key one is that De Beers is simply cash poor. It is doing everything it can to reduce costs. To the absurd point that as I have made before, that it expelled its pensioners from its London Christmas bash for the very first time, wrapping it all up in some revolting second class convoluted advertising balm of good will to all.

To go from the preening self congratulatory radiance of the cash figures for 2004 to the current position in 2006 is quite an achievement and says more than anything about the underlying logic of their strategy; just as its actions towards Mountain Province demonstrate with brutal clarity that leopards do not change their spots.

Bye the bye, if you are interested, I personally prefer chestnut stuffing.