Esr 2022 Share Discussion Threads

[tt14] 31/8/2007 21:09

The licences should be distributed soon.

[magnus9] 27/7/2007 12:24

Seems to be a shortage of diamond supply fron Russia - come on Everfor, get digging! :)

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Rough diamond sales down 7% at De Beers

Marianne Barriaux
Friday July 27, 2007
Guardian Unlimited

De Beers, the world's largest diamond producer, posted a 7% fall in rough diamond sales due to tight supplies and a dip in prices.

The group saw a 17% fall in pre-tax profit for the six months to end June to $467m (£230m), as sales fell to $3.4bn, hit by reduced supply from Russia and a fall in rough diamond prices at the end of last year.

The company said it had undergone a strategic review of existing mining assets, and continued to invest in a $2bn new mine-building programme. It also established new sales and marketing operations in Southern Africa.

The group said: "Expectations remain positive for consumer demand for diamond jewellery for the remainder of the year."

"Rough diamond demand is currently good, prices have been rising, and while the second half should improve on first-half sales trends, full-year sales by [its Diamond Trading Company] will continue to be constrained by availability."
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[magnus9] 18/7/2007 21:36

tt14
Good spot! I only read the RNS about the AGM which doesn't mention any share buyback. I found the full detailed statement about the AGM on EVE's website. I didn't bother reading it previously as I thought it was just a repeat of the RNS. Just goes to show - never take anything for granted in this game!



7. THAT the Company be and is hereby generally and unconditionally authorised, pursuant to and in accordance with section 166 of the Companies Act 1985 ("the Act") to make market purchases (within the meaning of section 163(3) of the Act) of fully paid ordinary shares, provided that:

(a) the maximum aggregate number of ordinary shares hereby authorised to be purchased is 10% of the issued ordinary share capital of the Company as at the date of the passing of this Resolution;

(b) the minimum price which may be paid for an ordinary share is its nominal value, exclusive of expenses;

(c) the maximum price (exclusive of expenses) which may be paid for an ordinary share is an amount equal to 105% of the average of the middle market quotations (as derived from the Daily Official List of the London Stock Exchange) for the ordinary shares for the five business days immediately preceding the date of purchase;

(d) the authority hereby conferred shall expire on a date being the earlier of 15 months from the date of the passing of this Resolution and the date of the next Annual General Meeting of the Company in 2008, unless previously revoked, varied or renewed by the Company in general meeting; and

(e) the Company may at any time prior to the expiry of such authority make a contract or contracts to purchase ordinary shares under such authority which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of ordinary shares in pursuance of any such contract or contracts.

References in this Resolution to the Act, or to sections of the Act, shall, where the context requires and where appropriate, include references to the Companies Act 2006 and any corresponding or similar sections of the Companies Act 2006, it being the intention that, to the extent permitted by law, the authority contained in this Resolution shall continue in full force and effect notwithstanding any repeal of the Act or any relevant part or section thereof.

[tt14] 18/7/2007 21:01

I read that Everfor want permission at the AGM to buy back some of their own shares - possibly even up to 10%. Why would they want to do this, unless maybe, they have found what they are looking for?

[magnus9] 14/7/2007 01:13

I think this article is a bit more apt!



South Africa: De Beers, Alrosa Agree to Explore Russia and Africa
Business Day (Johannesburg)
11 July 2007
Posted to the web 11 July 2007
Charlotte Mathews
Johannesburg

THE world's two biggest diamond producers, De Beers and Alrosa of Russia, yesterday formalised a joint exploration agreement they have been talking about for more than a year.

The agreement will help De Beers access Russian diamonds after a recent European Commission ruling prohibited it from buying rough diamonds from Alrosa, Russia's only producer, after 2008.

At a ceremony in Cape Town which was part of the pomp around Russian President Vladimir Putin's first visit to SA, the two companies signed a memorandum of understanding that they would undertake joint exploration projects in Russia and Africa.

The Diamond Trading Company (DTC), the marketing arm of De Beers, originally planned to buy about $800m of rough diamonds a year from Alrosa. After the European Commision ruling following an antitrust investigation, it must phase these sales down from $600m this year to $400m in 2008 and zero in 2009.

UK-based stockbrokers WH Ireland analyst James Picton said the agreement would facilitate De Beers exploration in Russia, which was a very prospective area for diamonds, with potentially more reserves than Botswana, the biggest producing country. De Beers had explored in Russia on its own and could continue to do so, but it would be easier in a joint venture with Alrosa.

A year ago De Beers MD Gareth Penny said it had held talks with Alrosa on joint exploration in Russia and Africa. He said then that De Beers needed to build up production in Russia to offset the loss of purchases from Alrosa.
De Beers and Alrosa said in a joint statement they were fully aware of the recent decision by the European Commission on their trading agreement, "and will operate in strict compliance with all competition legislation requirements".

Penny told analysts in April that De Beers would spend $100m on exploration in the current financial year, focusing on southern and central Africa, Canada, Russia and India.

De Beers and Alrosa together account for about 75% of the global diamond market. Alrosa's sales in the year to June last year were $1,6bn. Its biggest shareholders are the Russian Federation, with 37%, and the Sakha Republic (Yakutia) with 32%. De Beers' sales last year were $6,5bn. Its largest shareholders are Anglo American (45%) and the Oppenheimer family ( 40%).

[magnus9] 13/7/2007 18:57

Oooh, hey...are things starting to get serious?



13/07/07
President Vladimir Putin on hand during the signing of a memorandum of understanding between De Beers and Alrosa

Putin Present in South Africa at Signing of De Beers-Alrosa Memorandum

Russian President Vladimir Putin is making history; his two-day visit to South Africa is the first by a Russian Federation head of state to sub-Saharan Africa. According to local media, Putin has been busy laying the groundwork for future significant investments in South African mineral exploration, mining and the provision of nuclear fuel by Russian companies. As part of his historic visit, Putin was on hand during the signing of a memorandum of understanding between the world's two largest diamond producers, De Beers and Alrosa.

During the signing ceremony in Cape Town, Putin met with De Beers Chairman Nicky Oppenheimer for discussions. This memorandum follows year-long talks between De Beers and Alrosa on joint exploration projects in Russia and Africa. According to media reports, De Beers Managing Director Gareth Penny had said a year ago that De Beers' interest in strengthening its exploration in Russia was in order to build up production to offset the loss of purchases from Alrosa, as stipulated by the previous European Commission's antitrust ruling [which has since been annulled by the Court of First Instance.]

Sources say that the agreement will facilitate De Beers' diamond exploration in Russia, and that while the company has explored in Russia on its own in the past, the joint venture with Alrosa would make the undertaking easier.

Alrosa's sales in last year were US$1.6 billion while De Beers' sales last year were US$6.5 billion.

diamondintelligence.

[seagreen] 12/7/2007 22:08

blimmy some life!

[tt14] 12/7/2007 20:19

They proberly held that back from Monday after 300,000 shares cancelled each other out but that still left 50,000 shares bought.

[magnus9] 12/7/2007 15:40

And a tiny company that could go far if things turn out right.

From the latest annual report it looks like 85.72% of the shares are accounted for by the following:

Credit Suisse Client Nominees (UK) Limited 28.66%
Forest Nominees Limited 11.64%
Securities Services Nominees Limited 8.76%
Pershing Keen Nominees Limited 8.61%
Dr Sergey V Kurzin 5.56%
HSBC Global Custody Nominee (UK) Limited 5.55%
T. Hoare Nominees Limited 5.06%
Nri Inc. 4.55%
Pinnacle Trustees Limited 4.55%
Geoffrey Bush 2.28%
Donald Duncan 0.50%

The previous Russian article said Stephen Dattels owned 5.56% but he's not mentioned now. Possibly they had duplicated his holding.

Up 0.25p at the moment on no volume. I'm almost getting excited!

[tt14] 11/7/2007 20:47

Magnus9,

A tiny company that appears to have 91% of its shares "owned" - the big question is by who?

[magnus9] 11/7/2007 19:16

tt14

Things seem to be so fluid in the Russian diamond world it's hard to keep up. Only today The European Court of First Instance said that the ban on all commercial relations between Alrosa and De Beers effective from 2009 is manifestly disproportionate.

I can't help feeling a tiny company like Everfor could be quickly squashed by the big boys and the licences grabbed if the rush for diamonds gets serious.

[tt14] 10/7/2007 21:18

Magnus9,

Maybe Everfor/De beers + a russian partner? will have two of the licences and Norilsk Nickel/BHP will have the other two.

Interesting to see the opening lines of the final results stating Everfor Diamonds is "developing deposits" - what deposits?

[magnus9] 10/7/2007 02:48

Are Norilsk Nickel and BHP Billiton after Everfor's licences? I'm a bit wary of this news item especially after seeing the latest Everfor report and accounts now contains 2 pages of risk warnings (which weren't in last year's report).



Norilsk Nickel plans to obtain licences to explore for diamonds in the Murmansk region

MOSCOW, 9 July 2007, 18:56(Prime-Tass).Norilsk Nickel plans at the start of September 2007 to obtain licences to explore for diamond deposits in two areas of mineral resources in the Murmansk region – in the Kharlovskaya and Khibinskaya sites. This was discussed in a PRIME-TASS interview with the deputy general director and head of the company's geological unit, Maksim Finsky.

He said, "Literally a few days ago the receipt of applications ended for obtaining rights to use mineral resources for geological study, exploration and appraisal of diamond deposits in these mineral resource sites. There are no other applications besides ours, so that by the start of September we hope that licences to use the mineral resources will be drawn up and registered".

"The given projects will be implemented jointly with BHP Billiton", added M.Finsky.

Norilsk Nickel is one of the world's largest producers of precious and non-ferrous metals. It accounts for more than 20% of the world's nickel production, more than 10% of cobalt production and 3% of copper. In the Russian market Norilsk Nickel accounts for 96% of total nickel production, 55% of copper and 95% of cobalt.

[magnus9] 09/7/2007 10:13

Some buying today. Something about to happen?

[magnus9] 27/6/2007 16:10

Hey, all of you out there, don't forget the Russian diamonds show is now on QVC. Looks like pretty high quality stuff. Will Everfor ever be producing these I wonder!!

[magnus9] 24/6/2007 17:25

Might have a look at this on QVC:

Russian Diamonds by Kristall • Wednesday 27 June • 4pm

This special collection of jewellery features Russian diamonds set in luxurious 18 carat gold. The high quality pieces will help you look and feel like an empress.

[magnus9] 23/6/2007 16:04

Besides the Resource Investor article I only found one other reference on Google to "GGK Cave Ltd." and that was a link to a PDF version of the same report. Use of the word "Cave" has been a mis-translation or rather mis-transliteration.

But when checking the latest Everfor report and accounts (y/e 31.12.05) there is a reference to a subsidiary called "LLC Mining & Geological Company Keiv". (There's also a reference to "Kiev Mining and Geological Company" but I think that's just a typo and it should have been Keiv). I also discovered that Keiv is a geographical area on the Kola peninsular. BTW, this is a link to an awesome website on Russian minerals if you haven't got it already. Mentions Keivy mountains etc.


So, it would appear the company that holds the licences is OOO GGK Keiv.
This company is mentioned in a Russian report on the Central Kola Expedition and it details the company members as being:

Chairman - Sergei Vladimirovich KURZIN
General Director - Vladimir Petrovich DUBYAGIN
Don J. DUNCAN
David SWAN
Yuri Ivanovich RADCHENKO

(in Russian)

There seem to be quite a lot of connections between some of the OOO GGK Keiv board members and Everfor, Oriel Resources and Ovoca Gold (not forgetting Eurasia Mining as well!!)

[magnus9] 22/6/2007 21:22

The following extract from the above report is revealing. Trying to find out more about the company "GGK Cave Ltd." which apparently holds all the licences in the area - intriguing:

Murmansk Region. At present, discovery of diamond deposits is most probable in the Murmansk Region. The conclusion stems form the estimate of potential undiscovered resources as of 1 January 2003. The area in the southeast of the Kola Peninsula features the best prospect. It is virtually identical to the Zimneberezhnoye kimberlite field with the Lomonosov deposit further to the southeast in terms of its structural position and occurrence in the geophysical fields.

Virtually all promising areas, whose Category P3 potential undiscovered resources were estimated as of 1 January 2003, were licensed for geological survey and diamond prospecting in 2004. All licences are owned by one company, GGK Cave Ltd., which obviously is unable to handle the volume of work. This is clear from the company's proposal in 2005 to relinquish part of one of its licence areas due to its being unpromising in terms of diamond deposits. At the same time, analysis of the work done proved that the volume of work stipulated by the licence agreement had not been completed at the area in question, i.e. the area had been surveyed properly.

[magnus9] 22/6/2007 13:00

This just might be worth a read! (Although the Resource Investor article is dated 20.06.07 I think this report was done in 2006)



Problems of Diamond Exploration in Russia

[magnus9] 21/6/2007 19:28

This looks interesting.



Diamond market in derivatives move

By Gillian Tett in London and Michael Bleby in Johannesburg
Published: June 21 2007 19:01 | Last updated: June 21 2007 19:01

Investors who fear that high diamond prices may not be forever will soon have help at hand.

Bankers and diamond experts are to launch two initiatives in the coming days to create the world's first derivatives contracts linked to diamond prices.
The move could inject new price clarity into the diamond market, which has been one of the most secretive and opaque corners of the global commodities sector.

Also, this could give consumers more bargaining power when buying diamonds.
"This will bring more liquidity and transparency – this will inevitably help consumers," said Charles Wyndham, head of polishedprices.com, a specialist diamond information provider which is talking with financial players such as ABN Amro to create diamond derivatives. Icap, Cargill, London Metal Exchange and the Chicago Board of Trade are also involved in these talks.

"This is about opening up the market – creating a free market," echoed Martin Rapaport, head of a diamond pricing and brokerage service in New York, which is launching a separate diamond futures initiative, and is seeking regulatory approval in the US.

The move is striking, because the diamond industry – unlike sectors such as gold – has hitherto fiercely resisted efforts to introduce transparent pricing or complex financial products.

However, in recent months, banks, such as ABN, have become keen to develop products that would allow them to hedge against their credit risk to the diamond sector. The credit exposure of banks to diamond production has doubled in the past three years to $12bn. Bankers also hope that applying complex financial technology to a new commodities market would provide a new source of profits.

Some producers are sceptical about whether futures contracts will work, given that stones are not homogeneous. Stephen Lussier, communications director of De Beers, the world's leading diamond company, said: "There are very real challenges with implementation".

Diamond production last year was worth about $13bn, with $63bn of global diamond jewellery sales. Diamond prices have risen sharply in recent years, due to high industrial and consumer demand – a factor that leaves some players keen to explore ways of hedging their price risk.

[tt14] 29/5/2007 22:30

I wonder who really owns Everfor? De Beers, the Russians, Ambramovich...?
It seems like De Beers could be gearing itself up for a grand enterance into Russia. What with the possible 4 Kola projects that it just so happen to have stumped up half the money for, with the 40% ownership of the Grib still to find a satisfactory outcome and with a possible muted joint venture into Severalmaz being mentioned; and also with the down-sizeing of some of its South African mines, maybe the time is right for it to enter the Russian market, even as a 49% minority holder, as Russia offers a future that possibly no other country can.

[magnus9] 29/5/2007 20:14

Lots going on in the background it would seem in the Russian diamond scene.



DISUNITY IN OPPENHEIMER CLAN
De Beers takes ceremonial bow in Moscow
De Beers silent, Alrosa dismissive of Penny visit to Moscow, while Anglo rumoured to be planning buy-out, break-up strategy for its sister company.

Author: John Helmer
Posted: Monday , 28 May 2007

MOSCOW -

One of the greatest of the English humourists, writing under the pen-name of Saki, once opened a tale of a disastrous horse-ride with the observation that one of the characters "was looking about as pale as a beetroot that has suddenly heard bad news".

To aficionados of Saki, the wit is hilarious; but to the literal-minded, doubts arise - beetroots are purple, not pale; vegetables can't hear bad news.

On the immediate occasion of last week's ceremonial visit to Moscow of De Beers' chief executive, Gareth Penny, not a word has been issued on the occasion by De Beers. Releases from the federal Ministry of Natural Resources, the Sakha regional administration, and Alrosa all confirm Penny's passage. He met Mining Minister Yury Trutnev (not for the first time); Sakha President Vyacheslav Shtirov (not for the first time); and Alrosa's new chief executive, Sergei Vybornov (debut). He also talked to with the Russian diamond sector's supervisor, Finance Minister Alexei Kudrin, according to his ministry.

Why De Beers has been silent isn't known, although there might be some apprehensive reddening on Charterhouse Street, if Penny could hear what the Russian diamond sector has been thinking in his wake. Like Saki's beetroot, however, Penny can't hear the bad news.

This bad news comes in three instalments.

The first is buried in the release from Trutnev's ministry, in which the minister is reported as telling Penny that "we do not close access to Russian resources for foreign investors. But we want that, for unique and large deposits, foreign companies work in close contact with Russian mineral resource users." To which, Penny is reported by the ministry as replying that De Beers "intended to follow in full the requirements of the Russian legislation."

What this exchange means is that the Russian government has no intention of modifying the legislative ban on foreign diamond miners taking more than a 49% stake - less than equity and operational control - of domestic diamond discoveries, or mines. This ceiling already led Penny's predecessor Gary Ralfe to bail out of the Severalmaz company, which holds the licences to mine the Lomonosov diamond field in Arkhangelsk region, and sell the property several years ago to Alrosa, for a pittance. Ralfe was also unable to secure Russian government assistance to retrieve the 40% stake an affiliated company, Archangel Diamond Corporation (ADC), held in a diamond find it had discovered and explored nearby, at the Verkhotina prospect; also in Arkhangelsk region. That asset is currently controlled by Russian oil magnate, Vagit Alekperov; De Beers continues to chase him through the courts and tribunals of Stockholm and Colorado.

If De Beers accepts that it is excluded from prospective new Russian diamond mines, and even from the one project in which it has a legal claim, what exactly is there for Penny to discuss in Moscow? It cannot be mining, for the Russians are offering next to nothing, at least not at home. It cannot be the trade in rough diamonds, for De Beers has agreed with the European Commission (EC) to terminate its Russian export trade at the end of 2008, and is opposed to Alrosa's appeal in the European Court against the ruling.

That leaves cold as a cucumber the cooperation to which De Beers and Alrosa committed to paper last September in South Africa, when Penny accompanied Nicky Oppenheimer at a series of meetings with President Vladimir Putin and his delegation. The document, termed "historical" in the press release, culminated in more than a year of technical and senior executive-level talks, in which De Beers and Alrosa agreed on nothing concrete, except not to show the hostility which flashed from Alrosa when De Beers pulled off its EC deal behind Alrosa's back.

According to the statement that followed the signing of the MoU, "an historic agreement was signed between Alrosa and De Beers in Cape Town today, to examine opportunities for carrying out joint diamond prospecting and exploration activities in Russia and, in due course, other regions of the world, including Africa." Then chief executive of Alrosa, Alexander Nichiporuk, clarified the geographic limits of cooperation, noting: "So far we're planning to work in Northwest Russia. We hold quite a lot of licenses and opportunities there, so we will be looking at the most viable areas of cooperation with De Beers." Also, according to De Beers spokesman, Lynette Hori, "the focus of the exploration efforts will be on North West Russia." But she also made clear that "ADC is still in dispute over the Verkhotina project . We do not currently plan for the Verkhotina project to be a possible point of co-operation."

What that leaves is a stake in Severalmaz, for De Beers to come back to, and which Vybornov has already tried selling to Israeli diamantaire, Beny Steinmetz, among others - without signal success. The financial liabilities of the project have been assumed by Alrosa, and currently exceed $120 million. Beetroot-coloured questions arise about how the money has been spent.

A big, brave, and imaginative deal might be one in which Alrosa relieves itself of some of the accumulated financial embarrassments of Severalmaz; and in return for a $220 million cash injection from De Beers, the two companies might together take over Alekperov's blocking stake in the Verkhotina project. This would then allow the two sites, and several pipes, to be combined for mining and processing. Alekperov has been heard to say he will never sell to De Beers, but that need not be the end of the matter.

The second instalment of bad news, which Penny may not have heard during his mid-May meetings, is that there is considerable reluctance on the part of Vybornov to join De Beers in such a venture; or indeed, in any venture. Sources in a position to know told Mineweb that between Vybornov and Penny nothing useful, nothing concrete took place. That makes twice for Penny in the six months since the Cape Town agreement on cooperation was signed.

That leaves the third instalment of bad news, and this one appears to be even more beetroot coloured than the others.

A major Russian mining source has come into the possession of a report on the Anglo American Corporation's prospects, recently gathered from sources in London and Johannesburg. This report suggests that the Oppenheimer family has a limited future in the management of De Beers; that Anglo American's new management is likely to dispose of both chairman Nicky Oppenheimer and executive Jonathan Oppenheimer when their management contract runs out shortly; and that what may then follow is the break-up of De Beers, with the mining assets to be absorbed by Anglo; and the marketing and downstream investments to be left with the Oppenheimers. If that is happening, Russian diamond miners calculate, there is little point in undertaking mining ventures with Penny, the Oppenheimer appointee, until later, when everything will be clearer, and someone else may be in charge.

"Anglo's strategy of restoring focus and exercising greater control", according to the report text, "means that its preference is for wholly-owned subsidiaries. Anglo's 55% interest in De Beers, therefore, is the odd one out if their rights are significantly affected." The provenance and credibility of the leaked report appear indubitable, but confidential, if embarrassing, details can be omitted here. Suffice it to quote one of the report's conclusions supporting the theory that the new chief executive of Anglo, Cynthia Carroll, is likely to pursue a buy-out, break-up strategy towards De Beers. "Disunity within the Oppenheimer clan is the most likely catalyst for change," the report suggests.

[tt14] 20/5/2007 09:12

Thanks Magnus9. Sounds highly likely to me.

[magnus9] 19/5/2007 20:33

tt14
No offence taken about the translation thing. Machine translation has its place but can lead to problems if used wrongly. In fact, that bit from the Barents Observer might well be a good example. When clicking on the "Read more" button the Russian text appears (albeit in the wrong coding) and this only mentions the PGM deal done at the time costing EUA $3m and 10m shares. No mention of diamonds anywhere. It's a strong possibility that a machine translation of another story could have been misinterpreted where "diamond drilling" was mentioned i.e. it doesn't mean they were drilling FOR diamonds but were drilling WITH diamond drills!!! Sounds like a classic.

There's an outside possibility that, if EUA and EVE are as closely linked as I think, someone in April 2005 could have assumed they were to all intents one and the same company and by mistake they mentioned Eurasia Mining instead of Everfor in that article!