Robert Cohen B.A.Sc., MBA, CFA
Tahera Corp
TAH-T
DON'T BUY
Jan 03, 2008
Diamond stocks are not necessarily a cakewalk. This is a story where a mine was put into production in the North West Territories, but costs were a lot higher than expected and the company ran into cash flow problems and the grade was not what they expected.
Had a problem recently in that production was much lower and grades where much lower. A well structured company. They have an agreement with Tiffany Diamonds.
This has had a terrible downtrend. Any future sell offs you don't want to make a new low. If the November low, which is now being tested, holds it could be a sign of a new bottom. After that, you want to see if you could make a higher high.
Has been watching this. Has had a long cycle of exploration, development and production. During the anticipation phase, companies get quite well valued, but seem to drop at production time. Would look for it to be bottoming out.
They are out of money and are doing a rights offering. Their big partner Teck (TCK.B-T) has decided not to participate. This is a sign that there is not much left there.