Mountain Province Diamonds Inc. (MPVD-T)

Sees no change to the dividend theory. The 3 Irish business millionaires actually control the company and are holding it long-term for the dividends. The company has some costs going on disadvantaging it. The diamond sector itself has not produced really stellar performance. This is a “wait and see”.

There are some issues in the end markets for diamonds. India had a de-monetization of currency late last year. The Indian diamond cutting and polishing industry is pretty much a cash-based fragmented market place. De-monetization has created quite a disruption and created problems for producers selling into it. He would be a little wary about this. However, there has been some M&A stirred up within the sector and there could be value buyers sniffing around, but the near-term profitability is a little bit murky.

Building a mine with DeBeers that should go into production by the end of the year. He prefers Kennady Diamonds (KDI-X) as he feels it is significantly undervalued relative to what he thinks they have, especially in the context that there is a mine on their back door that will be operating soon, and this will come back into DeBeers fold.

Diamonds. This just rolls on. When he bought it, it was 24% prospective yield on the basis of the 3 Irish billionaires who control the company, who simply wanted dividends out of it. It is readying and going into production shortly. He is still very positive on this.

The deposit is working very well technically, but the diamond market is in pretty rough shape now. It is responding to worldwide economic slowdown. The only diamonds that seem to be commanding big prices are the “fancies”.

Building a diamond mine in the Yukon. They have been working on the mine for almost 10 years, but are now just about ready to turn on operations. You make good returns in mining stocks when they go from a development company to a producer, because you get a premium as a producer.

A diamond developer in the Northwest Territories. Partnering with DeBeers in developing the Gahcho Kue mine. It has just started to come into production, which is usually when he likes to look at these. An extremely high grade mine. The valuation is attractive.

They are about 90% finished with the build. They will go into production next year. They expect to pay very big dividends. It should carry on. We have not had a mighty diamond mine introduced in 20 years.

Doesn’t own this, but owns its sister company Kennady Diamonds (KDI-X) which is next door. Mountain Province is in a joint venture with DeBeers. Feels that someday Kennady will ultimately be integrated with this company.

Likes the people and is sort of attracted to the deposit. He would probably own it except that he thinks Dominion Diamond (DDC-T) is cheaper. With Mountain Province you have the development risk and the problem of turning on that big plant.

It will probably march on and should not have any problems reaching production.

A diamond producer. They get big stones every now and then, which can shift their cash flows around. This has been better on a price momentum perspective. There are no meaningful earnings to talk about currently. There is really no way to value this company other than the assets they have. Valuation is not compelling for him and wouldn’t be something he would own.

The Gahcho Kua project is 51% DeBeers and 49% Mountain Province. It will commission this year and go into production. Lots of people are optimistic about it. When the diamond models were valued by WWW, the base case price was skewed towards the lower end of the low/high range, indicating the diamonds were not that great. However, when they did their 10,000 carat bulk sampling, they got several absolutely fantastic diamonds. The measured value of the carats is way in the money. The expectation is that when this goes into commercial production, there will be a repeat of the big, beautiful diamonds, and will carry this project into substantial profitability. You may have to wait until the end of 2017 to know if the high quality diamonds are showing up.

He recommends it based on dividend yield. It is going to be the next great diamond mine in the world. It is an amazing story, but not in production.

This is not the first bear market he has seen. This is the next new big mine. Diamonds have been going thought a bit of a dry spell. There were finance issues. The rough market for diamonds is up a little right now. He prefers to go in at a little earlier stage. He believes it will be consolidated.