Resource World Magazine

18 www.resourceworld.com d e c e m b e r / j a n u a r y 2 0 1 6 move with the global economy,'' said one diamond mining executive. "Almost uniformly across the industry, production is down, prices per carat are down, and buyers are wary," added Paul Zimnisky in a recent Diamond Analytics report. The downturn is illustrated by the fact that major producers such as Dominion Diamond, Lucara Diamond, De Beers and ALROSA (of Russia) are not requiring site holders to take goods that they are unable to sell. In the first 10 months of the year, De Beers reacted by cutting production and lowering prices by 10% at its site in late August. However Zimnisky said the company left prices unchanged at its subsequent site in early October, and some buyers responded by rejecting up to half of their parcels offered, an indication that addi- tional price cuts are still necessary in the current environment for some mid-stream clients to remain economically viable. "Anecdotes suggest that in some cases, it is still cheaper to buy polished on the open market than it is to buy rough directly and cut into polished,'' Zimnisky said. With rough diamond prices down 12% year to date, the share prices of diamond miners have been hammered. Year to date, ALROSA is down 18%, Dominion is down 34%, Lucara is down 24%. Also off 23% is emerging Canadian producer Mountain Province Diamonds, which is developing the Gahcho Kue diamond project in the Northwest Territories in a joint venture with De Beers. However, Peregrine Diamonds said it believes the market fundamentals in the diamond sector remain strong and pre- dicts that producers should benefit from a growing gap in supply and demand from 2018 onwards as major mines get depleted. Peregrine's flagship asset is the Chidliak diamond project on Baffin Island in Canada's Nunavut. The company's key objective is to define a resource base that would support a preliminary economic assessment in 2016. lIThIuM Leading Chinese lithium carbonate sup- plier Jiangxi Ganfeng Lithium Co. Ltd .raised its prices for the second time in the space of a month in late October, 2015, prompting industry peers to follow suit. Industrial Minerals, the market intel- ligence service, said the catalyst for the move is rising demand from the electric vehicle battery industry, which continues to support the market. The latest increase raised the sale value of its material by nearly 17% from $9,470 per tonne to $11,049 per tonne. Lithium prices are determined by the purity and chemistry of the material as well as the length of the contract between buyer and seller. "There isn't really a benchmark price,'' said Robert Mintak, CEO of Pure Energy Minerals, which is working to complete a preliminary economic assessment for its Clayton Valley lithium brine project in Nevada by the second quarter of 2016. Pure Energy leaped into the spotlight in September 2015, announcing a deal that could see the junior supplying Tesla Ltd.'s Nevada gigafactory. Provided Pure Energy meets certain terms and conditions, the agreement establishes a commitment for an annual purchase volume of product by Tesla over five years. Clayton Valley is adjacent to the Silver Peak Lithium Brine Mine and processing facility, which has been in production since 1966, using tradi- tional evaporation pond technology. It is now owned by Albemarle Corp. of Baton Rouge, Louisiana, which agreed to merge with the project's former owner Rockwood Holdings in July 2014. A new player in the emerging Clayton valley lithium play is Lithium X energy Corp. [LIX-TSXV] which completed a reactivation, signed an option to acquire a 100% interest in the NSP lithium claims from Clayton Valley Lithium Inc. and changed its name from Royce Resources. The project is contiguous to the only producing lithium operation in North America; the albemarle [ALB-NYSE] Silver Peak Mine, the world's largest producer. n

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