EPD could this go to £40 per share ?????

>Stephaans

I discussed Letseng with EPD's management at the AGM. There's been quite a bit of news about Letseng over the past year, what with the murder and all.

Anyway, the problem with Letseng is their low grade. At best they are getting between 3 and 4 carats per hundred tonnes, which is barely economic. The only reason they can afford to mine though is because of the oversize. Letseng produces far more large gem quality stones than any other mine. Just in the last year they found four, more than a hundred carats each which sold for $6 million at market.

In fact, although large stones are generally extremely rare, Letseng has been the source of some magnificent stones. However, the word is that these stones are saturating the market and dropping the prices. After all, there are relatively few mega-rich who can afford these diamonds. The Sultan of Brunei is one and he has a penchant for coloured fancy diamonds.

The gossip I heard was that Letseng is going to have problems soon and this maybe why (Matodzi & JCI) sold out. The mine is going to have to increase the investment in the area. The Government has already agreed the figures for the spend which are increasing substantially. This could make the mine unprofitable again - the principle reason why De Beers gave up on it in the first place.

This does not reflect on Liqhobong though. The grades at Liqhobong are far higher and the stones are mostly fancy yellow. There are fewer oversize, but then the colours and quality of some of the stones will make up for this. If EPD finds a few oversize as they expect each year, interest will be perked up. EPD do not consider anything under 20 carats as oversize though. Even though a few of the smaller stones have carat prices similar to far larger stones.