Rough Diamond – Page 42 – The Diamond Certification Laboratory of Australia (DCLA)

The diamond dream is over: Rosendorff jewellers goes into administration

More than 110,000 Western Australian couples have celebrated a special occasion featuring a piece of Rosendorff’s fine jewellery.

An announcement to the Australian Securities and Investments Commission (ASIC) said a meeting of creditors was set to get under way at 11am Thursday.

Richard Tucker of KordaMentha Restructuring, appointed receivers and managers of Rosendorff Diamond Jewellers, said the business was holding too much stock.

“We are running a short highly discounted sale through the store to materially reduce the current stock levels whilst a sale or recapitalisation of the business is pursued,” Mr Tucker said.

I have always loved the mystique of diamonds. I’m attracted to the joy and romance they bring to their beholders

Craig Rosendorff
“It is a tremendous opportunity to acquire a very special jewellery item at very competitive prices and may also help save an iconic Perth jeweller.”

He said a secured creditor would support the receivers to ensure current special orders, repairs and lay-bys were completed in time for the special occasions they might be destined for.

“From proposals, to weddings and anniversaries, we understand the importance and significance these items have on people’s special memories,” Mr Tucker said.

Daniel Hillston Woodhouse of FTI Consulting has been appointed as administrator.

Rosendorff is an iconic West Australian luxury business specialising in diamonds and bespoke jewellery design headed by Craig Rosendorff.

In 1975 Mr Rosendorff renamed and launched what became one of the longest-standing diamond companies in Australia.

His rags to riches story has been dubbed The Diamond Dream.

“I have always loved the mystique of diamonds,” he says on the company’s website.

“I’m attracted to the joy and romance they bring to their beholders, the heritage and their connection to families across generations.”

The large, glamorous showroom in the centre of Perth on Hay Street has been the setting of many magnificent parties and events showcasing the designs of the Rosendorff team.

Mr Tucker said gift cards and store credits would be honoured while trade continues.

Source: watoday.com.au

White knight rescues collapased Rosendorff Diamond Jewellers

The Rosendorff fine jewellery business will carry on but under new ownership following a deal struck by receivers appointed last month.

Insolvency firm KordaMentha confirmed today it had struck an agreement to sell the business set up by Craig Rosendorff in the 1980s to an unidentified WA buyer also involved in the jewellery trade.

The deal, expected to be finalised in two to three weeks, guarantees more than 20 jobs and covers the Rosendorff trading name, stock and intellectual property.

Receivers from KordaMentha were put into Rosendorff Diamond Jewellers at the end of April.

The business, which owes at least $4 million to creditors, has shrunk on falling sales in the past three years to just its flagship store in Hay Street Mall.

The deal covers the Rosendorff trading name, stock and intellectual property.

Today’s sale announcement coincided with news the receivers are stepping up a discount sale which has already brought in between $2 million and $3 million.

The West Australian revealed yesterday that administrators from FTI Consulting had identified “irregularities” in the company’s accounts while sheeting home blame for the collapse to the mining downturn.

They questioned a $1.8 million shortfall in stock and four transactions totalling $170,000 where jewellery “left the store without payment”.

FTI said “there were limited controls around the accounting and inventory functions, which have led to some anomalies in the financial accounts”.

However, it noted that such irregularities were not uncommon, and there is no suggestion of any wrongdoing by Mr Rosendorff.

The firm’s statutory report on Rosendorffs also noted that Mr Rosendorff, who has invested millions of dollars in the business over the past 30 years, had drawn increasing amounts out of the company as its financial situation deteriorated.

Between July 2017 and FTI’s appointment, those withdrawals totalled $1.8 million, including $582,000 in the past 10 months.

The administrators says Rosendorffs had been under financial pressure for two years, citing “cash leakage” and a steady decline in sales after 2011, triggered by the end of the mining boom.

Gordon Brothers is owed about $2.2 million, Rosendorffs’ staff $400,000 and trade creditors $270,000.

Source: perthnow.com.au

Miner Petra Diamonds sells its 425 carat legacy diamond

Petra Diamonds said on Tuesday it sold its 425-carat ‘Legacy of the Cullinan Diamond Mine’ diamond to Belgium-based Stargems Group for $15 million.

The miner, which recovered the diamond at its flagship Cullinan mine in March, said the sale was significant for the company.

Petra has been struggling to clear its multi-million-dollar debts after it borrowed heavily to revamp the Cullinan facility and began mining a new section of ore last July.

However, Cullinan has been profitable every year since Petra acquired it in 2008 and the mine is expected to generate free cash flow this year.

Mountain Province Diamonds Announces Inclusion of 60 Carat Fancy Vivid Yellow Rough Diamond in its February Sale

Mountain Province Diamonds Inc today announces that it will include in it its upcoming, February rough diamond sale, an exceptional quality, 60.59 carat, fancy vivid yellow rough diamond. The diamond was recovered at the Company’s Gahcho Kué Mine in October 2018.

Reid Mackie, the Company’s Vice President Diamond Marketing commented “the discovery of this diamond demonstrates our ability to produce very large, high quality, fancy coloured diamonds. We are thrilled to be able to include it in our upcoming sale and present our customers with the opportunity to bid for this important piece of the mine’s history”.

Also included in the sale will be more than 50 other large, high quality white and fancy coloured rough diamonds. Viewings will take place between February 11^th to 21^st at the offices of Bonas-Couzyn in Antwerp, Belgium.

Mountain Province’s Gahcho Kué Mine, located at the edge of Canada’s Arctic Circle, is the world’s largest and richest new diamond mine and since the start of production in late 2016 has established itself as a regular producer of exceptional, gem quality, large diamonds. In 2018, Mountain Province sold more than 400 individual diamonds larger than 10.8 carats.

Source: prnewswire

Low Prices Trigger A Four-Way Merger Proposal For African Diamond Miners

Tough times in some parts of the diamond-mining industry has prompted an innovative solution, a four-way merger to create a new southern African diamond specialist.

The proposal, from the London office of the German bank, Berenberg, could see Gem Diamonds, Petra Diamonds, Lucara Diamond Corporation and Firestone Diamonds emerge as a single business with enhanced financial metrics courtesy of cost savings and a focus on big, high-quality gems.

If the deal happens, and at this stage it is just a proposal from Berenberg and not something the diamond-miners have embraced, the new business would have mines in South Africa, Botswana, Tanzania and Lesotho.

3% By Volume, 8% by Value

Collective diamond production would total five million carats a year, which is equivalent to 3% of global output, but more importantly the proposed business would account for 8% of diamond supply by value.

The difference between volume and value is the key to Berenberg’s plan which has been published at a time when miners of small and low-grade diamonds are battling a flooded market whereas companies able to supply high-quality gems are generating strong profits.

An uncut 25 carat diamond mined in Botswana.

Values At Trough Levels

Berenberg said in a research report titled “Consolidating African diamond mining” that current valuations of diamond mining companies were at trough levels with lacklustre enthusiasm for the sector.

“We think something new is needed to return this sector to its former glory,” Berenberg said.

The bank said the logical way to start the process would be for a transaction between Lucara and Gem, which would create the go-to business for large diamonds, followed by a transaction with Petra and then with Firestone rolled into the structure.

Each company has its own production profile but Lucara is the best known for big diamonds having given the world the monster Lesedi La Rona in 2015, an 1109 carat stone which sold for $53 million and has since been cut into 67 smaller gems by Graf Diamonds.

Strong Cash Flow

According to Berenberg’s multi-stage merger proposal the new business would emerge with annual revenue of around $1.1 billion and free cash flow of $200 million.

The merged business would overcome problems which hurt investor interest in smaller diamond miners including low stock-market value, high debt levels, project risk, limited growth options and a lack of return to shareholders.

“Our $1.3 billion market capitalization business would have listings in Canada, London and Sweden and, through the ability to pay an attractive dividend (we calculate a possible yield of 7%-to-8%) and the potential to attract investment from a range of global investors,” Berenberg said.

Source: Forbes

De Beers Sales Slip to $440M

De Beers recorded its lowest-value sales cycle this year as weak Indian demand prompted it to drop prices of cheaper goods.

Proceeds fell to $440 million in November as the miner reduced prices by high-single-digit percentages for rough diamonds costing $100 per carat or less, sightholders said last week. The Indian manufacturing sector has struggled with thinning profit margins due to relatively high rough prices and the weak rupee, while tighter bank lending has further contributed to a decline in demand. November is also seasonally slow as factories close for the Diwali festival.

Proceeds from the ninth sales cycle fell 6% compared with the equivalent period a year ago, and were down 9% versus the $482 million it garnered in October, De Beers reported Tuesday.

“As the industry’s focus turns towards the key end-of-year retail selling season, rough-diamond sales continued to be in line with expectation during the ninth cycle of the year,” said De Beers CEO Bruce Cleaver. “While demand for smaller, lower-quality rough diamonds continues to see some challenges, the latest cycle saw some signs of improvement in this area as factories in India begin to reopen after Diwali.”

Rough-diamond sales came to $4.85 billion for the first nine cycles of the year, in line with a year ago, according to Rapaport calculations. The company offers its rough goods at 10 sales cycles across the year, mainly at sights in Gaborone, Botswana. Its sales figures also include auction proceeds.

Image: A De Beers sightholder examines a parcel of rough diamonds. (Kieran Doherty/De Beers)

Source: Diamonds.net

Vast Resources Explores Potential Marange Mine

Mining company Vast Resources gained access to a section of Zimbabwe’s Marange fields with a view to developing joint operations there with a local community group.

The miner reached an agreement with Red Mercury, a subsidiary of the Marange-Zimunya Community Share Ownership Trust, to carry out due diligence over a two-month period at the Heritage Concession – a 15-square-kilometer area in the Marange fields.

If the concession proves viable, the companies will form a joint venture for exploration, mining and marketing diamonds from the site. Such a partnership would see Red Mercury provide the government-issued mining license, and Vast responsible for procuring funding to develop a mine.

The deal would fall in line with Zimbabwe’s indigenization laws, which require 51% ownership by a designated entity or community-share ownership trust. That law is currently under review, and could change in the next few months, Vast Resources noted.

“Having already agreed on the principal terms of the future joint venture with the MZ Community Trust, we have confidence that once the due-diligence period is complete, subject to final results, we can move swiftly in building a valuable diamond arm of our business, which is mutually beneficial for all stakeholders,” added Andrew Prelea, CEO of Vast.

Earlier this year, Vast signed a memorandum of understanding with Botswana Diamonds to develop Zimbabwe’s diamond resources and share information from past exploration of the region.

“I am delighted Vast has been awarded this exclusive access to part of the famous Marange diamond fields, and we look forward [to] working with them to realize the full potential of this area and others as they begin to emerge with Zimbabwe opening for business,” said Botswana Diamonds chairman John Teeling.

Source: Diamonds.net

ALROSA To Hold Auction Of Large Diamonds In Israel

Alrosa the world’s largest diamond miner, will hold an auction for the sale of special size rough diamonds weighing over 10.8 carats in Israel from August 19 to September 6.

The company will auction 202 gem quality rough diamonds with a total weight of 3,165 carats. About 100 companies from Israel, Belgium, India, Hong Kong and Russia were invited to participate in the auction.

“The end of summer is traditionally a good time for auctions the demand for rough diamonds is growing. It is also relevant for Israel where our goods are always in demand and most local companies specialize in large size rough diamonds. According to all these factors we made changes to our plans and increased the number of stones for the sale. Now we look forward to a high demand for our diamonds and good results of the auction,” said Evgeny Agureev, a Member of the Executive committee, Director of the USO ALROSA.

Under Russian law, diamonds of special sizes weighing over 10.8 carats can only be sold at auctions.

ALROSA will hold another auction in Israel in November.

Source: IDEX Online

Gem Diamonds Recovers 101ct. Stone

Gem Diamonds has unearthed a 100.50-carat diamond from its Letšeng mine in Lesotho, it said Friday.

The white, type IIa stone is the 11th over 100 carats the miner has recovered from the asset so far this year.

Gem Diamonds owns 70% of the Letšeng mine, with the state holding the remaining shares. The company also owns the Ghaghoo mine in Botswana, which it plans to sell.

Source: diamonds.net

95 carat diamond is company’s record sale

Mountain Province Diamonds sold the 95 carat rough diamond but declined to release the sale price.

Zimnisky estimates the 95 carat diamond value at US $2.5 to $3 million dollars. He based this estimate on the selling prices for similar diamonds.

The rough diamond sold for three times the previous highest price it’s ever gotten for a single gem.

The 95 carat diamond was recovered at the Gahcho Kue mine in May, which is located 280 kilometres northeast of Yellowknife.

Lucara Sells Two Huge Diamonds at $32M Tender

Lucara Diamonds have sold two exceptional large rough diamonds at the $32.5 million tender.

The tender included a 327 carat rough diamond that sold for over $10 million USD.

Lucara said the 10 stones ranging from 40.4 carats to a 472.37 carat rough stone a combined 1,453.06 carats, sold for an average price of $22,356 per carat.

The top seller was the 327.48 carat white diamond, which earned $30,900 per carat total $10.1 million.

Another exceptional size 472.37 carat light brown stone also sold but the miner has not publish its price.