THERE could be diamonds in the hills near Nimbin.
A Sydney-based mining and exploration company believes the hills to the east of Nimbin could be rich with precious gemstones including diamonds and sapphires. With luck, the company believes it could become a multi-billion dollar investment.
Feldman pushes on with diamond hunt
Resource Stocks Magazine February/March 2001 By Sinead Mangan
Diamond Rose chief executive Pnina Feldman describes her quest for diamonds as a labour of love. Her latest deal has seen BHP farm into the prospective Upper Beta Creek project.
One-time headmistress, sister of Joseph Gutnick and executive director of junior explorer Diamond Rose, Pnina Feldman, could hardly be accused of not having strength of spirit.
Like many diamond explorers, she’s a risk-taker. Take Diamond Rose’s cash position – it’s skirting dangerously close to running dry.
According to Feldman, the New South Wales-based company has less than half a million dollars in the bank, but she’s willing to take the risk of pushing ahead with exploration this quarter in the hope that her field team turns up something special in the sparkler department.
“Considering how much money has been spent by other companies to find diamonds I think we’re doing pretty well.” Feldman said. “diamond Rose has spent $10 million over two years and we’ve been lucky in finding what we believe to be 21 (kimberlite pipes). Why wouldn’t we be lucky in the finding of diamonds?”
More than three years ago, Feldman was the toast of the mining industry. When Diamond Rose launched on the Australian Stock Exchange its fortunes soared – the 20c shares hit $1.75 on the first day of trading. Feldman made the Business Review Weekly rich list in 1997, which estimated her personal wealth at $80 million.
These days things aren’t looking so rosy. Diamond Rose’s shares are trading around 9c. but Feldman, the eternal optimist, believes the joint venture Diamond Rose recently struck with BHP over the Upper Beta Creek project in
Employing its Falcon technology, BHP has flown over Upper Beta Creek to try to pinpoint the exact location of the kimberlite pipes on the property. “We believe we are at the centre of a cluster and that companies like Striker Resources and what have you are on the periphery,” Feldman said.
Under the terms of the joint venture, BHP will manage and fund the Upper Beta Creek project through until bankable feasibility. After completion of a bankable feasibility study, Diamond Rose will contribute its equity share (50-50) of the project. An additional 9% of Upper Beta Creek can be earned by BHP upon the decision to develop a mine.
“I wasn’t particularly keen to do a deal with anybody unless I though it would be of benefit to the company because I am used to slugging it out,” Feldman said. “But the deal alleviates the whole worry of me having to (fully) finance the project.”
The issue of funding bears heavily on Feldman’s mind. Her private companies, mainly through Vageta Pty Ltd, hold about 51% of Diamond Rose.
“It (Vageta) is a privately financed company, but that’s my husband’s department,” Feldman said. “Whatever I’ve managed to finance and whatever I’ve managed to achieve in Diamond Rose initially and the takeover of Striker was due to his contacts. I don’t know these people.”
Diamond Rose will again rely on the kindness of strangers when it draws on a $4 million convertible note facility provided by Vageta. According to Diamond Rose’s annual report this could leas to an increased working capital of up to $28 million when coupled with the exercise of all attaching options.
The company’s overseas backers in the past have included a George Soros’ investment fund, Mountain Side Holding, which still holds 1.45% stake in Diamond Rose, and members of the
Diamond Rose’s falling out with Striker in 1999 is still a sore point for Feldman. “It (the Striker deal) proved to be a disappointment and a distraction rather than an enhancement,” she said. “I didn’t like the way things progressed with Striker once I got the money fro them.
“Things with Striker are okay now. It’s like family, it’s better when you’re separate.”
Working in the predominantly male world of mining has not worn down this mother of 11. “It’s being a CEO which is the challenge,” Feldman said. “I haven’t found being female inhibiting in any way. One thing I’ve had to learn is that business is business and anything goes.”
Diamond explorer and pittado miner, Diamond Rose NL has set its sights on two West Australian diamond explorers, Stiker Resources NL and Dioro Exploration NL. If successful, the takeover will represent a major expansion of Diamond Rose’s position in the
The bid is linked with the problems besetting Striker’s majority (20%) shareholder, Australian Gold Fields NL, which has fallen into administration after disputes with financiers Prudential Bache International and Rothschild
Diamond Rose proposes to offer one share in Diamond Rose for every ten Striker shares. If Diamond Rose were to acquire 100% of Striker this would result in the issue of 10,194,085 new Diamond Rose shares (if no options are exercised) taking the issued capital of Diamond Rose to 133,604,924 shares.
The 1-for-10 scrip offer for Striker values the company at $5.1 million, nearly half its market value of $9 million.
Both offers are subject to a minimum acceptance of 50.1%. In the case of Striker the offer states that none of Striker’s financiers, including Australian Gold Fields, can demand repayment of any loan facilities.
Dioro shareholders will be offered six Diamond Rose shares for one Dioro share, valuing the target at $4,954,091 compared to its present value of $3.69 million.
The December agreement between Diamond Rose and Dioro, in which Diamond Rose agreed to earn a range of interests in the King George and Casuarina tenements by paying $1.25 million and agreeing to spend $2.5 million on exploration, has been rescinded.
If Diamond Rose acquired 100% of Dioro this would result in the issue of 9 million new Diamond Rose shares lifting the issued capital to 133,319,022 shares.
Diamond Rose is currently evaluating Dighem survey anomalies at Striker’s Upper Beta Creek where at least four kimberlite pipes have been discovered by recent drilling and sampling, including Ashmore 1 and 2. Striker announced in December that it would commence a mining feasibility on the latter two pipes to assess their commercial potential.
Diamond Rose said the application of its resources to the area would be of immense benefit to shareholders.
Yes we have no Pittado
While most miners have been swimming against the tide in recent times, pioneering pittado miner, Diamond Rose NL, seems to have made a nice little earner out of their “unique” gemstone.
Following last year’s successful sale of one kilogram of Pittado to a
Duneier, one of the largest privately owned manufacturers of jewellery in the
The gemstones, which hail from the company’s Rocklea project in
Duneier plans to introduce Diamond Rose’s gemstones to world markets and will market the range in the United States, Canada and Japan through television promotion on television shopping networks and retail outlets.
The first
Diamond Rose said that as a result of this agreement it is anticipated that the company will show an increase in gross revenues of a minimum of US$4 million over the next 18 months.
Diamond Rose Chairperson, Pnina Feldman, said: “The Diamond Rose story lends itself to home shopping style of presentation of a company and its products. Our company has a colourful and rich background which will complement the appeal of our uniquely Australian products.
“Focusing on the gemstones’ association with
Commenting on the agreement, Duneier’s President, Marc Duneier, said: “It is very rare that a new gemstone is discovered that has such an extensive appeal.
“Pittado has a deep magic green colour that appeals across all market sectors and is ideal for television promotion”
“The Australian connection adds myth and mystery – the stone and the country have a great story to tell and we will be promoting the Diamond Rose Collection at a time of strong consumer attention and interest in
The market can expect to be bombarded with a series of reports from
The field season in
The exploration effort is one of the biggest seen in the
Juniors have joined majors, such as South African diamond king De Beers and BHP Billiton, in the hunt.
Most attention is on Diamond Rose’s Upper Beta Creek properties.
The company’s founder, Mrs Pnina Feldman, has not been shy of mentioning Diamond Rose’s coup in getting BHP Billiton involved in a joint venture.
BHP Billiton is serious about its involvement. It homed in on the Beta Creek properties after flying its Falcon gravity response technology over the ground.
The technology, acquired from the United States Navy and adapted for use an exploration tool, has helped identify potentially diamond-bearing kimberlite pipes at BHP Billiton’s Ekati diamond project in
The test is now whether the technology can be successfully applied in the Climber region.
Data gathered by Falcon has identified a series of anomalies on Diamond Rose’s ground which are about to be drilled out to determine whether they bear commercial quantities of diamonds.
Big pipes are needed as the diamonds are likely to be relatively small, lowering their value, but there is a chance to expand beyond Rio Tinto’s existing Argyle and Merlin mines to build a significant diamond mining industry in the region.
BHP now has rigs on site as part of its commitment to drill two holes in 12 identified anomalies.
It is the first time the Falcon technology has been put to the test in
Diamond Rose will be quick to disclose the results as they come to hand.
BHP has also flown the technology over the
Pnina Feldman’s ability to raise eleven children and spend a decade as principal of
Resources exploring would be a dull business without its many flamboyant players, who cock a snoot at convention as they roll the dice in search of riches. Most of these characters are men, but now there is a women who can stake a claim to being the most flamboyant of all.
Fifty-two year-old Pnina Feldman cheerfully describes herself as a: “housewife and a mother of 11 children” when she floated her Diamond Rose NL on the stock exchange in April last year. The 20 cent shares shot up to $1.75 in early trading. It that was not enough to attract attention, the chairperson rocked up at the
Pnina is almost literally following in the steps of younger brother Joe Gutnick, one of the most indefatigable gold miners and diamond hunters in
Diamond Rose, named after their mother who was killed in a car accident six years ago, owns 17 tenements at locations including Walgidee Hills in
It is unfortunate that tabloid journalists gave the company a whacky name because of its alleged search for the breastplate containing 12 Hosen gemstones worn by the High Priest in the Temple of Jerusalem 3000 years ago – an item unlikely to turn up in the Western Australian desert. As the prospectus made clear, Diamond Rose is simply searching for precious and semi-precious gemstones with similar attributes to the ancient Hosen stones which symbolize the 12 tribes of
For investors who do not wish to wait that long, Pnina Feldman says she has discovered five of the stones required, including green chrome jade-like objects which she has dubbed, and trademarked, pittados. It was this discovery which got her in a spot of bother. She called a press conference at her Bondi Junction office to announce that Diamond Rose had sold a kilo of the rocks to American consumers for US$2 million, utilizing the home-shopping channel QVC. Feldman gloated that Diamond Rose had 119,000 tonnes of the stuff and, after some back-of-the envelope calculations declared to be worth $35 billion. In fact she had mislaid a zero and the notional number – by no means supposed to be a serious forecast anyway – was $350 billion. The stock exchange surveillance department got most huffy about this and formally queried the company.
The AFX is not always consistent in hauling companies over the coals over supposed transgressions. Diamond Rose is not a stock that would attract widows and orphans. Pnina Feldman owns more than half of the shares herself – a circumstance that briefly rocketed her into the BRW rich list with a $435 million paper fortune in 1997, even though the AFX insisted 71 million shares of her vendor shares be held effectively in escrow for two years after the listing. The next biggest shareholder is one George Soros who is believed to own in excess of 10 per cent, as well as directly backing the company with a $4 million buy-in of certain leases. Most of the other shareholders are nominee companies giving addresses in places like
Pnina, like brother Joe, enjoys a strong following among the
Feldman briefly studied law at
Pnina Feldman’s ability to raise eleven children and spend a decade as principal of
In common with most resource companies, and all junior exploration chips, Diamond Rose shares have tumbled over the past year. They now change hands at around 44 cents.
The company needs a win to complement the pittado prospect. Pnina Feldman says she operates on the four “M’s” principal – Money, Management, Mining and Mazel, which is Hebrew for good luck.
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Feldman is married to Rabbi Pinchus Feldman and was principal of
- $80 million