Round Table across Canada The Diamond Industry
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The Diamond IndustryThe Diamond Industryacross Canadaacross Canada
MontréalMontréal Round Table Round Table 25 May 200525 May 2005
IntroductionIntroduction
�� Many positive developmentsMany positive developments�� Third largest producerThird largest producer
�� Some challengesSome challenges�� Many opportunitiesMany opportunities
Outline of presentationOutline of presentation
�� Evolution of the industryEvolution of the industry�� Since May 2004Since May 2004�� Review the pipelineReview the pipeline�� Parallel segmentsParallel segments
�� ChallengesChallenges�� OpportunitiesOpportunities
ExplorationExploration
�� Close to half of the world explorationClose to half of the world exploration�� Over 190 companiesOver 190 companies�� Over 100 projectsOver 100 projects�� Three territories and six provincesThree territories and six provinces
�� Over 100 million acres Over 100 million acres �� Over $169 million in 2004Over $169 million in 2004
USA
ALASKA
Yellowknife
Edmonton
Vancouver
Whitehorse
Ellesmere Island
Melville Peninsula
Otish MountainsJames bay
Buffalo Hills
Fort a la Corne
Coronation Gulf
Rankin Inlet
MinesMines
�� EkatiEkati�� 5 million carats in 20045 million carats in 2004�� Underground miningUnderground mining�� Koala underground Koala underground
feasibility studyfeasibility study�� ISO 14001ISO 14001�� Top 100 employersTop 100 employers Ekati
Mines (cont’d)Mines (cont’d)�� DiavikDiavik
�� 7.6 million carats 7.6 million carats �� AA--418 dike approval418 dike approval�� Underground feasibilityUnderground feasibility�� ISO 14001 (Environment)ISO 14001 (Environment)�� ISO 9001 (PSF)ISO 9001 (PSF)�� Gold level of PARGold level of PAR�� PDAC E3 National AwardPDAC E3 National Award�� John T. Ryan Safety John T. Ryan Safety
TrophyTrophy
Diavik
ProjectsProjects
�� JerichoJericho�� Snap LakeSnap Lake�� VictorVictor�� Fort Fort à à la la CorneCorne�� Star DiamondStar Diamond�� GahchoGahcho KuKuéé
JerichoJericho
�� TaheraTahera Diamond CorporationDiamond Corporation�� All approvals in placeAll approvals in place�� Construction 2005Construction 2005�� Production early 2006Production early 2006
Tahera
Snap LakeSnap Lake
�� De Beers Board of De Beers Board of Directors approval Directors approval
�� Construction 2005Construction 2005--0606�� Production 2007Production 2007�� Full Production 2008Full Production 2008 De Beers
VictorVictor
�� De BeersDe Beers�� Comprehensive Comprehensive
Study ReportStudy Report�� Construction Construction
20062006--0707�� Production 2008Production 2008 De Beers
Fort à la Fort à la CorneCorne
�� Advanced Exploration and Advanced Exploration and Evaluation PlanEvaluation Plan
�� $25 million$25 million�� Joint partnersJoint partners
�� De BeersDe Beers�� Kensington ResourcesKensington Resources�� CamecoCameco CorporationCorporation�� UEM IncUEM Inc
De Beers
Star DiamondStar Diamond
�� Shore GoldShore Gold�� Fort à la Fort à la CorneCorne
areaarea�� 27,837 27,837 tonnestonnes
bulk samplebulk sample�� PrePre--feasibility feasibility
studystudy
GahchoGahcho KuéKué
�� Joint partnersJoint partners�� De BeersDe Beers�� Mountain Province Mountain Province
Diamonds Inc Diamonds Inc �� Camphor Ventures Camphor Ventures
�� Technical study Technical study �� $25 million$25 million
�� 20122012De Beers
ManufacturingManufacturing�� ArslanianArslanian Cutting WorksCutting Works�� Canada Canada DeneDene DiamondsDiamonds�� Sirius Diamonds N.W.T.Sirius Diamonds N.W.T.�� Laurelton Diamonds Inc. Laurelton Diamonds Inc.
�� HRA InvestmentsHRA Investments�� Les Les Diamants Diamants du Stdu St--
LaurentLaurent�� DiaroughDiarough CanadaCanada
CDC
Jewellery ManufacturingJewellery Manufacturing
�� Solid demandSolid demand�� ManufacturersManufacturers
�� LibmanLibman�� CoronaCorona�� BirksBirks
HRA Investments
Retail Retail
�� In CanadaIn Canada�� Solid demandSolid demand�� AvailabilityAvailability
�� AbroadAbroad�� Attractiveness of Canadian Attractiveness of Canadian
diamondsdiamonds�� Increasing demandIncreasing demand
Code of ConductCode of Conduct
�� Larger membershipLarger membership�� National signatoriesNational signatories�� International signatoriesInternational signatories
�� Endorsed by the Endorsed by the Competition BureauCompetition Bureau
�� Endorsed by CIBJOEndorsed by CIBJO�� Diamond authentication Diamond authentication
standardstandard
SecuritySecurity�� RCMP Diamond Protection ServicesRCMP Diamond Protection Services
�� Customs and Excise BranchCustoms and Excise Branch�� RCMP Forensic laboratoryRCMP Forensic laboratory�� Ontario Provincial PoliceOntario Provincial Police�� CSIS ReportCSIS Report
�� No penetrationNo penetration�� Risk is presentRisk is present
�� Canadian Diamond Security GroupCanadian Diamond Security Group�� Risk analysisRisk analysis�� Exchange of best practicesExchange of best practices
�� Security companiesSecurity companies
LaboratoriesLaboratories
�� Exploration samplesExploration samples�� Saskatchewan Research LaboratorySaskatchewan Research Laboratory�� SGS Lakefield ResearchSGS Lakefield Research
�� CertificationCertification�� International Gemological InstituteInternational Gemological Institute�� European Gemmological LaboratoryEuropean Gemmological Laboratory�� GemscanGemscan International IncInternational Inc�� Harold Weinstein LtdHarold Weinstein Ltd EGL
ResearchResearch�� UniversitiesUniversities
�� University of AlbertaUniversity of Alberta�� University of British ColumbiaUniversity of British Columbia
�� LaboratoriesLaboratories�� Saskatchewan Research CouncilSaskatchewan Research Council�� EGLEGL
�� Diamond fingerprintingDiamond fingerprinting
U of A
PublicationsPublications
�� Canadian DiamondsCanadian Diamonds�� 5,0005,000�� Governments, Governments,
IndustryIndustry�� InternationalInternational
�� United StatesUnited States�� JapanJapan�� BelgiumBelgium�� EnglandEngland�� South AfricaSouth Africa
Canadian Diamonds
StudiesStudies
�� Indian and Northern Affairs CanadaIndian and Northern Affairs Canada�� Knowledge Based Study of Canada’s Knowledge Based Study of Canada’s
Diamond IndustryDiamond Industry�� Canadian Diamond Council CorporationCanadian Diamond Council Corporation
�� Human Resources Industry wideHuman Resources Industry wide ScopingScopingand Scanning Studyand Scanning Study
�� GNWTGNWT�� Diamond tourismDiamond tourism
TrendsTrends
�� Vertical integrationVertical integration�� AberAber Diamond Diamond
Corporation/WinstonCorporation/Winston�� Tiffany/Tiffany/TaheraTahera Diamond Diamond
CorporationCorporation�� BHPBHP Billiton CanadaMarkBilliton CanadaMark
�� BrandingBranding�� Polar bearPolar bear�� TundraTundra�� CanadiaCanadia
�� CertificationCertification
OrganizationsOrganizations
�� Canadian Diamond Council CorporationCanadian Diamond Council Corporation�� Canadian Diamond Manufacturers Canadian Diamond Manufacturers
AssociationAssociation�� Canadian Diamond Code CommitteeCanadian Diamond Code Committee�� Centre canadienCentre canadien de valorization du de valorization du
diamantdiamant
Government initiativesGovernment initiatives
�� Kimberley ProcessKimberley Process�� Action Plan Approval by Premiers July 2004Action Plan Approval by Premiers July 2004�� GNWT officialGNWT official--mark licensing guidelines mark licensing guidelines
promulgatedpromulgated�� Québec Québec Strategy on diamondsStrategy on diamonds�� Excise tax gradual eliminationExcise tax gradual elimination
�� Private member billPrivate member bill
Human resourcesHuman resources
�� EmploymentEmployment�� Primary and secondary industriesPrimary and secondary industries
�� TrainingTraining�� Primary and secondary industriesPrimary and secondary industries
�� Business opportunitiesBusiness opportunities�� Capital and operatingCapital and operating
Challenges facing the industryChallenges facing the industry
�� ExplorationExploration�� MiningMining�� ManufacturingManufacturing�� JewelleryJewellery manufacturingmanufacturing�� RetailRetail�� SecuritySecurity
ExplorationExploration
�� Limited northernLimited northern geosciencegeoscience�� Challenging regulatory Challenging regulatory
environmentenvironment�� Limited infrastructureLimited infrastructure�� Land accessLand access�� Tax environmentTax environment
�� Federal flowFederal flow--through through shares on permanent basisshares on permanent basis
Fugro
MinesMines
�� Regulatory environmentRegulatory environment�� Limited infrastructureLimited infrastructure�� ManpowerManpower
�� CapacityCapacity�� Aboriginal participation Aboriginal participation
objectivesobjectives�� Taxation regime Taxation regime
�� Canadian Exploration ExpensesCanadian Exploration Expenses�� Performance requirementsPerformance requirements
�� Marketing of roughMarketing of rough
Ekati
Diamond ManufacturingDiamond Manufacturing
�� Human resourcesHuman resources�� Immigration Immigration �� TrainingTraining�� RetentionRetention
�� AutomationAutomation�� National National
CertificationCertification HRA Investments
Jewellery productionJewellery production
�� “Definition” of a Canadian diamond“Definition” of a Canadian diamond�� The The Canadian DiamondCanadian Diamond officialofficial--markmark�� Certification of small diamonds mined in Certification of small diamonds mined in
CanadaCanada
RetailRetail
�� “Definition” of a Canadian diamond“Definition” of a Canadian diamond�� ConfusionConfusion�� UncertaintyUncertainty
�� The The Canadian DiamondCanadian Diamond officialofficial--markmark�� Certification of small diamonds mined in CanadaCertification of small diamonds mined in Canada
�� Workable solution neededWorkable solution needed�� Consumer ConfidenceConsumer Confidence
�� ManMan--made diamondsmade diamonds�� Treated diamondsTreated diamonds�� CertificationCertification
SecuritySecurity
�� Industry growing without increasing the Industry growing without increasing the resources of law enforcement agenciesresources of law enforcement agencies�� Industry has doubledIndustry has doubled�� Five mines by 2008Five mines by 2008�� Visibility increasesVisibility increases�� Vulnerability increasesVulnerability increases
Industry wide issuesIndustry wide issues
�� “Definition” of a Canadian diamond“Definition” of a Canadian diamond�� Clear consensus requiredClear consensus required�� Code of ConductCode of Conduct�� Mined in CanadaMined in Canada
�� Canadian DiamondCanadian Diamond officialofficial--mark mark �� Promulgated in 2004Promulgated in 2004�� Uncertainty and burdenUncertainty and burden�� Guidelines March 2005Guidelines March 2005
Federal government participationFederal government participation
�� Limited participationLimited participation�� Areas of responsibilitiesAreas of responsibilities�� Maximize synergyMaximize synergy
OpportunitiesOpportunities�� Superb geologySuperb geology�� Characteristics of diamonds mined in CanadaCharacteristics of diamonds mined in Canada
�� Exotic locationExotic location�� Environmental recordEnvironmental record�� SocioSocio--economic recordeconomic record
�� Growing local and world diamond demandGrowing local and world diamond demand�� Supplier of ChoiceSupplier of Choice�� India and ChinaIndia and China�� World economyWorld economy
�� Potential SynergyPotential Synergy�� WinWin--winwin--winwin
ConclusionConclusion
�� Much has progressedMuch has progressed�� Challenges remainChallenges remain�� Great opportunitiesGreat opportunities
RTD
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