http://www.merlindiamonds.com.au/resources/i/MED-quarterly-March-...

http://www.merlindiamonds.com.au/resources/i/MED-quarterly-March-2018-v2-final.pdf


"Over 1,000 diamonds .... from stockpiles on the ROM."
"A 7.313 fancy yellow... 1.448 ct blue/green... with 6 PINK diamonds..."

http://www.merlindiamonds.com.au/resources/i/Progress-update-02.18-2.pdf

"With potential to process ore directly from high grade Gawain and Ector pits."
"Dewatering Gawain... with priority to Gawain & Ector which will be de-watered by the end of March 2018.

I am elated at finally seeing a report from the company which is partially professional !
But there are some glaring ommissions (& questions) from quarterly that shareholders would like to know.

1. Has Gawain been dewatered yet?
2. Does production in quarterly relate only until 31 March or covers part of April also ?
3. When will new scrubber from China be commissioned (1 June ??)

The 1,000 diamonds are from stockpiles (tailings etc.) & from very minimal production capacity. No production from fresh ore yet ! At least not reported yet !
What size and quantity of coloured diamonds will come out of FRESH ORE once production commences AND when production is in quantity (50kt+ per month) ?


BEST OPPORTUNITY I HAVE SEEN IN  25 YEARS (Could be 100 bagger +)
My reasoning is as follows:

http://www.merlindiamonds.com.au/resources/i/Everblu-Research-Report-21-12-2016.pdf

Based on Everblu report Dec 2016 that includes the resource size of each pipe from historical data
GAWAIN  Grade 31ct per ht, Resource 490,000 ct.

On GAWAIN alone, at USD 350 pct (Everblu USD 424) using an e/r of 0.75 we have an in-ground resource of  A$ 228 million (A$466 pc).
To produce ONE ct of diamonds we will need to mine and process 3.3 tons of ore. What would the mining, process and overhead costs be per ton ? Lets say $50 (Everblu  says $25 ). That gives a cost of $165 per ct.

Once production from GAWAIN is up and running (might have commenced) this stock will have a major re-rating.


Lets  be on the conservative side:
Once new scrubber commissioned and new DMS plant in operation we should be able to do the following EASILY:

660,000 t annual plant capacity.
200k diamond production

NPBT $ 60 million per annum.
This figure excludes any coloured or large (100 ct+) gem quality diamonds.

What will the company do with $ 5 mill per month ? Dividends, new exploration (in a proven diamond province that has not had any new exploration in close to 20 years) .... ???
I am confident that once there is plenty of money around the company will have no problems in replacing & increasing their reserves and build even a bigger company.

On what p/e do you put such a company ? 10, 20, 30 ..... ?

Current market cap $ 15 million.
Where will the market cap be if my figures above are correct ?

I can only bring the horse to water, but I cannot make it drink !