Canadian Mining Journal


Five reasons diamond stocks have been dragging

In the first quarter of 2017, a market-cap weighted aggregation of diamond miners in U.S. dollars including Alrosa (RTS: ALRS), Petra Diamonds (LSE: PDL), Dominion Diamond (TSX: DDC; NYSE: DDC), Gem Diamonds (LSE: GEMD), Lucara Diamond (TSX: LUC), Stornoway Diamond(TSX: SWY), Firestone Diamonds (LSE: FDI), and Mountain Province Diamonds (TSX: MPV, NASDAQ: MPVD) was up 1.8%, versus the S&P 500, which was up 5.8%.

However, the above figure was skewed by a 29% return in Dominion, as the Canadian pure play diamond miner drew a takeover proposal at a 36% premium.  Taking Dominion out of the above calculation, the basket of diamond miners was down 0.7% in the quarter.

The period from Feb. 15 to March 13 was especially difficult for the diamond miners as the basket was down 14.3%, while the S&P 500 was up 1.1%, making an all-time high on March 1. During that period, $1.8 billion of market cap was erased from the largest pure play diamond miner in the world as Alrosa’s stock declined 14.1%; Dominion shares were down 10 consecutive days (prior to the acquisition proposal), and both  Stornoway and Mountain Province made 52-week lows.

Continue reading at The Northern Miner.