Large diamonds found in Sask.

For all those lawyers and i-bankers working towards the $100 million fee payday on BCE’s going private, here is a place to spend your bonus this December. Shore Gold (SGF:TSX) found two massive diamond stones in their third phase of sampling of the kimberlite pipe. Before this sample was analyzed, I understand that Canada is already the third largest producer of diamonds in the world. No more are we just hewers of wood and drawers of water.

Here is a snippit from GMP’s research note this afternoon:

“This morning, SGF reported the sixth set of results from Phase III of their Star kimberlite underground bulk sampling program. We would characterize these Cantuar diamond revcovery results as very good as they included consistent implied grades with prior sampling and the two largest rough diamond stones ever recovered in Saskatchewan, totalling 49.50 carats and 22.56 carats, respectively. The 49.50 carat stone represents a fragment of a larger stone, which supports SGF’s modeling that estimated that Star has the potential to produce stones larger than 100 carats….

Our assumptions and NAV remain unchanged as a result of these recent diamond recovery results. In our view, the sampling completed to date at Star further supports our 16 cpht grade assumption in our modelling. We are encouraged by the Cantuar results and the presence of large stones and will focus on the grade indications from the balance of the Pense and Cantuar samples going forward. The bulk of our valuation continues to be on the Star kimberlite. We are maintaining our BUY recommendation on SGF with a 12-month target of $8.60 per share based on a 1.4x multiple to our NAV of $6.16 per share.”

Congrats to the folks at Shore, and to the person that gets to wear a 49 carat diamond stone after bonus season this December.

MRM