Diamond News Archives

(IDEX Online) – Lucapa Diamond Company Limited has declared an $8 million distribution and loan repayment.<?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-com:office:office" /?>

 

Of the $8 million, half will be distributed to the partners in the Lulo mine in Angola, with Lucapa receiving $1.6 million in line with its 40% interest. The other $4 million will be a loan repayment to Lucapa.

 

The $8 million payment will come from the cash reserves of SML, the group which operates the Lulo alluvial mine, and of which Lucapa is a member.

 

Lucapa said Lulo produces the world’s highest US$ per carat alluvial production. The diamond mine has been producing commercial run of mine diamonds since 2015 and employs 390 workers and contractors, 87% of whom are Angolan nationals.

 

The latest declaration from SML follows an $8 million loan repayment and distribution declared to Lucapa and its partners in March 2017, and marks the third consecutive year that a distribution has been made by Lulo.

 

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Gold futures settled sharply higher Monday, extending a climb toward a six-month peak, underpinned by a weaker dollar and a rout in the stock market. February gold GCG9, +1.14%^[1] advanced $13.70, or 1.1%, to finish at $1,271.80 an ounce. The gold market closed at 12:30 p.m. Eastern Time, an hour earlier on Christmas Eve. The surge for the yellow metal, to a its highest since June, comes as the Dow Jones Industrial Average DJIA, -2.91%^[2] and the S&P 500 index SPX, -2.71%^[3] are down by about 2% and on pace for the worst month since 2008. That risk-off dynamic has given gold a lift, driving investors seeking the perceived safety of the the yellow metal. Meanwhile, weakness in the dollar, as measured by the ICE U.S. Dollar Index DXY, -0.31%^[4] down 0.4% at 96.53, also has helped to lift the precious metal. Weakness in the buck can support gold prices because gold is priced in dollars and a stronger currency can diminish appetite for the commodity for investors using other monetary units.

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December 24, 2018

Relying on fakery and addictive stimulus is the acme of fragility and vulnerability.

Let's start with a chart of the S&P 500:

Having become addicted to the Federal Reserve's nearly free money for financiers and the infamous Fed Put, stock market players are now weeping and thrashing about in the agony of withdrawal as Fed chair Jay Powell has instituted a cold-turkey withdrawal from the financial stimulus of the Bernanke-Yellen days.

Let's be clear: the policies of nearly free money for financiers (QE) and the Fed Put were unmitigated disasters, as they distorted financial markets so severely that the markets' pricing mechanisms have been crippled.

The policies of the Bernanke-Yellen Fed also directly exacerbated wealth-income inequality, as the wealth effect of rising equity valuations-- the supposed goal of monetary stimulus-- only benefited the top 5%, and most of the gains flowed to the top 0.1%.

Stripped of addictive stimulus and the backstop of the Bernanke-Yellen Fed Put, the markets are experiencing the pain of withdrawal and the traumatic return of price discovery. Although we're taught that capital has financial, intellectual and social forms, trust is also a form of capital, and thanks to the gross distortions and perverse incentives of the Bernanke-Yellen Fed, nobody trusts the market's price discovery mechanisms any more.

This is why market participants are so skittish and so easily panicked: they have no way of knowing what market valuations will be once the markets get through cold-turkey withdrawal from Fed smack and start discovering price via supply, demand, risk, cost of credit, discounting...

(IDEX Online) – The England and Wales Court of Appeal recently ruled in favor of veteran diamantaire Willie Nagel in a case featuring Antwerp sightholder Pluczenik.<?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-com:office:office" /?>

 

The Belgian firm will have to pay $3.3 million to its former broker, W Nagel Ltd., after the court agreed with a ruling of a lower court that Pluczenik violated an agreement between the sides from 20 years ago.

 

Nagel told the court that in 1994 he and Isaac Pluczenik made a deal whereby he reduced his commission rate to 0.5% from 1%, in return for Pluczenik using W Nagel as its broker as long as it had a sight.

 

However, Isaac Pluczenik died in 1997, with the business passing on to his son Chaim (pictured above) who did not attend the 1993 meeting when the deal was agreed. And when De Beers brought in its Supplier of Choice program in 2003, it said that its clients would no longer need brokers, although it encouraged them to do so.

 

Ahead of De Beers moving its aggregation, sorting and sales operations to Botswana from London at the end of 2013, Pluczenik informed Nagel that after 45 years he was ending Nagel's services as a broker for the diamond firm – thus triggering the lawsuit.

 

The court heard that there were few written accounts regarding the suit. Justice Andrew Popplewell pointed out in his 2017 ruling that the Pluczenik company didn’t provide much in the way of documentation during the proceedings. He said that Chaim Pluczenik was reluctant to write down details of agreements since his father had counseled him that ‘whatever...