RAPAPORT NEWS SERVICE | MARCH 5, 2010 www.rapaport.com | news@rapaport.com

Industry Retail Mining EconWatch India Jobs

RapUp March 5, 2010

India market hot. Prices firming as trade looks forward to Hong Kong show. JA-NY shows slight improvement but U.S. suppliers fearful about higher market prices. Rough market slows on concern that high prices cannot be sustained. ALROSA sells $667m in Jan. and Feb. Berkshire Hathaway 2009 jewelry revenues -12%. Finlay posts $6.5m Jan. loss. Sotheby’s 4Q revenues +31% to $218.3m, net income of $73.6m vs. net loss of $9.3m a year ago. Abbey Chikane confirmed as KP monitor for Marange, Zimbabwe.

RapNet Data: March 5, 2010

Diamonds 645,649

Value $4,121,170,409

Carats 737,229

Average Discount -28.72%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

March
5-9
Fri-Tue
Rapaport at Hong Kong Jewellery Show

Hong Kong Convention and Exhibition Centre
Booth 3GB42
Wanchai, Hong Kong

For information contact Ofira Gutman:
+852-9222-7001 or email ofira.gutman@diamonds.net

March
7
Sun
"The Diamond Decade: New Opportunities"
Martin Rapaport Presentation: Hong Kong

11:00 am - 12:30 pm
Grand Hyatt Hong Kong
Salon III-IV-Mezzanine Floor
1 Harbour Road, Hong Kong

Reserve your seat: hongkong@diamonds.net

March
15-18
Mon-Thu

Rapaport Tender Auctions
New York

Diamond Melee Tender
Over 45,000cts of polished round and fancy diamonds ranging in size from -2.5 sieve plate to 1ct +. Qualities vary from commercial to very fine. Excellent buying opportunity for diamond and jewelry manufacturers.

By Appointment Only

Contact: Jackie Tan
Email: tenders@diamonds.net
Phone: 1-212-354-9800

March
18-25
Thu-Thu
Rapaport at Baselworld 2010

Messe Basel
Hall 3.1 Stand F01

For information contact Francesco Lopresti:
+39-02-40047274 or email francesco.lopresti@diamonds.net

March
19
Fri
Rapaport Conference at Baselworld 2010

"State of the Diamond Industry"
Martin Rapaport Presentation
9:30 a.m.-11 a.m.

Rapaport Fair Trade Conference
1:30 p.m.-4 p.m.

Congress Center/Montreal Hall

Reserve your seat: basel@diamonds.net

QUOTE OF THE WEEK:
It appears the U.S. consumer is rebuilding their appetite for consumption -- or at least willing to pay full price again. While mall traffic is projected to be flat for the month, it does sound like increased conversion and lower markdowns were key to the gains.

Brian Tunick | Retail Analyst at J.P. Morgan

INDUSTRY

Petra Sells Cullinan Heritage Diamond for $35M

Petra Diamonds sold its 507.50-carat Cullinan Heritage rough diamond for $35.3 million, or about $69,600 per carat. The diamond was purchased at a tender in South Africa by Chow Tai Fook Jewellery Company Limited of Hong Kong. The price achieved for the rough stone reflected the incredible rarity of the diamond, which combines its remarkable size with exceptional color and clarity. The sale proceeds will be applied to the miners balance sheet, underground operations at Cullinan and expansion at its Williamson mine.

Johan Dippenaar, Petra’s chief executive officer (CEO), said, “It is fitting that the Cullinan Heritage should achieve a sale price of $35.3 million, the highest sale price on record ever achieved for a rough diamond, as it has the potential to produce one of the world’s most important polished gems. The sale proceeds further bolster Petra’s treasury and will be invested in the growth of our core assets.”

Rapaport Broadcast

WATCH NOW JAs New York Winter Show 2010 reflected stronger buying activity than the past few shows, as well as showcasing new diamond jewelry designs. In this broadcast, JAs New York Trade Show group director, Drew Lawsky (pictured), Cindy Edelstein, the president of Jewelers Resource Bureau, and Mendel Rotenberg, the president of Sara Blaine Jewelry and Fusion Jewelry, share details about the show.

RETAIL

U.S. Feb. Retail Sales Rise

Consumers were rather limited in their willingness to shop this past week, based upon the weekly sales index compiled by the International Council of Shopping Centers (ICSC) and Goldman Sachs. U.S. chain-store sales rose by 0.7 percent year over year, but fell 0.8 percent compared with the previous week. For the month of February, ICSC reported that comparable store sales rose 3.7 percent.

Leaner inventories enabled retailers to sell more goods for full price during February, while easy comparisons against 2009 sales, which were low due to the recession, created strong gains. ShopperTrak estimated that retail sales rose 1.3 percent year over year for the month. MasterCard Advisors’ SpendingPulse found that most retail sectors reported year-over-year growth during February, with online sales rising 16.7 percent and luxury sales, excluding jewelry, up 15.2 percent.

Berkshire Hathaways Jewelry Revenue -12%

Berkshire Hathaway’s jewelry retail division, comprised of Borsheims, Helzberg and Ben Bridge Jeweler, saw its revenue decline by 12 percent in 2009 and posted a pre-tax loss for the year. The companys total revenue rose 4 percent to $112.5 billion during 2009, while its net income increased by 61 percent to $8.06 billion for the year.

LJ Intl. Reports 56% Rise in Retail Sales

LJ International (LJI) reported that sales at its ENZO stores in China rose 56 percent to $16.7 million in the fourth quarter that ended on December 31, 2009. Based upon this strong performance, LJI revised its total revenue and earnings guidance for the period, which still fell short of its 2009 projections.

The company estimated that its total revenue declined by 6 percent to $39 million in the fourth quarter and by 16 percent to $110 million for the full year, “with lower sales in LJIs wholesale operations offsetting gains in its retail division,” according to the companys quarterly statement. LJI previously forecasted sales of $30 million and $100 million for the respective periods.

Finlay Posts $6.5M Net Loss for January

Finlay Enterprises reported a net loss of $6.45 million for January 2010 after failing to record any sales during the month. The jewelry retailers loss since filing Chapter 11 in August 2009 stood at $91.5 million, while its total sales have reached $236.13 million since then.

Finlay collected $5.77 million in receipts during the month of January, its weakest collection since the bankruptcy filing. The retailers total accounts payable came to $24.6 million in January, while its cash on hand stood at $74 million at the end of the month.

Dalumi Launches Fancy Yellow Eclipse Collection

Dalumi introduced the first ultra-premium line of its top-selling "Eclipse" fancy yellow diamond collection. The new line features exquisitely crafted, 18-karat, white gold rings and pendants boasting 1.5- to 3-carat fancy yellow diamonds crowned by smaller, brilliant white stones — an arrangement designed to intensify the impact of the yellow hues. Available in radiant, cushion, oval, heart and pear shapes, these items are intended for women interested in making their presence known.

Kiah Diamonds Opens Third Showroom

Kiah Diamond Jewellery launched its third exclusive showroom in Mumbai on Warden Road near Kemps Corner. The new showroom offers a stunning range of traditional and contemporary diamond jewelry. Kiahs designs are futuristic and practical, designed to appeal to the young, fashion-forward shopper, as well as professional women. The retailer has a network of eight showrooms in India.

GENERAL

KP Appoints Chikane to Monitor Marange Diamonds

The Kimberley Process (KP) appointed Abbey Chikane as its Zimbabwe monitor. Chikane (pictured) visited Zimbabwe this week on a fact-finding mission intended to verify the progress that has been attained on the countrys agreed upon compliance plan. Under the plan, Zimbabwe vowed to withhold exports of diamonds from Marange and to ensure “full and unhindered access” to all relevant diamond production and processing sites, as well as to all relevant stakeholders, including representatives of government, industry and civil society, from mining to exportation. Chikane’s appointment comes amidst increased controversy at the Marange mine, including fresh charges of corruption.

Sothebys to Auction De Beers Millennium Diamond

Sotheby’s expects to sell the De Beers Millennium Blue Diamond for between $4.6 million and $5.8 million when the stone goes under the hammer in Hong Kong on April 7, 2010. The pear-shaped, internally flawless, fancy vivid blue diamond will be the first piece from the De Beers Millennium Jewels collection to be auctioned and is currently owned by an important private collector.

The Millennium Jewels collection is comprised of 11 rare blue diamonds cut and polished by the Steinmetz Diamond Group. Of the 11, nine were graded by the Gemological Institute of America (GIA) as fancy vivid, the highest grade level for a color diamond.

MINING

ALROSAs 2010 Sales Hit $667M

ALROSA reportedly sold $667 million worth of rough diamonds in the first two months of 2010, noting a strong demand for these stones in the current market. The company reported that it sold approximately $300 million worth of rough in January, indicating that February sales reached $367 million.

ALROSA has signed long-term agreements with seven manufacturers in India and plans to forge long-term relationships with 30 more in the future. It expects to produce more than 33 million carats of diamonds this year.

Dianor Secures $30M Line of Credit

Dianor Resources secured a $30 million equity line of credit from Kodiak Capital Group and will use the funding to advance bulk sampling at its Leadbetter diamond project near Wawa in Ontario, Canada. The bulk sampling program is expected to recover diamonds, rubies, sapphires and gold. During the next three years, Dianor may draw down the equity funds at its sole discretion.

ECONWATCH

For the week ending Mar 4, 2010:

Mar. 4 Feb. 25 Chng.
$1 = Euro 0.737 0.739 -0.002
$1 = Rupee 45.85 46.50 -0.6
$1 = Israel Shekel 3.78 3.80 -0.02
$1 = Rand 7.48 7.88 -0.40
$1 = Canadian Dollar 1.03 1.06 -0.03

Precious Metals
Gold $1,131.60 $1,105.80 $25.80
Platinum $1,576.00 $1,530.00 $46.00

Stock Indexes Chng.
BSE 16,971.70 16,254.20 717.50 4.4%
Dow Jones Avg. 10,443.24 10,322.02 121.22 1.2%
FTSE 5,527.16 5,278.23 248.93 4.7%
Hang Seng 20,575.78 20,399.57 176.21 0.9%
S & P 500 1,122.81 1,102.98 19.83 1.8%
Yahoo! Jewelry Index 1,039.59 1,003.05 36.54 3.6%

USA
Birks & Mayors $0.67 $0.63 $0.04 6.5%
Blue Nile $54.55 $51.33 $3.22 6.3%
Charles & Colvard $1.35 $1.36 -$0.01 -0.7%
DGSE Companies, Inc. $2.01 $1.68 $0.33 19.6%
Fuqi International $18.79 $17.98 $0.81 4.5%
JCPenney $29.44 $28.00 $1.44 5.1%
Kohls $53.81 $54.15 -$0.34 -0.6%
LJ International $2.74 $2.59 $0.15 5.8%
Macys $19.91 $19.33 $0.58 3.0%
Man Sang $2.55 $2.95 -$0.40 -13.6%
Movado Group $13.42 $13.08 $0.34 2.6%
Nordstrom $38.39 $36.93 $1.46 4.0%
Saks $7.23 $7.24 -$0.01 -0.1%
Signet $29.25 $28.90 $0.35 1.2%
Sothebys $29.87 $23.52 $6.35 27.0%
Tiffany $45.49 $43.69 $1.80 4.1%
Walmart $53.96 $54.19 -$0.23 -0.4%
Zale $2.42 $2.45 -$0.03 -1.2%

EUROPE
Bulgari €5.98 €5.63 €0.35 6.2%
Bijou Brigitte €138.55 €138.50 €0.05 0.0%
Damiani €0.95 €0.92 €0.03 3.3%
LVMH €84.01 €76.76 €7.25 9.4%
PPR €88.20 €81.55 €6.65 8.2%
Richemont SA CHF 38.77 CHF 35.50 CHF 3.27 9.2%
Swatch Group CHF 316.00 CHF 293.80 CHF 22.20 7.6%
Theo Fennell (pence) 40.00 44.00 -4.00 -9.1%

INDIA (rupee)
Classic Diamond 21.30 20.30 1.00 4.9%
Gitanjali Gems 118.30 115.95 2.35 2.0%
Goldiam Intl 46.20 46.40 -0.20 -0.4%
Rajesh Exports 101.65 101.60 0.05 0.0%
Ren. Jewellery 75.10 71.15 3.95 5.6%
Su-Raj Diamonds 48.75 47.10 1.65 3.5%
Titan 1,865.65 1,722.70 142.95 8.3%
Zodiac JRD 24.15 23.95 0.20 0.8%
Suashish Diamonds 297.45 298.00 -0.55 -0.2%

NEW ZEALAND
Michael Hill NZD 0.69 NZD 0.71 -NZD 0.02 -2.8%

MINING STOCKS
CANADA
Harry Winston CAD 10.51 CAD 10.55 -CAD 0.04 -0.4%
Lucara Diamond CAD 1.02 CAD 1.03 -CAD 0.01 -1.0%
Mountain Province CAD 2.19 CAD 2.14 CAD 0.05 2.3%
Peregrine Diamonds CAD 1.55 CAD 1.52 CAD 0.03 2.0%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.90 CAD 0.90 CAD 0.00 0.0%
Stornoway Diamond CAD 0.47 CAD 0.46 CAD 0.01 2.2%
True North Gems CAD 0.09 CAD 0.09 CAD 0.00 0.0%
UK (pence)
African Diamonds 40.00 43.75 -3.8 -8.6%
Anglo American 2,590.50 2,306.50 284.0 12.3%
BHP Billiton 2,126.50 1,961.00 165.5 8.4%
Firestone Diamonds 38.25 38.75 -0.5 -1.3%
Gem Diamonds 247.80 232.50 15.3 6.6%
Gemfields 5.25 5.50 -0.3 -4.5%
Mwana Africa 11.08 11.98 -0.9 -7.5%
Namakwa Diamonds 33.77 33.00 0.8 2.3%
Petra Diamonds 66.00 58.75 7.3 12.3%
Rio Tinto plc 3,604.50 3,244.00 360.5 11.1%
Stellar Diamonds 18.00 18.00 0.0 0.0%

PRIEMYSEL: De Beers: Produkcia diamantov by sa mohla tento rok zvýšiť o 22 %
New York 13. II.2010 Juhoafrická spoločnosť De Beers, najväčší producent diamantov na svete, nevylučuje, že tento rok zvýši produkciu diamantov o viac než 22 %, keďže dopyt po týchto drahokamoch sa na trhu opäť začína zvyšovať.
"Zaznamenali sme výrazné posilnenie dopytu po neopracovaných diamantoch a očakávame, že ceny by sa čoskoro mohli priblížiť úrovni z konca roka 2008," povedal tento týždeň v rozhovore pre agentúru Bloomberg výkonný riaditeľ spoločnosti Gareth Penny.

  De Beers, ktorá produkuje zhruba 25 % z celkového objemu diamantov vo svete, výrazne znížila produkciu minulý rok, keď nástup svetovej krízy zredukoval záujem spotrebiteľov o drahokamy a iné finančne náročné produkty.
  

Produkcia neopracovaných diamantov firmy De Beers klesla v roku 2009 o 49 % na 24,6 milióna karátov (1 karát = 0,2 g) a tržby z predaja diamantov o 44 % na 3,84 miliardy USD (2,83 miliardy eur). Ďalší veľký producent diamantov, ruská Alrosa, sa dostal do finančných ťažkostí a ruská vláda v úsilí pomôcť jej prečkať krízu nakúpila diamanty za 1 miliardu USD.

  Zníženie produkcie a neskoršie zotavenie ekonomík však zasa viedlo k zvýšeniu cien. Alrosa v novembri 2009 informovala, že zaznamenala nedostatok surových diamantov, keďže dopyt po nich v posledných mesiacoch minulého roka začal rýchlo rásť.
  Pomohli aj vianočné sviatky. Podľa De Beers sa v USA, ktoré sú najväčším maloobchodným trhom s diamantmi, zvýšil ich predaj o 1 až 2 % oproti roku 2008. Penny očakáva, že produkcia De Beers by sa tento rok mohla zvýšiť na 30 miliónov a v roku 2011 na 40 miliónov karátov.

RAPAPORT NEWS SERVICE | MARCH 19, 2010 www.rapaport.com | news@rapaport.com

Industry Retail Mining EconWatch India Stats Jobs

RapUp March 19, 2010

Polished prices firm after Hong Kong show bringing positive mood to trading centers. Baselworld opens with mixed expectations as luxury manufacturers anticipate strong resistance to high large-stone prices. ALROSA 2009 output of 34m ct. ranks it as world’s largest diamond miner; signs $490m 3-year rough supply deal with three Indian companies. Gem Diamonds 2009 revenues -18% to $244m, net profit $25m vs. net loss of $552m. Bulgari posts 4Q net loss of $18m vs. net profit of $7m. Japan’s Jan. polished diamond imports -25% to $50m. Hong Kong Jan. precious jewelry exports +19% to $307m, imports +41% to $378m. Nicky Oppenheimer uses Anglo American shares as security for loan.

RapNet Data: March 19, 2010

Diamonds 619,788

Value $4,028,422,964

Carats 710,016

Average Discount -32.42%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

March
19
Fri
Rapaport Conference at Baselworld 2010

"The Diamond Decade: New Opportunities"
Martin Rapaport Presentation
9:30 a.m.-11 a.m.

Rapaport Fair Trade Conference
1:30 p.m.-4 p.m.

Basel Congress Center/Montreal Hall

Reserve your seat: basel@diamonds.net

March
18-25
Thu-Thu
Rapaport Exhibits at Baselworld 2010

Messe Basel
Hall 3.1 Stand F01

For information contact Francesco Lopresti:
+39-02-40047274 or email francesco.lopresti@diamonds.net

March
20-22
Sat-Mon
Rapaport at South India Jewellery Show (SIJS)

Sree Kanteerava Indoor Stadium
Booth 150
Bangalore, India

For information contact Nilan Singh:
+91-22-6628-2700 or email nilan.singh@diamonds.net

QUOTE OF THE WEEK:
ulgari 2009 financial results were heavily influenced by the global crisis in financial markets and its effects on the demand for goods and services: In this highly negative macro-economic context.

Francesco Trapani | Bulgari CEO

INDUSTRY

ALROSA Ranks as Top 2009 Producer

ALROSA produced 34 million carats of diamonds in 2009, surpassing De Beers output for the year. The Russian diamond miner reported earlier that production was $2.23 billion for 2009 in keeping with its practice of only reporting production value, but not volume. Longtime top producer De Beers saw its production decline by 49 percent to 24.6 million carats for the year. De Beers mothballed its mines in an effort to keep its supply in line with the diminished market demand, while ALROSA maintained its production levels and sold half of its stock to the state repository, Gokhran, to compensate for the lower industry demand.

Oppenheimer Uses Anglo Shares to Secure Loan

Nicky Oppenheimer, chairman of the De Beers Group, has placed 27.3 million Anglo American shares that will serve as security for a loan facility. The shares were valued at approximately $1 billion (GBP 739.8 million) when the agreement was transacted, based upon the share closing price in London on March 10. E. Oppenheimer & Son International Limited holds 70 percent of the shares and the remainder are owned by Gartland Limited.

In December 2009, shareholders agreed to proportionally invest $1 billion in De Beers to reduce the level of debt it required for refinancing. De Beers is in the process of renewing a $1.5 billion bank loan facility that expires at the end of this month.

Rapaport Weekly Broadcast

WATCH NOW: Brilliant Earth claimed that consumers are being misled by the "conflict-free" diamond jewelry label and devised a new initiative to educate jewelry shoppers. Beth Gerstein, the co-founder of Brilliant Earth, explains how jewelers and dealers can guarantee responsibly sourced diamonds to consumers. This weeks broadcast also tracks weekly chain-store sales and ShopNBCs performance where jewelry sales faltered.

RETAIL

Bulgari Posts $18M Loss for 4Q

Bulgari posted a net loss of $17.9 million in the fourth quarter of 2009, compared with a profit of $6.9 million one year ago. The company previously reported that its total sales fell 5.1 percent to $409 million during the fourth quarter, with jewelry being its strongest unit. However, jewelry sales were flat at $178 million for the month.

For the full year, the net loss was $64.8 million, compared with a net profit of $114.1 million. Revenue fell across all of Bulgaris sales units, with jewelry down 10.3 percent to $554 million.

Zale Faces Citibank Penalty

Zale Corporation must decide whether to pay Citibank a $6 million penalty for inadequate credit card sales or risk an early end to its deal with the bank, which provides financing for 40 percent of its U.S. purchases based upon certain requirements, including a minimum credit card sales level. Zale spokespersons noted that if the retailer were to lose the sales that are currently financed through its Citibank-backed, private label cards, "the adverse consequences would be material and would likely impact our ability to continue to operate."

Citibank already told Zale that it will not renew their agreement when it ends in March 2011 and threatened to push up this end date by six months. The retailers U.S. and Canada agreements with the bank "require us to maintain a minimum volume of credit sales...that we currently do not meet," Zale said in the filing.

Robbers Seize Gems and Cash in Diamond District

Two armed men robbed Royal Gems, located at 55 West 47th Street, in Manhattan just before noon on Saturday, March 13. No one was injured in the holdup, but minutes after it occurred, paramedics responded to a report of a noncritical injury at the store. The robbers used zip ties to bind the hands of three store employees and a customer before absconding with the jewelry, most of which contained diamonds, and cash. Police at the scene noted that determining the value of the stolen gems and cash would require some time.

Rio Tinto to Host Business Development Symposium

Rio Tinto will hold an inaugural jewelry business development symposium and design showcase in Chicago from July 16 to July 18, 2010. The event will bring together many of Rio Tinto’s Select Diamantaires, jewelry retailers and key jewelry buying groups. The symposium will focus on building better relationships throughout the diamond distribution channel, as well as providing a collaborative forum on the key issues facing diamond jewelry businesses today. Select Diamantaires will also showcase their latest designs for top U.S. retailers and obtain market feedback in the process.

FUQI Seeks Extension to File Financial Report

FUQI International sought to delay filing final fourth quarter and year end results following an internal audit that identified costs were greater than reported during the first three quarters of 2009. The company filed an extension for its Form 10-K for year 2009 with the Securities and Exchange Commission. FUQI also lowered its estimated fourth quarter revenue to $175 milion to $180 million, compared with its original forecast of $182 million to $191 million.

FUQI has been conducting an assessment of its internal controls, in accordance with Sarbanes-Oxley Act compliance procedures, and "believes that at least one of the identified deficiencies" related to its compliance audit, constituted a material weakness. FUQI identified accounting errors and stated these would impact the previously issued quarterly profits.

STATS

U.S. Jewelry Prices Flat in Feb.

The consumer price index (CPI) for jewelry in the U.S. was flat in February, based upon statistics provided by the Bureau of Labor Statistics (BLS). The February 2010 reading of 155.533 points was 0.074 points lower than one year ago, representing the first time the measure has actually fallen, albeit very slightly, since March of 2006. The January reading was 155.92 points.

This past months reading also marked the 25th consecutive cycle for which the jewelry CPI registered more than 150 points. The index is based upon the reference point of average prices in 1986, which is set at 100 points.

Japans Polished Diamond Imports -25% in Jan.

Japan’s polished diamond imports fell 25 percent to $50.3 million in January 2010 compared with one year ago. Imports from all of Japans major diamond sources declined during the month, including a 28 percent drop from India to $22.6 million. Polished imports from Belgium decreased by 35 percent to $10.9 million, while those from Israel fell 53 percent to $4.4 million. Increases were registered in imports from China, which were up 59 percent, from Hong Kong, which gained by 6.5 percent, and the U.S., which jumped 17 percent.

The country’s gold jewelry imports dropped by 18 percent in January to $39.4 million, while its platinum jewelry imports rose by 36 percent to $31.6 million. Imports of silver jewelry to Japan declined by 26 percent to $11.6 million during the month.

Hong Kongs Precious Jewelry Exports +19% in Jan.

Hong Kong’s precious metal jewelry exports rose by 19.1 percent in January 2010. The countrys precious metals jewelry imports increased by 40.6 percent to $378 million, while jewelry items in this category that remained in the domestic market grew 43 percent to $63 million. Re-exports of precious metal jewelry were up by 14 percent to $244 million for the month.

For the full year of 2009, precious metal jewelry exports dropped 24 percent, while precious metal jewelry imports were down by 14 percent to $3.97 billion.

MINING

Gem Diamonds Posts $25M Profit for 2009

Gem Diamonds reported a net profit of $25.4 million for 2009 compared with a net loss of $552.2 million in 2008. The companys revenues fell 18 percent to $244.4 million and were generated primarily from rough sales of its production from the Letseng mine in Lesotho and the Ellendale mines E9 pipe. Gem Diamonds placed its other operations on care and maintenance for most of 2009 in response to the financial downturn.

The company sold a total of 206.6 carats of polished diamonds for $12.5 million for the year. Of special note, the Letseng mine produced more than 700 gem-quality diamonds larger than 10.8 carats in 2009, with 68 stones selling for over $20,000 a carat.

Satya Capital Buys 5% of Namakwa Diamonds

Satya Capital has purchased a 5 percent stake in Namakwa Diamonds. Satya, a strategic investor in African businesses, subscribed for 5,981,905 new ordinary shares valued at 35 pence a share, or a total of $3.2 million. Namakwa is a vertically integrated diamond company with mining operations in South Africa, the Democratic Republic of the Congo (DRC), Namibia and Angola, as well as a rough dealership and diamond polishing business.

De Beers Places Jagersfontein on the Market

De Beers is inviting "expressions of interest" from other mining companies for the Jagersfontein Diamond Property in the Free State of South Africa. Jagersfontein is a mine of historical significance that predates the Kimberley discoveries. "In its day, it was the source of some of the world’s largest diamonds, notably the Excelsior of 995.20 carats discovered in 1893," the company stated.

Jagersfontein operated from 1870 to 1971, yielding a tailing mineral resource of more than 13 million tons, with an average grade of 12.8 carat per hundred tons (cpht). De Beers believes these tailings may pique the interest of a mining company or mining consortium with Black Empowerment credentials and a solid tailings processing history.

Stellar to Boost Production at Guinea Mine

Stellar Diamonds plans to acquire additional mining equipment to boost production at its Mandala and Bomboko diamond mines in Guinea, which will enable the junior miner to meet its near-term forecasts of producing 2,000 carats per month from Bomboko and 12,500 carats per month from Mandala. Output at Mandala has reached 64,800 carats since mid-2009 and 60,800 carats were sold, generating $1.7 million. Across three diamond sales of 1,816 carats from Bomboko, prices increased from $114 per carat to $126 per carat.

Rockwell to Purchase Etruscan’s Blue Gum Project

Rockwell Diamonds agreed to purchase a 74 percent stake in Etruscan Diamonds’ Blue Gum diamond operation in South Africa for $4.5 million. The remaining 26 percent of the project is owned by Black Economic Empowerment partners. The Blue Gum alluvial diamond deposits estimated mineral resources are 25 million cubic meters, with a grade of 2.37 carats per 100 cubic meters, and 15 million cubic meters in inferred resources, with a grade of 2.37 carats per 100 cubic meters. The project was placed on care and maintenance in late 2008 as a result of the severe drop in rough diamond prices that occurred at that time.

Firestone to Run Namdeb Toll Treatment Project

Firestone Diamonds will construct and operate a dredge and floating treatment plant project for Namdeb, supplying the plant and operating it on a toll treatment basis. A joint feasibility study of the project is currently underway and will be presented to Namdeb’s board later this year, at which time the contract negotiations will be finalized. The plant has a target production capacity of 11.5 million tons per year, with a minimum life span of 15 years. Production is scheduled to commence in 2012, Firestone noted.

The diamond company also intends to apply for a secondary share listing on the Botswana Stock Exchange (BSE) and appointed Capital Securities of Botswana as the sponsoring broker for the proposed listing. Firestone already trades on London’s Alternative Investment Market (AIM).

ECONWATCH

For the week ending Mar 18, 2010:

Mar. 18 Mar. 11 Chng.
$1 = Euro 0.734 0.730 0.004
$1 = Rupee 45.46 45.56 -0.1
$1 = Israel Shekel 3.73 3.74 -0.01
$1 = Rand 7.31 7.41 -0.10
$1 = Canadian Dollar 1.01 1.03 -0.02

Precious Metals
Gold $1,126.70 $1,109.40 $17.30
Platinum $1,627.00 $1,609.00 $18.00

Stock Indexes Chng.
BSE 17,519.26 17,167.96 351.30 2.0%
Dow Jones 10,788.94 10,611.84 177.10 1.7%
FTSE 5,642.62 5,617.26 25.36 0.5%
Hang Seng 21,330.67 21,228.20 102.47 0.5%
S&P 500 1,165.82 1,150.24 15.58 1.4%
Yahoo! Jewelry 1,093.18 1,047.72 45.46 4.3%

USA
Birks & Mayors $0.72 $0.82 -$0.10 -12.2%
Blue Nile $54.12 $55.61 -$1.49 -2.7%
Charles & Colvard $1.79 $1.78 $0.01 0.6%
DGSE Companies $2.00 $2.26 -$0.26 -11.5%
Fuqi Intl. $11.96 $20.45 -$8.49 -41.5%
JCPenney $31.14 $30.21 $0.93 3.1%
Kohls $54.44 $53.25 $1.19 2.2%
LJ Intl. $2.96 $2.90 $0.06 2.1%
Macys $21.36 $21.06 $0.30 1.4%
Man Sang $2.45 $2.69 -$0.24 -8.9%
Movado Group $11.41 $13.82 -$2.41 -17.4%
Nordstrom $40.23 $38.94 $1.29 3.3%
Saks $8.49 $7.98 $0.51 6.4%
Signet $29.35 $29.54 -$0.19 -0.6%
Sothebys $30.70 $30.21 $0.49 1.6%
Tiffany $47.58 $45.60 $1.98 4.3%
Walmart $55.91 $53.97 $1.94 3.6%
Zale $3.70 $3.03 $0.67 22.1%

EUROPE
Bulgari €5.72 €6.18 -€0.46 -7.4%
Bijou Brigitte €128.80 €135.80 -€7.00 -5.2%
Damiani €0.96 €0.93 €0.03 3.1%
LVMH €87.18 €85.76 €1.42 1.7%
PPR €96.15 €93.14 €3.01 3.2%
Richemont CHF 41.73 CHF 40.33 CHF 1.40 3.5%
Swatch Group CHF 333.80 CHF 327.50 CHF 6.30 1.9%
Theo Fennell (pence) 38.00 38.00 0.00 0.0%

INDIA (rupee)
Classic Diamond 20.65 21.05 -0.40 -1.9%
Gitanjali Gems 116.00 118.10 -2.10 -1.8%
Goldiam Intl. 43.75 43.75 0.00 0.0%
Rajesh Exports 104.60 104.90 -0.30 -0.3%
Ren. Jewellery 87.70 75.20 12.50 16.6%
Su-Raj Diamonds 48.20 47.95 0.25 0.5%
Titan 1,809.70 1,814.35 -4.65 -0.3%
Zodiac JRD 24.80 24.35 0.45 1.8%
Suashish Diamonds 290.05 295.05 -5.00 -1.7%

NEW ZEALAND
Michael Hill NZD 0.71 NZD 0.73 -NZD 0.02 -2.7%

MINING STOCKS
CANADA
Harry Winston CAD 10.08 CAD 10.30 -CAD 0.22 -2.1%
Lucara Diamond CAD 1.01 CAD 1.01 CAD 0.00 0.0%
Mountain Province CAD 2.13 CAD 2.05 CAD 0.08 3.9%
Peregrine Diamonds CAD 1.75 CAD 1.65 CAD 0.10 6.1%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.90 CAD 0.91 -CAD 0.01 -1.1%
Stornoway Diamond CAD 0.50 CAD 0.50 -CAD 0.01 -1.0%
True North Gems CAD 0.08 CAD 0.09 -CAD 0.01 -11.1%
UK (pence)
African Diamonds 41.88 41.65 0.2 0.6%
Anglo American 2,733.00 2,678.50 54.5 2.0%
BHP Billiton 2,206.50 2,200.00 6.5 0.3%
Firestone Diamonds 40.00 37.90 2.1 5.5%
Gem Diamonds 243.10 240.00 3.1 1.3%
Gemfields 5.18 5.00 0.2 3.6%
Mwana Africa 10.35 10.81 -0.5 -4.3%
Namakwa Diamonds 32.00 32.97 -1.0 -2.9%
Petra Diamonds 69.00 67.50 1.5 2.2%
Rio Tinto plc 3,729.50 3,754.00 -24.5 -0.7%
Stellar Diamonds 16.11 16.50 -0.4 -2.4%

RAPAPORT NEWS SERVICE | MARCH 26, 2010 www.rapaport.com | news@rapaport.com

Industry Retail Mining EconWatch India Stats Jobs

RapUp March 26, 2010

Large stone prices stable at Baselworld with sellers refusing offers below replacement costs and buyers rejecting speculative prices based on rough. Strong demand for fine quality 1-3 ct. and large, round capes. DTC March sight estimate at $420m with prices stable but premiums high. De Beers renews loan facilities reducing bank debt through 2013 by 26% to $2.89b. Russia and Israel negotiating $300m annual rough supply from ALROSA. Abdullah brothers fined $3m and banned from business in Dubai. Signet 4Q sales +7% to $1.2b, net profit of $180m vs. net loss of $367m previous year. Tiffany & Co. 4Q sales +17% to $981m, net profits +352% to $140m. India’s Feb. polished exports +59% to $1.4b, rough imports +362% to $984m. Israel’s Feb. polished diamond exports +39% to $437m, total rough and polished imports +195% to $593m. Rapaport Price List will not be published next week April 2 due to the Passover Holiday.

RapNet Data: March 26, 2010

Diamonds 609,167

Value $3,946,151,424

Carats 690,373

Average Discount -32.22%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

April
9-12
Fri-Mon
Rapaport at Jewelry Shanghai 2010

Shanghai New International Expo Center
Shanghai, China

Rapaport Representative - Julius Zheng:
tel: +86-21-6160-2380
email: julius.zheng@diamonds.net

April
24-26
Sat-Mon
Rapaport at The Smart Jewelry Show

Navy Pier
Chicago, Illinois

Rapaport Representative - John Colletta:
tel: +91-22-6628-2700
email: john.colletta@diamonds.net

QUOTE OF THE WEEK:
Customer reaction [to the 2,500sqft store concept] has been quite good, and weve gained meaningful insights from it. At the same time, we have continued to open full-line 5,000-square-foot Tiffany stores. We now believe that it is appropriate to combine the best attributes of both formats into a new but smaller-sized full-line store. As a result, the five U.S. stores we plan to open in 2010 will offer a relatively full range of products and will average about 3,700 square feet each.

Michael Kowalski | Tiffany & Co. CEO

INDUSTRY

DTC March Sight Estimated at $420M

The Diamond Trading Companys (DTC) March sight had an estimated value of $420 million as both prices and assortments remained consistent. Sightholders were satisfied with the DTC boxes, saying that De Beers is currently offering the best value on the market. One sightholder added that: "The more you see of outside goods, the cheaper DTC looks."

De Beers pledged during the February sight to keep prices stable in the short term, barring “any further major changes in market conditions.” Sightholders said they expect this stability to last at least until the JCK Las Vegas show in June.

Large Stone Prices Stable at Basel

The price of large stones remained stable during the Baselworld 2010 show as sellers refused offers below their replacement costs and buyers refrained from paying prices based upon the state of speculative rough. There was not enough energy at Basel to cause prices to move either way, but nothing justified "the rough speculation" either, according to one market professional.

Vendors noted strong demand for fine-quality, 1- to 3-carat stones and large cape rounds, as well as improved demand for D-G, VS1+ qualities. One exhibitor added that 3-carat and 10-carat diamonds were “crazy.” Severe shortages of high-quality larger stones limited sales. The shows attendance rose about 5 percent compared with 2009 to 100,000 visitors.

Israel-Russia Negotiate $300M Supply Deal

ALROSA pledged — in principle — to supply $300 million worth of rough diamonds a year to Israel’s manufacturing sector. There were a number of top industry officials involved in the deal, including Israels trade minister, Benjamin Ben Eliezer, Avi Paz, the president of the Israel Diamond Exchange (IDE), and David de Toledo, the vice president of the Israel Diamond Manufacturers Association (IDMA).

The direct supply from ALROSA would enhance the economic standing of Israels diamond polishing sector. Earlier this month, the Russian miner signed a deal to supply $490 million worth of rough to three firms in India.

Rapaport Weekly Broadcast

WATCH: Rockwell Diamonds chief executive John Bristow (pictured) shared his long-term forecast for the diamond producer in the wake of a challenging 2009. Rough prices at the companys recent diamond tender were good and there has been significant improvement in rough diamond prices compared with one year ago. Demand for larger, better-quality rough diamonds has improved, while the market for cheaper goods remains a little depressed. Bristows long-term view reflects the steady increases in rough prices that are expected to occur in the next two to four years. Rockwell Diamonds has an ambitions five-year plan to achieve production of 10,000 carats a month, which could yield annual revenue of about $100 million.

RETAIL

U.S. Chain-Store Sales +4%

U.S. chain-store sales rose 3.7 percent on a year-to-year basis during this past week, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Chain-store sales were flat when measured against the previous week. ICSC Research expects March 2010 sales to increase by 3 percent to 3.5 percent.

Signets Fiscal 4Q Sales +7%

Signets sales during the fourth quarter of fiscal 2010 rose 7 percent to $1.2 billion, while its cost of sales was up by just 3 percent to $769.5 million. The jewelry chains same-store sales rose 5.2 percent and it reported a net income of $117.2 million compared with a reported loss of $424 million one year ago. Signet incurred an impairment charge of $517 million in the fourth quarter of fiscal 2009, resulting in the loss. U.S. fourth-quarter sales rose 6.8 percent to $921 million in fiscal 2010, while revenue from the U.K. rose 8 percent to $283 million.

Fiscal-year 2010 revenue dropped 1.6 percent to $3.29 billion and Signet lowered its cost of sales by 2.2 percent to $2.2 billion. The companys same-store sales fell 0.4 percent. Its fiscal-year net profit was reported as $164 million compared with a loss of $394 million for fiscal year 2009, which was caused by the impairment charge. U.S. sales rose 0.9 percent to $2.56 billion and U.K. sales fell by 0.1 percent at constant exchange rates, although in dollars, the figure was 9.3 percent lower at $733 million.

Tiffanys 4Q Sales +17%

Tiffany & Co. reported that fourth-quarter sales rose 17 percent to $981.4 million while cost of sales increased by 19 percent to $406 million. At constant exchange rates, the retailers net sales improved by just 13 percent. Tiffanys worldwide comparable-store sales rose 11 percent during the fourth quarter, which included the Christmas season, and its profits increased to $140.4 million compared with $31 million one year ago.

Tiffanys fiscal-year sales fell 5 percent to $2.7 billion through January 31, 2010. On a constant exchange basis, its comparable-store sales dropped 8 percent. Net earnings for the fiscal year rose by 20 percent to $264.8 million.

LJ Intl.s 4Q Revenue -6%

Fourth-quarter revenue for LJ International dropped 6.4 percent to $39.2 million, while its cost of goods fell by 12 percent to $27 million. The companys net income rose 65 percent to $2.2 million for the period.

LJ International reported that its fiscal-year revenue fell 19 percent to $110.5 million as its profits increased 46 percent to $3.7 million. The companys ENZO retail chain in China experienced a 39 percent sales increase during the fiscal year, exceeding $50.8 million, and its comparable-store sales were up 25 percent. Revenues from its wholesale division fell 40 percent to $59.7 million for the fiscal year.

Zale Considers Sun Capital Deal

Zale is considering an investment offer by private equity firm Sun Capital Partners totaling between $50 million and $100 million, a company insider told the Wall Street Journal. Zale rejected an earlier offer from Apollo Management to buy a stake in the jeweler. In a filing submitted to the Securities and Exchange Commission (SEC), Zale confirmed that Citibank, which issues Zales private-label credit cards, would not renew its agreement because Zale had failed to meet the required volume of credit sales and must therefore pay Citibank approximately $6 million by April 1 to compensate for this low volume, which the jeweler said would severely impact its operations.

Abdullah Bros. Face Penalties

The Abdullah brothers of the Damas firm were banned from the board of any Dubai International Financial Centre (DIFC) listed company for 10 years and fined $3 million after they were found to have withdrawn Damas funds for their own personal use — without disclosing these withdrawals to the board.

DIFC criticized the brothers for what it termed a "failure to exercise appropriate corporate governance over the company" and said they owed "approximately $99.4 million (AED 365 million), plus the value of approximately 1,940,250 grams of gold" to Damas. The firm was also fined a total of $700,000. The brothers reportedly agreed to repay Damas.

Sothebys to Hold Jewelry Auction April 20

Sotheby’s will hold its sale of Magnificent Jewels in April, as well as a single-owner auction, "Always in Style: 150 Years of Artistic Jewels," in New York on April 20. A majority of the white diamonds that will be featured there are the highly sought, wearable sizes weighing 10 carats and less. One such example is a platinum and diamond ring set with a 9.25-carat, D, internally flawless, type IIa stone graded as triple-EX and assigned a presale estimate of $1 million to $1.5 million.

One superb example of colored diamonds on offer (pictured) is a magnificent, fancy vivid yellow diamond necklace, which features 42 GIA-certified, fancy vivid yellow diamonds weighing a total of 100.17 carats and is set in a graduated riviere style. This necklace boasts a presale estimate of $2 million to $3 million and Sothebys has contended that it will be the first of its kind — set entirely with fancy vivid yellow diamonds — to appear at auction.

Christies to Hold Jewelry Auction April 22

Christies New York will present two exceptional jewels — the Emperor Maximilian Diamond and the Catherine the Great Emerald and Diamond Brooch — as highlights at its first major jewelry sale of the year to be held on April 22, 2010. The 39.55-carat Emperor Maximilian Diamond and the Catherine the Great Emerald and Diamond Brooch (pictured), which is set with a Colombian emerald larger than 60 carats, both carry presale estimates of $1 million to $1.5 million.

STATS

Israel Exports

For the month of February 2010:
Feb. Chng. YTD Chng.
$Mil. $Mil.
Polished Exports $437 39% $1,003 61%
Polished Imports NA NA
Net Exports NA NA

Rough Imports NA NA
Rough Exports $244 201% $547 209%
Net Imports NA NA

India Imports & Exports

For the month of February 2010:
Feb. Chng. YTD Chng.
$Mil. $Mil.
Polished Exports $1,370 59% $3,080 77%
Polished Imports $788 17% $1,830 39%
Net Exports $582 300% $1,250 195%

Rough Imports $984 362% $1,860 331%
Rough Exports $81 79% $140 36%
Net Imports $903 438% $1,700 418%

Net Diam. Acct. ($320) ($462)

MINING

De Beers Renews Loan, Reduces Debt

De Beers renewed its bank loan facilities, which entitled it to both the renewal and an extension of its existing facilities. Thanks to an additional $1 billion in shareholder investments, the company lowered its bank debt from $3.89 billion to $2.89 billion through 2013. De Beers noted that all of its banking partners participated in this renewal and stressed that it now has the necessary capital structure in place to pursue opportunities within the diamond industry.

Gemfields Tender Nets $7M

Gemfields first rough emerald and beryl auction of the year was held in Jaipur, India, and generated sales of $7.2 million from 28.9 million carats of principally lower-quality rough emeralds and beryl across 56 separate lots, with 49 lots sold. The company noted that emerald values decline dramatically as quality decreases. The emerald lots at the Jaipur auction ranged from approximately 3 cents per carat to $38 per carat. Gemfields expects to hold a high-quality emerald auction in London in June or July of 2010.

Tanzania Shuts London Sorting Office

Tanzania closed its London diamond sorting office now that Petra Diamonds, which purchased the Williamson Diamond mine from De Beers, sells rough from the mine directly to the overseas market. Between 1994 and 2000, De Beers paid $4.05 million to Tanzanias U.K. sorting office for 901,300 carats of diamonds, but according to government officials the funds were not remitted to the Treasury. The government provided no further details of its investigation into the sorting office.

Tiomin Completes Acquisition of Vaaldiam

Tiomin Resources acquired all outstanding common shares in Vaaldiam Resources as planned. Tiomins common shares have also been consolidated on a 10-for-one basis and the company has changed its name to Vaaldiam Mining. Vaaldiam Resources common shares were delisted from the Toronto Stock Exchange (TSX) on March 25. Tiomins common shares will now trade in Toronto under the name "Vaaldiam Mining" and the symbol "VAA," effective March 26.

Vaaldiam Mining will also resume diamond and gold production at the Duas Barras project in Brazil, which had been placed on care and maintenance. The projects diamond production targets are for 20,000 carats in 2010 and 40,000 carats in 2011.

ECONWATCH

For the week ending Mar 25, 2010:

Mar. 25 Mar. 18 Chng.
$1 = Euro 0.750 0.734 0.016
$1 = Rupee 45.49 45.46 0.0
$1 = Israel Shekel 3.75 3.73 0.02
$1 = Rand 7.40 7.31 0.09
$1 = Canadian Dollar 1.02 1.01 0.01

Precious Metals
Gold $1,091.30 $1,126.70 -$35.40
Platinum $1,602.00 $1,627.00 -$25.00

Stock Indexes Chng.
BSE 17,558.85 17,519.26 39.59 0.2%
Dow Jones 10,841.44 10,788.94 52.50 0.5%
FTSE 5,727.65 5,642.62 85.03 1.5%
Hang Seng 20,778.55 21,330.67 -552.12 -2.6%
S&P 500 1,165.73 1,165.82 -0.09 0.0%
Yahoo! Jewelry 1,079.83 1,093.18 -13.35 -1.2%

USA
Birks & Mayors $0.82 $0.72 $0.10 13.9%
Blue Nile $54.93 $54.12 $0.81 1.5%
Charles & Colvard $1.89 $1.79 $0.10 5.6%
DGSE Companies $2.10 $2.00 $0.10 5.0%
Fuqi Intl. $11.43 $11.96 -$0.53 -4.4%
JCPenney $32.85 $31.14 $1.71 5.5%
Kohls $56.30 $54.44 $1.86 3.4%
LJ Intl. $2.76 $2.96 -$0.20 -6.8%
Macys $21.53 $21.36 $0.17 0.8%
Man Sang $2.33 $2.45 -$0.12 -4.9%
Movado Group $11.75 $11.41 $0.34 3.0%
Nordstrom $41.24 $40.23 $1.01 2.5%
Saks $8.88 $8.49 $0.39 4.6%
Signet $28.47 $29.35 -$0.88 -3.0%
Sothebys $31.54 $30.70 $0.84 2.7%
Tiffany $47.11 $47.58 -$0.47 -1.0%
Walmart $55.74 $55.91 -$0.17 -0.3%
Zale $3.43 $3.70 -$0.27 -7.3%

EUROPE
Bulgari €5.97 €5.72 €0.25 4.4%
Bijou Brigitte €137.20 €128.80 €8.40 6.5%
Damiani €0.94 €0.96 -€0.02 -2.0%
LVMH €87.51 €87.18 €0.33 0.4%
PPR €96.90 €96.15 €0.75 0.8%
Richemont CHF 41.45 CHF 41.73 -CHF 0.28 -0.7%
Swatch Group CHF 344.10 CHF 333.80 CHF 10.30 3.1%
Theo Fennell (pence) 37.00 38.00 -1.00 -2.6%

INDIA (rupee)
Classic Diamond 20.45 20.65 -0.20 -1.0%
Gitanjali Gems 114.65 116.00 -1.35 -1.2%
Goldiam Intl. 46.85 43.75 3.10 7.1%
Rajesh Exports 107.85 104.60 3.25 3.1%
Ren. Jewellery 79.85 87.70 -7.85 -9.0%
Su-Raj Diamonds 47.70 48.20 -0.50 -1.0%
Titan 1,779.75 1,809.70 -29.95 -1.7%
Zodiac JRD 24.30 24.80 -0.50 -2.0%
Suashish Diamonds 289.20 290.05 -0.85 -0.3%

NEW ZEALAND
Michael Hill NZD 0.71 NZD 0.71 NZD 0.00 0.0%

MINING STOCKS
CANADA
Harry Winston CAD 9.98 CAD 10.08 -CAD 0.10 -1.0%
Lucara Diamond CAD 1.00 CAD 1.01 -CAD 0.01 -1.0%
Mountain Province CAD 2.08 CAD 2.13 -CAD 0.05 -2.3%
Peregrine Diamonds CAD 1.89 CAD 1.75 CAD 0.14 8.0%
Rockwell Diamonds CAD 0.08 CAD 0.07 CAD 0.00 7.1%
Shore Gold CAD 0.93 CAD 0.90 CAD 0.03 3.3%
Stornoway Diamond CAD 0.64 CAD 0.50 CAD 0.15 29.3%
True North Gems CAD 0.08 CAD 0.08 CAD 0.00 0.0%
UK (pence)
African Diamonds 43.00 41.88 1.1 2.7%
Anglo American 2,777.00 2,733.00 44.0 1.6%
BHP Billiton 2,248.50 2,206.50 42.0 1.9%
Firestone Diamonds 37.70 40.00 -2.3 -5.7%
Gem Diamonds 249.50 243.10 6.4 2.6%
Gemfields 5.08 5.18 -0.1 -1.9%
Mwana Africa 10.25 10.35 -0.1 -1.0%
Namakwa Diamonds 31.84 32.00 -0.2 -0.5%
Petra Diamonds 70.00 69.00 1.0 1.4%
Rio Tinto plc 3,882.00 3,729.50 152.5 4.1%
Stellar Diamonds 15.50 16.11 -0.6 -3.8%

RAPAPORT NEWS SERVICE | APRIL 30, 2010

Retail Mining General EconWatch India Jobs

RapUp April 30, 2010

DTC April sight estimated at $470m as De Beers raises prices while production restrictions squeeze rough supply to cutters. Polished prices stable and not increasing with rough due to insufficient consumer demand. Polished trading steady with good liquidity for 0.30-0.70 ct, H+, VS+, certs. De Beers long-term production expected at 40m ct/year, well below previous peaks. Debswana considers diversifying from diamonds. ALROSA forecasts 34m ct/yr through 2012. Improved traffic but light diamond trading at Chicago Show. Amazon.com 1Q sales +46% to $7.13b, net income +68% to $299m.

RapNet Data: April 30, 2010

Diamonds 623,878

Value $4,068,131,261

Carats 714,159

Average Discount -31.30%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

June
6
Sun
Rapaport Conference at JCK Vegas 2010
New Day - Sunday, June 6
Marcello Ballroom
Venetian Hotel, Level 4

Rapaport Breakfast:
"The Diamond Decade: New Opportunities"
Martin Rapaport Presentation
8:00 a.m. - 10:00 a.m.

Diamond Certification Conference
12:00 p.m.- 2:00 p.m.

Fair Trade Jewelry Conference
2:00 p.m. - 4:00 p.m.

The Rapaport Conference is free and open to all.
To register e-mail: conference@diamonds.net
or call +1-702-893-9400

QUOTE OF THE WEEK:
I thank Hugh Hefner and Aileen Getty for their critical contributions [to Save the Hollywood Sign], along with everyone whose generous spirit moved them to join the campaign to save one of Americas most famous urban spaces. The threat to its existence underscores the need for partnerships like ours with Trust for Public Land, who can work together to protect our cultural assets for future generations.

Michael J. Kowalski | Chairman of Tiffany & Co.

INDUSTRY

DTCs April Sight Estimated at $470M

De Beers sold an estimated $470 million worth of rough diamonds to sightholders at this week’s Diamond Trading Company (DTC) April sight. According to participants, DTC raised its prices by an estimated 5 percent to 7 percent, with the highest increases apparent in rough stones over 5 carats and pique goods. Increases were also noted for 3- to 4-carat rough stones and VS-SI clarities, while smaller goods and VVS stones reflected slight increases. The adjustments were based upon strong demand and DTCs belief that its prices should reflect the market, according to company spokesperson Louis Prior.

Most observers agreed that the rough market was very “confusing,” as demand remained strong even as prices rose. “It’s not a good place for manufacturers to be,” said one observer. “There are shortages of rough and at the same time, they cannot profit on the polished. So they need to decide whether to polish or not.” Sightholders were in a strong position, as they were able to sell their rough to the secondary market, he added.

Another observer contended that the level of rough De Beers brought to the table was satisfactory because if DTC resumed its 2008-level sights of $700 million or more, it would kill the market.

De Beers to Hold Production Down from Peak

De Beers is planning to keep its long-term diamond production below the peak levels it achieved in 2008, based upon the current natural supply and demand imbalance. De Beers managing director Gareth Penny said that supply cannot keep up and that this trend will become more apparent during the next 15 years. Demand from across the Asian continent is predicted to accelerate the depletion of existing mines.

De Beers production will plateau at around 40 million carats in 2011. The companys output reached 48 million carats in 2008, but fell by 49 percent to 24.6 million in 2009 as a result of the slump in demand. This year, the companys production is expected to rise to about 30 million carats.

Rapaport Weekly Broadcast

The Jewelry Consumer Opinion Councils (JCOC) results from its "When Will You Purchase Again?" study did not uncover any real change in terms of consumers reduced spending on nonessential products. However, JCOC asked consumers to select products they will buy when they start spending again and results give products that will compete with jewelry. The survey also found that personal debt worried consumers more in 2010, whereas "the economy" in general was of great concern in 2009. The Gallup Organization confirmed some of JCOCs conclusions, as well. Although U.S. chain-store sales rose 5.5 percent this past week spending patterns just have not changed much in the past 12 months, as consumers continue to worry about their finances, the economy and the current lack of jobs. WATCH NOW

RETAIL

Amazons 1Q Sales +46%

First-quarter sales at Amazon.com rose 46 percent to $7.13 billion, while the online retailers cost of sales was up by 47 percent to $5.5 billion. The company benefited from a $185 million foreign exchange rate gain as its net income jumped 68 percent to $299 million. Amazons sales across North America rose 47 percent to $3.78 billion year over year, while sales for its international segment rose 45 percent to $3.35 billion during the first quarter. Founder Jeff Bezos said the online mega-retailer remained "heads-down focused on customers" and that its sales of web services have continued to accelerate.

Christies Dubai Sale Nets $8.6M

Christies reported that its jewels auction in Dubai realized a total of $8,589,250 and was 72 percent sold by lot. The top lot was a 17.71-carat, D, VVS2 rectangular diamond ring by J.Roca, which sold for $1,345,500 or $75,974 per carat, followed by a 26.61-carat, rectangular, fancy intense yellow diamond ring that sold for $722,500.

Charles & Colvard 1Q Sales +15%

Charles & Colvards sales rose by 15 percent to $2.9 million in the first quarter, while the company also managed to reduce its total costs and expenses by 28 percent to $2.7 million. Charles & Colvard reported net income of $298,385, compared with the loss of $1.3 million it posted one year ago. The company had $2.79 million in cash on hand and $5.05 million in liquid, long-term investments at the end of the quarter.

Total inventory, including long-term and consignment inventory, stood at $38.49 million, down from $39.13 million at the end of fiscal 2009. Charles & Colvard purchased $289,000 of raw material during the quarter.

Wealthy U.S. Shoppers Pick Blancpain

The Luxury Institute found that high-net-worth U.S. consumers, or those with weighted average household incomes of $845,000 and average investable assets of $16.6 million, rated Blancpain the “Best of the Best” among 33 luxury watch brands. Vacheron Constantin took second place and Breguet was ranked third in the survey.

The Luxury Institute also predicted that more watch brands will build their own direct channels to access end consumers in the future instead of relying upon retailers which are "stuck in time." Earlier this month, high-net-worth shoppers chose Graff as the "Best of the Best" jeweler.

Birks Debuts First Diamonds from Victor

Birks in Toronto debuted 100 gems from the Victor mine that were cut and polished by Crossworks Manufacturing in Ontario and ranged in price from about $1,300 to well above the cost of a one-bedroom condo. The diamonds carried a Certificate of Authenticity issued by Ontario. These diamonds will now make their way to Birks other stores across Canada.

Birks president, Thomas Adrushkevich, said the company is not charging premium prices for the highly sought-after Ontario, or other locally mined, diamonds. The stones from the Victor mine ensure "a continuous supply," according to the company.

Tiffany Launches Yellow Diamond Collection in Japan

Tiffany & Co. launched a new series of accessories featuring yellow diamonds in Japan and consisting of about 30 items total, including rings and pendants. The company strived to keep the line affordable by using smaller diamonds. The collections price points begin at about $2,100. Tiffanys sales in Japan are comprised mostly of engagement rings and other wedding-related accessories, so the retailer hopes to tap new demand with this collection.

In other company news, the Tiffany & Co. Foundation recently helped to save Cahuenga Peak in Los Angeles, which happens to be the location of the famous Hollywood sign, by offering a $1 million donation to the cause in February and a matching grant of $500,000 this month. The Trust for Public Land needed $12.5 million before April 30 to buy the property from developers and in a true save-the-day twist, Playboy magazine founder Hugh Hefner donated $900,000 to the campaign, which set Tiffanys grant into motion, as well as one from Aileen Getty. As a result, the necessary funds were raised to save the property from bulldozers forever more.

Tiffany & Co.s headquarters staff in Manhattan will be consolidated into a single space during the second quarter of 2011 to improve efficiencies and take advantage of a "green" office space available at 200 Fifth Avenue. Tiffany will sublease existing properties through 2015, but anticipates recording expenses of approximately $30 million in the fiscal year that ends in January 2012 due to the related lease obligations, which cannot be cancelled. Tiffany will incur expenses of approximately $20 million in the fiscal year that ends in January 2011 and $5 million for the fiscal year that ends January 2012, based upon the acceleration of property and equipment depreciation and the incremental rents to be incurred during this transition period.

GENERAL

Crossworks to Hold Polished Tender in Toronto

Crossworks Manufacturing will hold its first polished diamond tender May 3-5 for stones originating from the De Beers Canada Victor mine (pictured). Participation is by invitation only and the event will be held at the Diamond Bourse of Canada, which is located in Toronto. The diamonds were polished at Crossworks’ polishing facility in Sudbury and will be accompanied by a Certificate of Origin from the government of Ontario. Crossworks purchases rough through supply agreements with the Diamond Trading Company (DTC) and Rio Tinto. The company began polishing diamonds from the Victor mine in 2009.

Jewelers That Care to Award Industry Players

The first Jewelers That Care Awards will be held at the JCK Vegas Show on June 5 at the Venetian Hotel. Jewelers That Care’s mission is to work with the world’s most precious resource: People. Diane Warga-Arias (pictured) will serve as the master of ceremony for the event, where the winners will discuss their projects and offer advice and encouragement to the industry at large. The awards will recognize Hoover & Strong, Columbia Gem House, Lori Bonn Design Inc., Devon Fine Jewelry and Reflective Images Inc.

USKPA Launches Website to Conduct Operations

The United States Kimberley Process Authority (USKPA) launched its new website: www.uskpa.org. The website includes information on how to become a USKPA licensee authorized to use U.S. Kimberley Process Certificates to export rough diamonds from the country. The website will enable current licensees to manage their Kimberley Process Certificates in an efficient manner, to ensure compliance with appropriate U.S. legislation and regulations. The website will allow quicker processing of information, more efficient record keeping and reduction in paperwork. The website will facilitate U.S. Kimberley Process licensing, U.S. Kimberley Process Certificate issuance and record keeping for U.S. government compliance.

Jewelers Mutual Warns of Threat to Alarm Systems

Jewelers Mutual Insurance warned that burglar alarm systems used by jewelry businesses across the U.S. may be affected by a recently announced decrease in Honeywell’s AlarmNet-M radio network. Jewelers Mutual learned that Velocita Wireless, which provides the wireless backbone of Honeywell’s AlarmNet-M radio network, is de-commissioning a portion of its network that transmits one-way and two-way burglar alarm signals. Velocita cautioned that this immediate and significant decrease in their network coverage will affect about a quarter of its service area. Most alarm service providers use this network, even though it is not listed on your alarm service contract agreement.

Jewelers Mutual is working with Underwriters Laboratories (ULI) and alarm industry resources to obtain more information and identify viable alternative options. All jewelry businesses should contact their alarm service company as soon as possible to learn if their individual burglar alarm system is impacted and how their alarm service company plans to address this situation.

NY Dealers Club to Host Seminar on Crime

The New York Diamond Dealers Club has invited members and their associates to a seminar on crime awareness and prevention, May 5 at 3:30 p.m. In light of several major robberies and killings in the industry, Club executives urged members to attend the program to learn important safety measures to guard yourself, your family and the business. Speakers include FBI special agent Daniel McCaffrey and New York City detective Scott Guginsky as well as John Kennedy and Robert Frank of the Jewelers Security Alliance.

MINING

ALROSA Plans 102M Cts by 2012

ALROSA is expecting to recover 102.3 million carats of diamonds before 2012 and forecasted that its rough diamond sales will total $9.56 billion during this period. For further perspective, an average production rate of around 34 million carats per year would be in line with ALROSAs 2009 output. The company recorded sales of $2.2 billion for 2009, indicating that it expects sales to increase by 31 percent to reach its projected average for the next three years.

ALROSAs objective is to boost sales through long-term supply agreements and diversifying into new sales regions. If it is fulfilled, the companys forecast will result in an accumulated net profit of $756 million and expects to decrease its debt by $524 million to $3.1 billion by the close of 2012.

Zimbabwe Update

African Consolidated Resources (ACR) claimed that Zimbabwe’s High Court only dismissed its urgent appeal to prevent the sale of rough from the countrys Marange fields, which was counter to the media reporting the court cleared these goods for sale. While the urgent appeal was dismissed, the application for Marange ownership remained on the table. Therefore, ACR contended that any sale of Marange diamonds would constitute the sale of “stolen goods” and that it would consider criminal action to prevent the trade of these stones.

In the wake of the High Courts reported decision, Global Witness warned Zimbabwe that it must not resume exports from Marange without prior permission from the Kimberley Process Certification Scheme (KPCS).

Meanwhile, Zimbabwes Ministry of Mines and Mining Development once again barred a parliamentary investigative team from touring the Marange fields. The group was scheduled to visit the region to gather evidence following allegations that illegal activity was being conducted there by some governement associates.

Adding its view on the Marange issue, the Zimbabwe Congress of Trade Unions (ZCTU) said that the countrys diamond mines must be nationalized because no single entity should exploit rough without offering benefit to the people and therefore, mining companies must accept the 50 or 51 percent local ownership rule that is currently under consideration.

Chávez Proposes Mine Nationalization

Venezuelas President Hugo Chávez proposed nationalizing the environmentally unsafe diamond and gold mining concessions in Bolívar state because gold and diamonds are being exported without taxation. He said that nationalization will help the country recoup its losses from the lack of taxation and end the concessions that are currently damaging its forests and mines.

Debswana Considers Ways to Boost Revenue

Debswana is considering diversifying from diamonds into minerals and/or energy as a means of boosting its revenues, but declined to confirm which areas it would pursue. Debswana owns a colliery that supplies Botswana Power Corporation with coal. The companys sales fell 39 percent to $1.7 billion in 2009 due to the slump in demand for rough diamonds. While the company expects stronger sales in 2010, the level achieved will remain lower than in 2008.

ECONWATCH

For the week ending Apr. 29, 2010:

Apr. 29 Apr. 22 Chng.
$1 = Euro 0.755 0.752 0.003
$1 = Rupee 44.42 44.62 -0.2
$1 = Israel Shekel 3.73 3.74 -0.01
$1 = Rand 7.36 7.46 -0.10
$1 = Canadian Dollar 1.01 1.00 0.01

Precious Metals
Gold $1,167.10 $1,142.00 $25.10
Platinum $1,730.00 $1,741.00 -$11.00

Stock Indexes Chng.
BSE 17,503.47 17,573.99 -70.52 -0.4%
Dow Jones 11,167.32 11,134.29 33.03 0.3%
FTSE 5,617.84 5,665.33 -47.49 -0.8%
Hang Seng 20,778.92 21,454.94 -676.02 -3.2%
S&P 500 1,206.77 1,208.67 -1.90 -0.2%
Yahoo! Jewelry 972.94 999.17 -26.23 -2.6%

USA
Birks & Mayors $0.95 $1.00 -$0.05 -5.0%
Blue Nile $55.31 $56.51 -$1.20 -2.1%
Charles & Colvard $2.31 $1.65 $0.66 40.0%
DGSE Companies $2.60 $2.58 $0.02 0.8%
Fuqi Intl. $11.00 $11.29 -$0.29 -2.6%
JCPenney $31.11 $31.65 -$0.54 -1.7%
Kohls $56.56 $58.57 -$2.01 -3.4%
LJ Intl. $2.66 $2.74 -$0.08 -2.9%
Macys $24.68 $24.48 $0.20 0.8%
Man Sang $2.33 $2.19 $0.14 6.4%
Movado Group $13.60 $12.94 $0.66 5.1%
Nordstrom $42.91 $45.34 -$2.43 -5.4%
Saks $10.25 $9.55 $0.70 7.3%
Signet $32.47 $34.03 -$1.56 -4.6%
Sothebys $35.11 $38.10 -$2.99 -7.8%
Tiffany $49.95 $50.91 -$0.96 -1.9%
Walmart $53.70 $54.49 -$0.79 -1.4%
Zale $3.39 $3.20 $0.19 5.9%

EUROPE
Bulgari €6.34 €6.51 -€0.17 -2.6%
Bijou Brigitte €130.20 €138.20 -€8.00 -5.8%
Damiani €0.94 €0.95 -€0.01 -1.1%
LVMH €86.93 €87.17 -€0.24 -0.3%
PPR €102.00 €109.00 -€7.00 -6.4%
Richemont CHF 40.27 CHF 39.96 CHF 0.31 0.8%
Swatch Group CHF 322.10 CHF 325.50 -CHF 3.40 -1.0%
Theo Fennell (pence) 36.00 37.00 -1.00 -2.7%

INDIA (rupee)
Classic Diamond 23.00 24.60 -1.60 -6.5%
Gitanjali Gems 115.95 119.05 -3.10 -2.6%
Goldiam Intl. 46.60 48.80 -2.20 -4.5%
Rajesh Exports 125.15 131.00 -5.85 -4.5%
Ren. Jewellery 79.35 81.20 -1.85 -2.3%
Su-Raj Diamonds 49.50 51.05 -1.55 -3.0%
Titan 2,111.05 2,049.15 61.90 3.0%
Zodiac JRD 37.40 40.85 -3.45 -8.4%
Suashish Diamonds 229.05 229.95 -0.90 -0.4%

NEW ZEALAND
Michael Hill NZD 0.73 NZD 0.73 NZD 0.00 0.0%

MINING STOCKS
CANADA
Harry Winston CAD 10.93 CAD 10.09 CAD 0.84 8.3%
Lucara Diamond CAD 0.97 CAD 0.99 -CAD 0.02 -2.0%
Mountain Province CAD 2.65 CAD 2.56 CAD 0.09 3.5%
Peregrine Diamonds CAD 2.50 CAD 2.34 CAD 0.16 6.8%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.86 CAD 0.93 -CAD 0.07 -7.5%
Stornoway Diamond CAD 0.64 CAD 0.66 -CAD 0.02 -3.0%
True North Gems CAD 0.08 CAD 0.10 -CAD 0.02 -15.8%
UK (pence)
African Diamonds 37.25 38.50 -1.3 -3.2%
Anglo American 2,880.00 2,800.00 80.0 2.9%
BHP Billiton 2,089.50 2,098.00 -8.5 -0.4%
Firestone Diamonds 41.50 38.25 3.3 8.5%
Gem Diamonds 290.00 286.00 4.0 1.4%
Gemfields 5.13 5.09 0.0 0.8%
Mwana Africa 10.25 10.35 -0.1 -1.0%
Namakwa Diamonds 35.15 34.00 1.2 3.4%
Petra Diamonds 83.00 80.00 3.0 3.8%
Rio Tinto plc 3,533.00 3,667.00 -134.0 -3.7%
Stellar Diamonds 13.50 14.01 -0.5 -3.6%

INDIA MARKET REPORT

RAPAPORT NEWS SERVICE | MAY 7, 2010 www.rapaport.com | news@rapaport.com

Industry Retail Mining General EconWatch India Jobs

RapUp May 7, 2010

European financial crisis expected to reduce consumer demand and increase investor demand as euro deteriorates. Global diamond trade improving with strong activity in cutting centers. Discounts narrow amid reduced availability and high rough prices. Indian market hot for inexpensive pique goods up to 1 ct. Prices for smaller under the carat certs improving but discounts remain relatively high. Caraters firming. Large 3ct+ stone prices increase significantly with fine large XXX approaching list. Blue Nile 1Q sales +19% to $74m and profit +23% to $2.4m. Birks & Mayors 4Q sales +29% to $64m, FY10 sales -6% to $255m. Indias Titan Industries FY’10 group sales +22% to $1.05b, profits +53% to $56.4m. Hong Kong March precious metals jewelry exports +36% to $353m, imports +87% to $509m. Stellar Diamonds buys full ownership of Sierra Leone Kono mine from Petra Diamonds.

RapNet Data: May 7, 2010

Diamonds 645,534

Value $4,127,787,424

Carats 733,135

Average Discount -30.45%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

May
10-14
Mon-Fri

Rapaport Tender Auctions
New York

Melee Tender
Approximately 20,000 cts of polished round and fancy diamonds ranging in size from -2.5 sieve plate to 1ct +. Qualities vary from commercial to very fine including some breakout assortments. Excellent buying opportunity for diamond and jewelry manufacturers.

Viewing by Appointment Only
Please note this tender closes at 2 p.m. May 14

Contact: Jackie Tan
Email: auctions@rapaport.com
Phone: 1-212-354-9800 ext. 8534

June
6
Sun
Rapaport Conference at JCK Vegas 2010
New Date - Sunday, June 6
Marcello Ballroom
Venetian Hotel, Level 4

Rapaport Breakfast:
"The Diamond Decade: New Opportunities"
Martin Rapaport Presentation
8:00 a.m. - 10:00 a.m.

Diamond Certification Conference
12:00 p.m.- 2:00 p.m.

Fair Trade Jewelry Conference
2:00 p.m. - 4:30 p.m.

The Rapaport Conference is free and open to all.
To register e-mail: conference@diamonds.net
or call +1-702-893-9400

QUOTE OF THE WEEK:
The latest [Luxury Consumption Index] shows that ultra-affluents ncomes above $250,000] are spending at pre-recession levels, while the aspirational consumers ncomes $100,000 to $249,999] are holding back. But even with their exuberant amounts of spending, the ultra-affluents cant sustain recovery in the luxury market alone. In order to generate real growth in the luxury market, marketers and retailers are going to have to entice the aspirationals back into spending.

Pam Danziger | President of Unity Marketing

INDUSTRY

Hong Kong Bans Rough From Cote dIvoire

The Diamond Federation of Hong Kong, China Ltd. (DFHK) informed the diamond trade that importing rough from Cote dIvoire was prohibited. The rough trade ban was approved on April 30 and is set to expire at midnight on October 31, 2010. Those in Hong Kong who do not follow this regulation face "substantial penalties, which may amount, in some cases, lead to imprisonment for seven years and/or a fine."

The UN Security Council (UNSC) has also upheld long-running diamond sanctions on Cote dIvoire through October, at which time the world body will again review this diamond embargo.

Stay informed on trade issues in Hong Kong by visiting DFHKs website.

Rapaport Weekly Broadcast

Buxbaum Jewelry Advisors has learned important lessons during the recession: Consumers are still buying jewelry, just with greatly reduced budgets, and that struggling retailers can certainly turn around their businesses instead of going out of business. One size does not fit all, certainly, but the key to success involves flexibility, strategic promotions and growing brand appeal across a broader spectrum of the marketplace. WATCH NOW.

RETAIL

Blue Nile 1Q Revenue +19%

Blue Niles first-quarter sales rose 19 percent to $74.1 million, this increase was compared with an 11 percent drop one year ago. Cost of sales rose 18.5 percent to $58.3 million. Profits for the quarter improved 23 percent to $2.4 million. International sales grew 71.4 percent to $9.6 million, but excluding the impact from changes in foreign exchange rates, international sales increased 51.8 percent. This means that sales in the U.S. came to $64.5 million, an increase of 14 percent. Gross profit improved 10 basis points to 21.3 percent compared with 21.2 percent for the first quarter of 2009.

Titans Fiscal-Year Sales +22%

Titan Industries fiscal-year net sales rose 22 percent year over year to $1.05 billion (INR 46.77 billion), with jewelry sales up 27 percent to $786 million and watch sales increasing by 13 percent to $230.9 million. The group noted that its watch and jewelry segments also benefited from a good wedding season in the first quarter.

Titan cut its expenses by 22 percent to $973.8 million for the year, while its net profits jumped 53 percent year over year to $56.4 million. The retailer added 52 stores during the fiscal year, bringing its store total to 539.

Finlay Posts $2M Loss for March

Finlay Enterprises posted a net loss of $2.4 million in March 2010, the most recent month that the company provided operational data to bankruptcy court. Cash from liquidation sales totaled $12.2 million for the month. Since filing for Chapter 11 in August, Finlay has collected $273.9 million in merchandise sales and reported a net loss of $97.7 million.

Birks & Mayors Fiscal-Year Sales Drop 6%

Birks & Mayors fiscal-year sales fell by 6 percent to $255.1 million, with its comparable-store sales down by the same percentage. The companys comparable-store sales in the U.S. dropped 12 percent, while in Canada, they decreased by just 1 percent. Birks & Mayors forecasted a net loss of between $18 million and $20 million for the year.

Kristalls Profits Fall 44%

Kristalls profits fell by 44 percent in 2009 to $302,420 as its debt costs mounted and the company imported more rough during the year. ALROSA, the companys main supplier, did not sell goods in the first half of 2009, so Kristall had to import to keep up with polished demand. The companys polished sales rose slightly to $263.5 million, with 0.7 percent of goods being sold domestically, 13.5 percent was sold to Israel, 11.2 percent went to the United Arab Emirates (UAE), 8.6 percent was sold to the U.S., 4.6 percent to Hong Kong and 3.7 percent to Belgium. Kristalls inventory shrank by 56 percent to $51 million for the year.

Sothebys Revenue Rises 89% in 1Q

Sothebys revenue rose by 89 percent to $101.9 million in the first quarter, while its expenses fell by 15 percent to $94 million. The company reported a net loss of $2.2 million, compared with the loss of $35 million it posted one year ago.

Zales Goal Within Reach

Zale announced in February that it had a 90-day window during which to secure as much as $150 million in new equity. Now, according to insiders, that goal is within reach and the companys plans could be made public next week. The insiders have suggested that Golden Gate Capital will secure the funds and gain two seats on Zales board. Meanwhile, Zale was given a four-week extension by Citibank to pay a $6 million penalty while the two negotiate new credit-card-service arrangements.

Hong Kongs 1Q Jewelry Imports +53%

Hong Kong’s precious metal jewelry imports increased by 53 percent to $1.29 billion during the first quarter. Meanwhile, the country’s precious metal jewelry exports grew by 29 percent to $885 million for the quarter. Domestic exports were up by 34 percent to $195 million, while re-exports rose 27 percent to $690 million.

Luxury Goods Sales, Prices Remain Strong

MasterCard Advisors’ SpendingPulse provided data on retail sales in the U.S. for April and concluded that overall, the results were mixed. Sales for the luxury goods category, however, again enjoyed easy year-over-year comparisons and very strong price increases, with the Price Index being up 10.6 percent. Luxury good sales increased by 15.5 percent compared with April 2009.

Across retail chain-stores in the U.S., sales in April on a same-store basis rose 0.8 percent, slightly ahead of earlier predictions, according to the International Council of Shopping Centers (ICSC). When combining March and April figures to reflect Easter spending, the increase was 4.9 percent, to which ICSC called "likely above what will be sustainable for the year."

Retailers Must Entice Affluents to Spend

Unity Marketings latest research on affluent consumers shopping habits found that important structural changes are taking place in that consumer confidence is split according to income. Those with incomes of $250,000 or more, who are known as "ultra-affluents," increased their spending on luxury goods by 22.6 percent between the fourth quarter of 2009 and the first quarter of 2010, while the lower-income, "aspirational" affluents with incomes between $100,000 and $249,999 increased their spending by just 1.9 percent.

Since aspirational affluents comprise 21 million households in the U.S., Unity Marketing warned luxury marketers and retailers that they must entice these shoppers to spend because ultra-affluents cannot sustain the retail recovery alone. Unity also found that 78 percent of affluents felt the U.S. is still in a recession.

GENERAL

London Robbers Strike Tiffany and De Beers

Ten masked men raided boutiques of Tiffany & Co. and De Beers after hours in Londons Westfield shopping center on Tuesday. The exact value of the goods stolen from the stores was not confirmed; however, estimates range from hundreds of thousands of dollars to $4 million. Thieves entered the shopping center through an unlocked fire exit door and then smashed the boutique windows with sledgehammers to gain entry and stole diamonds, jewelry and watches. The gang was in and out of the jewelry stores in 90 seconds.

Westfield was said to have the most sophisticated security in Europe, including motion alarms, CCTV, automatic plate recognition on parked cars and holding cells.

IDB Continues With Mission

The International Diamond Board (IDB) is still intact, but its generic marketing initiative is being developed without one of its founding members, ALROSA. Regular meetings are taking place between the three remaining members, however: De Beers, Rio Tinto and BHP Billiton. The concept of an industry-wide, generic marketing body was initiated by ALROSA in July 2008, but the mining giant withdrew its participation after implementing a change to its senior management team.

WDC Opens Registration for St. Petersburg

The World Diamond Council (WDC) opened registration for its seventh annual meeting, which will be held in St. Petersburg, Russia on July 14 and 15. The annual WDC meeting will begin with committee working sessions on July 14. The official opening will take place on the morning of July 15 and be immediately followed by the WDC Plenary.

Boaz Hirsch, the current chair of the Kimberley Process (KP), will be the keynote speaker. The meeting will commence the day after the conclusion of the World Diamond Congress of the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA), which is taking place in Moscow.

Industry Movers and Shakers

Jewelry style expert Michael OConnor will be expanding co-marketing opportunities for Couture with other luxury brands across a variety of disciplines. Gem expert Gary Roskin will teach Gem-As introductory foundation lab class at New Yorks Fashion Institute of Technology (FIT) on May 15 and May 16.

The World of Gems Conference II announced the following speakers for its October conference: James Shigley, Shane McClure, Elizabeth Strack, John Emmett, Christopher Smith, Jon Philips, Diane Flora and Michael Evers.

The JCK Vegas educational panel, titled "Diamond Dialogue — the Kimberley Process and Consumer Confidence," will be held on June 3 and feature Eli Izhakoff, Brad Brooks-Rubin, Matt Runci, Cecilia Gardner, Noora Jamsheer, John Hall and Dorothee Gizenga.

MINING

De Beers to Reduce Staff at Finsch

De Beers Consolidated Mines plans to reorganize operations at its Finsch diamond mine in South Africa, noting that its operating costs are on the increase as declines in diamond prices continue. The reorganization will also translate into a headcount reduction of 350. The Finsch mine employs 903 people, according to De Beers. The companys operations in South Africa have also been impacted by a strong rand against the dollar, which reduces influx of local currency for the mine.

FLO, ARM Approve Fair Trade Gold Standard

The Fair Trade Labelling Organizations International (FLO) and the Alliance for Responsible Mining (ARM) developed the first-ever, third-party independent certification for gold to bring about social, environmental and economic development in artisanal and small-scale mining communities. This partnership enables both organizations to meet shared strategic objectives, creating a system designed to ensure that artisanal and small-scale miners can earn better prices for their gold. The partnership will be indicated on the products via a co-labeling hallmark that utilizes both the "FAIRTRADE" and "FAIRMINED" hallmarks.

De Beers Spends $292M in North Canada

De Beers Canada spent $292 million on goods and services for its Snap Lake and Victor mine operations in 2009. The company spent $152 million on service contracts for Snap Lake, 74 percent of which was supplied by northern businesses and 51 percent of which was provided by aboriginal suppliers. At Victor, pictured, De Beers spent $119 million on goods and services, with 32 percent of this total supplied by aboriginal businesses. De Beers Canada contributed $3.7 million in corporate social investments for education, youth literacy and capacity-building for the year.

ECONWATCH

For the week ending May 6, 2010:

May. 6 Apr. 29 Chng.
$1 = Euro 0.785 0.755 0.030
$1 = Rupee 45.37 44.42 0.9
$1 = Israel Shekel 3.78 3.73 0.05
$1 = Rand 7.67 7.36 0.31
$1 = Canadian Dollar 1.03 1.01 0.02

Precious Metals
Gold $1,207.80 $1,167.10 $40.70
Platinum $1,649.00 $1,730.00 -$81.00

Stock Indexes Chng.
BSE 16,987.53 17,503.47 -515.94 -2.9%
Dow Jones 10,517.98 11,167.32 -649.34 -5.8%
FTSE 5,260.99 5,617.84 -356.85 -6.4%
Hang Seng 20,133.41 20,778.92 -645.51 -3.1%
S&P 500 1,127.77 1,206.77 -79.00 -6.5%
Yahoo! Jewelry 882.59 972.94 -90.35 -9.3%

USA
Birks & Mayors $1.70 $0.95 $0.75 78.9%
Blue Nile $51.11 $55.31 -$4.20 -7.6%
Charles & Colvard $2.43 $2.31 $0.12 5.2%
DGSE Companies $2.42 $2.60 -$0.18 -6.9%
Fuqi Intl. $9.60 $11.00 -$1.40 -12.7%
JCPenney $28.12 $31.11 -$2.99 -9.6%
Kohls $54.87 $56.56 -$1.69 -3.0%
LJ Intl. $2.42 $2.66 -$0.24 -9.0%
Macys $22.62 $24.68 -$2.06 -8.3%
Man Sang $1.97 $2.33 -$0.36 -15.5%
Movado Group $11.79 $13.60 -$1.81 -13.3%
Nordstrom $40.98 $42.91 -$1.93 -4.5%
Saks $9.00 $10.25 -$1.25 -12.2%
Signet $30.42 $32.47 -$2.05 -6.3%
Sothebys $33.61 $35.11 -$1.50 -4.3%
Tiffany $45.27 $49.95 -$4.68 -9.4%
Walmart $53.52 $53.70 -$0.18 -0.3%
Zale $2.64 $3.39 -$0.75 -22.1%

EUROPE
Bulgari €6.06 €6.34 -€0.28 -4.4%
Bijou Brigitte €117.50 €130.20 -€12.70 -9.8%
Damiani €0.87 €0.94 -€0.07 -7.4%
LVMH €83.66 €86.93 -€3.27 -3.8%
PPR €98.43 €102.00 -€3.57 -3.5%
Richemont CHF 37.92 CHF 40.27 -CHF 2.35 -5.8%
Swatch Group CHF 304.60 CHF 322.10 -CHF 17.50 -5.4%
Theo Fennell (pence) 36.00 36.00 0.00 0.0%

INDIA (rupee)
Classic Diamond 22.15 23.00 -0.85 -3.7%
Gitanjali Gems 113.20 115.95 -2.75 -2.4%
Goldiam Intl. 43.15 46.60 -3.45 -7.4%
Rajesh Exports 122.50 125.15 -2.65 -2.1%
Ren. Jewellery 88.50 79.35 9.15 11.5%
Su-Raj Diamonds 48.55 49.50 -0.95 -1.9%
Titan 2,170.60 2,111.05 59.55 2.8%
Zodiac JRD 33.55 37.40 -3.85 -10.3%
Suashish Diamonds 253.50 229.05 24.45 10.7%

NEW ZEALAND
Michael Hill NZD 0.73 NZD 0.73 NZD 0.00 0.0%

MINING STOCKS
CANADA
Harry Winston CAD 11.50 CAD 10.93 CAD 0.57 5.2%
Lucara Diamond CAD 0.86 CAD 0.97 -CAD 0.11 -11.3%
Mountain Province CAD 2.50 CAD 2.65 -CAD 0.15 -5.7%
Peregrine Diamonds CAD 2.27 CAD 2.50 -CAD 0.23 -9.2%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.80 CAD 0.86 -CAD 0.06 -7.0%
Stornoway Diamond CAD 0.59 CAD 0.64 -CAD 0.05 -7.8%
True North Gems CAD 0.08 CAD 0.08 CAD 0.00 0.0%
UK (pence)
African Diamonds 35.20 37.25 -2.1 -5.5%
Anglo American 2,545.50 2,880.00 -334.5 -11.6%
BHP Billiton 1,872.50 2,089.50 -217.0 -10.4%
Firestone Diamonds 40.00 41.50 -1.5 -3.6%
Gem Diamonds 280.00 290.00 -10.0 -3.4%
Gemfields 5.01 5.13 -0.1 -2.3%
Mwana Africa 9.12 10.25 -1.1 -11.0%
Namakwa Diamonds 36.50 35.15 1.4 3.8%
Petra Diamonds 79.25 83.00 -3.8 -4.5%
Rio Tinto plc 3,106.50 3,533.00 -426.5 -12.1%
Stellar Diamonds 13.93 13.50 0.4 3.2%

GIA identifikuje karát-plus CVD syntetický diamant hruškovitého tvaru.
10.05.2010

To G-farebný CVD syntetického diamantu, skontroloval gemologického inštitút Ameriky, váži 1,05 karátov. Fotografie: Jian Xin "Jae" Liao

New York - Prvýkrát, gemologický inštitút (GIA), americký New York laboratórium určilo blízko-bezfarebný, chemicky (CVD)-pestovaný diamant, ktorý váži viac ako karát.

Podľa autora Wuyi Wang a Kyaw SOE Moe v májovom čísle GIA Drahokamy a Gemologie Mesačný e-bulletin "eBrief", 1.05-karát, hruškovitý kameň bol predložený do laboratória pre triedenie a bol farebný hodnotených ako ekvivalent k "G." Okrem určenia inklúzie, kameň obsahoval niektoré pierrka a inkluzie po pás a jej jasnosť stupeňa bol ekvivalent k "I1".

"Je zrejmé, CVD syntetické diamanty majú lepšiu kvalitu a veľkosť sú vyrábané techniky a budú sa naďalej zlepšovať," uzatvára správa GIA.

Kým karát-plus laboratórne-pestované farebné diamanty boli k dispozícii už dlhšiu dobu, majú spoločnosti, ako je Boston-založené Apollo Diamond, sa nedostavil no mali rovnakú veľkosť úspechu s rozvojom väčších veľkostí bezfarebných a -colorless diamantmi, a to najmenej až do súčasnosti. Newsletter ; sa nevzťahuje povinosť zverejniť pôvod tohto konkrétneho CVD-pestovaného diamantu.

Okrem zisťovania farby a jasnosti, GIA poznamenáva, že žiadna fluorescencia nebola spozorovaná, keď bol kameň vystavený konvenčnému dlhému UV žiareniu, eBrief . Infračervené absorpčné spektrum ukázalo, že diamant bol vzorka typu IIa.

Snímky urobené DiamondView, ktoré používa silné ultra krátke-žiarenia, ukázali silné oranžovo-červené fluorescencie s niektorými nepravidelne tvarovanými oblastami modrej fluorescencie.

Zdroj ;Americký zlatnícky denník😉

RAPAPORT NEWS SERVICE | MAY 14, 2010 www.rapaport.com | news@rapaport.com

Retail Mining General Stats EconWatch India Jobs

RapUp May 14, 2010

Gold hits new high ($1,249.60/oz) with investors seeking safe haven from European financial crisis. Polished diamond traders gain confidence as prices firm and manufacturing increases. Rough premiums rise. Sotheby’s sells $54m at Geneva jewelry auction (87.9% by lot) with cushion-shape, 7.64-ct, fancy intense blue diamond ring fetching $8m ($1.1m/ct). Bulgari 1Q jewelry & watch sales +11% to $112m. Gem Diamonds 1Q sales +11% to $43m, Letseng mine April tender achieves average $2,002/ct. Zale secures loan and new bank facilities, lowers debt to $160m. U.S. March polished imports +86% to $1.6b, polished exports +68% to $1.2b. Israel’s April polished exports +417% to $483m. Japan’s 1Q polished imports flat at $174m. Botswana 1Q diamond exports +101% to $477m. DTC Botswana appoints G. Gabaake to replace Varda Shine as chairman.

RapNet Data: May 14, 2010

Diamonds 643,283

Value $4,235,817,191

Carats 738,753

Average Discount -31.06%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

May
19-20
Wed-Thu
Shavuot Holiday

The Rapaport Price List will not be published on May 21 and Rapaport offices will be closed Wednesday and Thursday (May 19-20) due to the Jewish Holiday of Shavuot.

June
4-10
Fri-Thu

Rapaport Polished Diamond Tender Auction
at the JCK Las Vegas Show

Certified and non-certified diamonds. Single stone lots.
0.50 ct. to 5.00 ct, broad range of shapes and qualities.

The auction opens Friday June 4 at the JCK Vegas show and ends 5 p.m., June 10, at Rapaport New York office.

Viewing at the show: Rapaport Booth 3080, upper level.

Buyers: For appointment and bidder registration contact Rapaport New York Email: auctions@diamonds.net Tel: +1-212-354-9800.

Motivated sellers are invited to submit diamonds at cash prices. Deadline for delivering diamonds: Thursday May 27. Contact Myles Schakler at Rapaport New York for information.

June
6
Sun
Rapaport Breakfast and Conference Schedule
New Date - Sunday, June 6
Marcello Ballroom
Venetian Hotel, Level 4

Rapaport Breakfast 8 a.m. - 10 a.m.

Martin Rapaport keynote address: "The Diamond Decade: New Opportunities"

Find out what is really going in the diamond industry. Transform change and challenge into opportunity.

Diamond Certification Conference 12 p.m. - 2 p.m.

From counterfeits to misleading standards, are certificates being used to mislead consumers? Join the debate and share how standards affect the business.

Fair Trade Jewelry Conference 2 p.m. - 4:30 p.m.

Join an open debate on the rapidly expanding wave of socially responsible jewelers who are promoting a fair and more ethical industry.

The Rapaport Conference is free and open to all.
To register e-mail: conference@diamonds.net
or call +1-702-893-9400

June
14-17
Mon-Thu
Rapaport Pawn Shop Tender Auction
in New York

Over 35,000 carats of small to medium size diamonds in parcels.

Viewing by appointment only.

Contact: auctions@diamonds.net +1-212-354-9800

QUOTE OF THE WEEK:
I think [gold] is trying to take another bet at $1,250 again. Theres always the question of a loss of confidence in paper currencies when governments have such big deficits. This loss of confidence will definitely be there to stay.

Wong Eng Soon | Phillip Futures, Singapore

Careers@Rapaport

The Rapaport Group is growing rapidly. If you want to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants, and entry level positions for our offices in New York, Antwerp, Mumbai, Dubai, and Shanghai. To get on the fast track, email your resume to careers@rapaport.com. Visit us at the JCK Show Booth 3080.

RETAIL

Rapaport Weekly Broadcast

WATCH NOW: Gold maintains a record run. LPGA pro Cristie Kerr (pictured) partners with Kwiat on a diamond jewelry line to benefit “Birdies for Breast Cancer.” The partnership was celebrated in Manhattan at Kwiats Madison Avenue boutique. Sothebys Geneva sells two remarkable diamonds, a 7.64-carat fancy intense blue diamond ring for $8 million; and an emerald-cut, 52.82-carat diamond for nearly as much. U.S. weekly chain store sales and Macys quarterly sales reflect low single-digit increases.

Bulgari Posts $11M Loss

Bulgari Group narrowed its losses to $10.6 million (EUR 8.3 million) for the three months that ended on March 31, 2010, compared with the loss of $37.3 million (EUR 29.3 million) it posted for the previous year. The company reports its financial data in euros, but in dollars, Bulgaris revenues rose 12 percent to $253.4 million during the quarter as its jewelry sales increased by 10.6 percent to $112.2 million. Watch sales fell 1.4 percent to $52.8 million. Bulgari lowered its operating costs by 7 percent and reduced its advertising and promotional expenses by 9 percent during the quarter.

LJ Intl.s Revenue +18%

LJ International reported that its revenue rose 18 percent to $26.9 million during the first quarter of 2010 as its cost of goods increased by 13 percent to $15.7 million. The company reported a net income of $1.9 million against the $129,000 it posted one year ago. Revenue increased due, in part, to a 38 percent jump in sales at the companys ENZO jewelry stores in China, Hong Kong and Macau. ENZO revenue in the first quarter totaled $16.4 million. Meanwhile, LJ Internationals same-store sales were up 14 percent.

Wholesale operations registered a drop of 3 percent in sales to $10.4 million during the period. While LJ International reported that retail is the companys primary avenue of growth, they also expect wholesale revenues to reflect a healthy increase in the coming quarters.

Berkshires Retail Sales +3%

Berkshire Hathaways retail segment sales, which include sales registered at Borsheim’s Jewelry, Helzberg Diamonds and Ben Bridge Jeweler, rose 3 percent to $675 million in the first quarter of 2010. The segments combined pre-tax retail earnings doubled from the first quarter of 2009 to total $32 million for the first quarter of 2010. Berkshire Hathaways group revenues rose 41 percent to $32 billion in the first quarter, while its net earnings increased to $3.8 billion against the loss of $1.5 billion it recorded one year ago.

Damas Encounters Delay on Repayment

Damas says it is taking longer than expected to recover unauthorized funds withdrawn by the Abdullah brothers. This delay in payments does not constitute a default on its agreement with the brothers, however; the $55 million originally due on April 30 will instead be carried forward. In 2009, Tawhid Abdulla was forced to resign from Damas for conducting “unauthorized transactions” valued at approximately $165 million. The two parties reached a repayment agreement in November.

Zale Reaches Financing Goal

Zale secured a new $150 million, five-year, senior-secured-term loan from Golden Gate Capital. The lender will receive the interest and fees that accrue on the Golden Gate Capital loan and warrants in order to purchase common stock aggregating a 25 percent equity interest in Zale on a fully diluted basis, once the necessary shareholder approvals are obtained.

Zale also closed on a new bank credit facility that amended and extended its existing, asset-backed credit facility. The credit facility aggregates commitments of $650 million, including a $108 million seasonal adjustment. Zales previous credit facility totaled $600 million, including a $100 million seasonal adjustment. After applying Golden Gate Capitals loan to the repayment of outstanding indebtedness under its existing bank facility, Zale expects to have approximately $160 million in outstanding indebtedness and available liquidity of approximately $250 million.

Asprey Cufflinks to Benefit EPCC

Actors Brad Pitt and Angelina Jolie partnered with retailer Asprey to create a limited-edition "Protector" collection of cufflinks. The white-gold, snake-motif links feature black diamonds and retail for $10,000. Proceeds from the sale of these cufflinks will benefit the Education Partnership for Children of Conflict (EPCC), a charitable trust co-founded by Jolie.

GENERAL

Lazare Kaplans Audit Stalls

Lazare Kaplan was informed by insurers and underwriters that its request for payment on certain claims was being denied at this time. The underwriters decision did not require Lazare Kaplan to return an interim payment of $28 million or the companys "sue and labor" costs and expenses, which were previously paid.

Given this development, Lazare Kaplan was unable to resolve the "material uncertainties" that it said had prevented it from completing an audit of its 2009 fiscal-year financial statements or the unaudited financial statements for the subsequent interim periods.

Christies Jewels Sale in Geneva Totals $34M

Christies Geneva spring jewelry sale generated $33.9 million, with signed period jewels proving to be the most popular items with bidders. The top lot (pictured) was a rectangular-cut, 40.21-carat, D, flawless diamond ring that sold for $5,129,100. A circular-cut diamond riviere with a total carat weight of 155.17 sold for $4,725,900, well above its high presale estimate of $2.4 million. The top lot at Christies watch sale was a gold Patek Philippe Perpetual Calendar chronograph wristwatch with moon phases that sold for $5,708,833.

Antwerp Diamond Bank Reports Loss

The Antwerp Diamond Bank (ADB) reported a net loss of $15.3 million (EUR 12 million) for 2009, compared with the profit of $37.9 million (EUR 29.7 million) it recorded one year ago. The banks balance sheet shrank by 24 percent to $1.66 billion, reflecting the contraction of activity within the diamond industry. The bank also took on a debtors impairment charge of $68.9 million.

Shrenuj Opens Facility in Gaborone

Shrenuj Botswana inaugurated its diamond-cutting and polishing factory in Gaborone and also announced plans to establish a jewelry manufacturing facility in Botswana by September. The company currently employs 151 people at the facility, which has the capacity to employ about 230 people. The 15,000-square-foot factory has the capacity to process approximately $100 million worth of rough per year. Shrenuj also has a small factory in Israel. Its main manufacturing operations are based in Surat.

HRD Partners With Womens University

HRD Antwerp signed a cooperation agreement with the Jasani department of jewelry design and manufacturing at S.N.D.T. Womens University in India to conduct a diamond-grading course and a basic gemology course there. Students will receive a joint diploma issued by S.N.D.T. and HRD Antwerp certifying their diamond-grading skills as meeting qualified "diamond grader" benchmarks and their basic gemology knowledge, both of which are required by any designer or jewelry professional wishing to develop his or her skills.

Gabaake Replaces Shine as DTCB Chair

The Diamond Trading Company Botswana (DTCB) appointed Gabaake G. Gabaake to replace Varda Shine as chair. Gabaake is currently the permanent secretary in Botswanas Ministry of Minerals, Energy and Water Resources. Shine is managing director of the Diamond Trading Company (DTC), the De Beers subsidiary that owns 50 percent of DTCB in partnership with the Botswana government.

Friedman Passes Away in L.A.

Maximilian E. Friedman of Los Angeles passed away May 2, 2010, shortly after having just celebrated his 93rd birthday. As a young man, Friedman lived in Antwerp and was trained in diamond cutting. He escaped Belgium in 1937 and came to New York City to begin a new life. He founded his own business, Maximilian E. Friedman Co., in 1944 and traveled the U.S. for many years. But in the mid-1960s, he decided to relocated his family and business to California.

STATS

Israel Apr. Imports & Exports

Apr. 10 YTD 10
$Mil Chng. $Mil Chng.
Polished Exports $483 417% $1,940 88%
Polished Imports NA NA NA NA
Net Exports NA NA NA NA

Rough Imports NA NA NA NA
Rough Exports $232 114% $1,060 145%
Net Imports NA NA NA NA

Net Diamond Acct. $158 $696 45%

U.S. Mar. Imports & Exports

Mar. 10 YTD 10
$Mil Chng. $Mil Chng.
Polished Imports $1,555 86% $4,079 73%
Polished Exports $1,219 68% $3,094 55%
Net Imports $336 203% $985 171%

Rough Imports $45 137% $121 210%
Rough Exports $20 82% $52 63%
Net Imports $25 213% $69 886%

Net Diamond Acct. $361 203% $1,054 184%

Botswanas 1Q Diamond Exports

Botswanas diamond exports rose 101 percent to $477 million during the first quarter of 2010. Preliminary export statistics compiled by the Bank of Botswana revealed that Januarys exports were nearly $253 million, but Februarys exports were lower at $172 million. March was the weakest month with exports of only $53 million. Gold exports for first quarter 2010 rose 87 percent to $13.3 million.

Japans 1Q Polished Imports

Japan’s first quarter polished diamond imports remained flat at $174 million. Polished imports from Hong Kong rose 17.6 percent to $17.2 million, while those from all other supply countries fell. Imports from India dropped 9 percent to $73 million, from Belgium they declined 27.7 percent to $41.8 million, and from Israel they decreased 14.6 percent to $20.1 million.

MINING

Gem 1Q Sales Rise on Strong Prices

Gem Diamonds rough sales rose 11 percent to $42.9 million in the first quarter of 2010 in part due to strong prices. The mining company observed that consumer demand for goods had improved and positively impacted polished prices; however, price increases for finished goods have not risen as sharply as they have for rough diamonds.

The average price per carat from Letseng diamonds rose 72 percent to $1,753. Letseng’s April tender achieved an average price of $2,002 per carat. Production from the mine fell 6 percent to 20,507 carats. Gem Diamonds ended the quarter with $88.5 million in cash and no debt.

IGE 1Q Loss Jumps to $3M

IGE Resources closed its first fiscal quarter with a loss of $2.85 million (SEK 21.7 million or SEK 0.03 per share), compared with the loss of $696,000 (SEK 5.3 million) it posted one year ago. The company doesnt report in dollars, but it spent $1.5 million to buy diamond operations from Pangea DiamondFields and took a loss of $643,000 from the sale of exploration permits.

IGE further reported that it had reached an agreement with ENDIAMA to move toward production at the Luxinge diamond project. IGE Resources portfolio includes exploration for diamonds, gold and nickel.

Afri-Can Recovers Samples from Block J

Afri-Can Marine recovered 112 diamonds, average size 0.17 carats, from its Block J excavation program in Namibia. The two largest diamonds weighed 0.52 and 0.50 carats. The aim of sample program was to delineate diamond resources on Block J in compliance with National Instrument 43-101. Afri-Can holds a 70 percent interest in Block J through a joint venture agreement with the licensee Woduna Mining Holdings.

Trans Hex Receives New License

Trans Hex received a mining license to operate its Luana concession in Angola. The junior explorer owns 33 percent stake in the project. Pilot production is underway. Its Luarica and Fucauma operations in Angola remain on care and maintenance.

ECONWATCH

For the week ending May 13, 2010:

May. 13 May. 6 Chng.
$1 = Euro 0.796 0.785 0.011
$1 = Rupee 45.03 45.37 -0.3
$1 = Israel Shekel 3.75 3.78 -0.03
$1 = Rand 7.47 7.67 -0.20
$1 = Canadian Dollar 1.02 1.03 -0.01

Precious Metals
Gold $1,232.90 $1,207.80 $25.10
Platinum $1,735.00 $1,649.00 $86.00

Stock Indexes Chng.
BSE 17,265.87 16,987.53 278.34 1.6%
Dow Jones 10,782.95 10,517.98 264.97 2.5%
FTSE 5,433.73 5,260.99 172.74 3.3%
Hang Seng 20,422.46 20,133.41 289.05 1.4%
S&P 500 1,157.43 1,127.77 29.66 2.6%
Yahoo! Jewelry 927.25 882.59 44.66 5.1%

USA
Birks & Mayors $1.53 $1.70 -$0.17 -10.0%
Blue Nile $51.66 $51.11 $0.55 1.1%
Charles & Colvard $2.49 $2.43 $0.06 2.5%
DGSE Companies $2.40 $2.42 -$0.02 -0.8%
Fuqi Intl. $10.11 $9.60 $0.51 5.3%
JCPenney $28.34 $28.12 $0.22 0.8%
Kohls $54.01 $54.87 -$0.86 -1.6%
LJ Intl. $2.78 $2.42 $0.36 14.9%
Macys $23.54 $22.62 $0.92 4.1%
Man Sang $2.00 $1.97 $0.03 1.5%
Movado Group $12.91 $11.79 $1.12 9.5%
Nordstrom $41.46 $40.98 $0.48 1.2%
Saks $9.48 $9.00 $0.48 5.3%
Signet $32.79 $30.42 $2.37 7.8%
Sothebys $36.24 $33.61 $2.63 7.8%
Tiffany $46.58 $45.27 $1.31 2.9%
Walmart $52.57 $53.52 -$0.95 -1.8%
Zale $2.98 $2.64 $0.34 12.9%

EUROPE
Bulgari €6.60 €6.06 €0.54 8.9%
Bijou Brigitte €121.30 €117.50 €3.80 3.2%
Damiani €0.87 €0.87 €0.00 0.0%
LVMH €91.65 €83.66 €7.99 9.6%
PPR €105.30 €98.43 €6.87 7.0%
Richemont CHF 41.55 CHF 37.92 CHF 3.63 9.6%
Swatch Group CHF 333.20 CHF 304.60 CHF 28.60 9.4%
Theo Fennell (pence) 35.00 36.00 -1.00 -2.8%

INDIA (rupee)
Classic Diamond 21.25 22.15 -0.90 -4.1%
Gitanjali Gems 112.20 113.20 -1.00 -0.9%
Goldiam Intl. 45.75 43.15 2.60 6.0%
Rajesh Exports 125.05 122.50 2.55 2.1%
Ren. Jewellery 86.35 88.50 -2.15 -2.4%
Su-Raj Diamonds 52.40 48.55 3.85 7.9%
Titan 2,241.35 2,170.60 70.75 3.3%
Zodiac JRD 31.00 33.55 -2.55 -7.6%
Suashish Diamonds 273.40 253.50 19.90 7.9%

NEW ZEALAND
Michael Hill NZD 0.73 NZD 0.73 NZD 0.00 0.0%

MINING STOCKS
CANADA
Harry Winston CAD 12.72 CAD 11.50 CAD 1.22 10.6%
Lucara Diamond CAD 0.85 CAD 0.86 -CAD 0.01 -1.2%
Mountain Province CAD 2.45 CAD 2.50 -CAD 0.05 -2.0%
Peregrine Diamonds CAD 2.33 CAD 2.27 CAD 0.06 2.6%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.83 CAD 0.80 CAD 0.03 3.7%
Stornoway Diamond CAD 0.59 CAD 0.59 CAD 0.00 0.0%
True North Gems CAD 0.08 CAD 0.08 CAD 0.00 0.0%
UK (pence)
African Diamonds 35.00 35.20 -0.2 -0.6%
Anglo American 2,751.00 2,545.50 205.5 8.1%
BHP Billiton 2,005.50 1,872.50 133.0 7.1%
Firestone Diamonds 38.25 40.00 -1.8 -4.4%
Gem Diamonds 284.00 280.00 4.0 1.4%
Gemfields 5.00 5.01 0.0 -0.2%
Mwana Africa 8.95 9.12 -0.2 -1.9%
Namakwa Diamonds 36.50 36.50 0.0 0.0%
Petra Diamonds 79.25 79.25 0.0 0.0%
Rio Tinto plc 3,360.58 3,106.50 254.1 8.2%
Stellar Diamonds 13.00 13.93 -0.9 -6.7%

INDIA MARKET REPORT

RAPAPORT NEWS SERVICE | JULY 2, 2010

Retail & Wholesale Mining Stats EconWatch India Jobs

RapUp July 2, 2010

Trading centers stable. Buyers at June Hong Kong show edge up on prices but still resist high seller asking prices. Zimbabwe cabinet approves illegal Marange rough sales with KP certificates and government agency says it already sold $23m worth in 2010. Botswana approves rough tenders from AK6 mine. Harry Winston secures $100m credit facility. Lazare Kaplan to be delisted from NYSE. Japan’s May polished imports +3% to $47.4m. New York State establishes $100m mortgage fund for International Gem Tower.

RapNet Data: July 1, 2010

Diamonds 706,397

Value $4,481,037,223

Carats 788,031

Average Discount -30.83%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

July
25-28
Sun-Wed
Rapaport at JA New York Summer Show

Javits Convention Center
Booth 2300
New York, NY USA

Rapaport Contact: Sherri Hendricks
+1-702-893-9400 or email sherri.hendricks@diamonds.net.

QUOTE OF THE WEEK:
The untenable situation in the Marange diamond fields will be part of our intensive discussions during the [34th World Diamond Congress in Moscow]. At this point in time, we can only hope that the government of Zimbabwe will refrain from making any diamond shipments until all parties are in agreement.

Moti Ganz | IDMA president

Careers@Rapaport

The Rapaport Group is growing rapidly. If you want to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants, and entry level positions for our offices in New York, Antwerp, Mumbai, Dubai, and Shanghai. To get on the fast track, email your resume to careers@rapaport.com.

INDUSTRY

Zimbabwes Mines Minister Pushes Ahead

Zimbabwe mines minister Obert Mpofu claimed that his countrys cabinet, as well as Israel and the European Union (EU), approved diamond sales from the country.

"It was clear from the meeting that the cabinet agrees with the immediate sale of our diamonds," he told the state-run Herald newspaper. Zimbabwes estimated Marange stockpile totals more than 4 million carats worth about $1.7 billion. Mpofu said that he needs to come up with "a mechanism of proceeding with this ale] process. The mechanism will be transparent and accountable."

The mines minister also claimed that his country had met the minimum Kimberley Process (KP) requirements for diamond exportation and thus would sell rough stones through the Minerals Marketing Corporation of Zimbabwe, as prescribed by the countrys mandate, with KP certificates.

Earlier this week, Zimbabwe denied that it was forcing young men and boys to work at the Marange diamond fields, a charge leveled in a U.S. State Department report on human trafficking. The U.S. found that Zimbabwes security forces had coerced youths into forced labor at the fields. Zimbabwes Home Affairs Minister, Kembo Mohadi, called the report false, however.

"Its all lies. We are not involved in diamond mining in Chiadzwa," he told the Zimbabwe Independent. "We only have a police post there, just like any diamond mine elsewhere. Its all lies; this is a figment of their own imagination."

The "Trafficking in Persons" 2010 report, published this month, concluded that Zimbabwe had not complied with minimum standards by eliminating the practice. The report said that the countrys government must stop utilizing local populations for forced diamond mining.

The U.S. State Department was disappointed that a consensus was not reached on Zimbabwe during the recent KP meeting in Tel Aviv and looked to Zimbabwe to demonstrate progress in implementing the schemes full compliance requirements. The U.S. State Department strongly opposed any attempts to export Marange diamonds before a consensus was reached.

Given the mines ministers statements, industry members were reminded by World Federation of Diamond Bourses (WFDB) president Avi Paz that they should not purchase diamonds originating from the Marange area until the KP approves these exports. Since export approval has not yet been granted to Zimbabwe, any WFDB member found buying Marange rough will be subject to disciplinary procedures.

Court Upholds EC Ruling on De Beers, ALROSA

The European Unions (EU) Court of Justice upheld a previous ruling forcing De Beers to cease all diamond purchases from ALROSA. After the European Commission (EC) expressed concern that a deal between the two companies could lead to monopolistic practices, De Beers agreed in 2006 to gradually reduce its buying and ceased all purchases from ALROSA in 2008, which the Commission adopted as a regulatory decision. But ALROSA appealed this decision on the grounds that it had not been heard by the court on the matter. The court subsequently dismissed ALROSA’s appeal.

Rapaport Weekly Broadcast

WATCH NOW: Zimbabwes mines minister made at least two major false statements to his countrys press corps following the KP meeting in Tel Aviv one of which caused the World Diamond Council to make it very clear which industry body was ultimately and solely responsible for approving Marange exports. Secondly, nongovernmental organizations (NGOs) had to defend themselves when the minister claimed they had attempted to "extort" export approval by asking for a bribe. Meanwhile, consumers in the U.S. do not feel good about the economy, despite what most pundits claim, as consumer confidence and the Dow tanked in June. Walmart appointed a new president for its U.S. retail operations.

War Crimes Court Subpoenas Super Model

The Special Court for Sierra Leone, the body tasked with determining Charles Taylors fate for war crimes, approved the prosecutions request to summon model Naomi Campbell and actresses Mia Farrow and Carol White. The defense claims that Taylor gave Campbell (pictured) a rough diamond in 1997. Farrow has told the press that she had first-hand knowledge of the gift. Prosecutors believe that testimony from the women will support claims that Taylor dealt in blood diamonds from Sierra Leone.

RETAIL & WHOLESALE

U.S. Chain-Store Sales +3%

U.S. chain-store sales rose 3 percent year on year this past week, according to the International Council of Shopping Centers (ISCS) and Goldman Sachs. Counter sales at the chains rose 2.1 percent against the previous week as department-store business picked up, ICSCs chief economist, Michael Niemira, noted. ICSC maintains that for the month of June, chain-store sales should increase in the range of 3 percent to 4 percent compared with one year ago.

Charm Diamond Centres to Sell Victor Stones

Charm Diamond Centres in Nova Scotia said it received the right to carry diamonds mined, cut and polished in Ontario, Canada. The companys diamonds are mined at the De Beers Victor mine and then cut and polished by Crossworks Manufacturing in Sudbury. The finished stones will be sold at select Charm Diamond locations and will also be available at all of its locations during Charms 2010 traveling trunk show.

Affluents Boost Jewelry Sales for 2009

Unity Marketing found that womens luxury jewelry purchases rose 6.5 percent year on year in 2009, while mens jewelry spending jumped to now account for 20 percent of total jewelry expenditures. The news was a bright spot in the companys Personal Luxury Report 2010, which also found that overall, fewer affluents indulged in luxury purchases, but those who did ended up spending more on products and services.

Myanmars Gems Sale Underway

Myanmars special gems emporium, currently underway in Yangon, is reportedly offering buyers 11,500 lots of jade, as well as gold, gemstones and finished jewelry. The 13-day gems emporium ends on July 7 and, according to the government, has already attracted more buyers than the annual emporium that was held in March. Myanmar sold about $500 million of gems during its March sale.

Moscow Congress Sets Agenda

The International Diamond Manufacturers Association (IDMA) set its agenda for the upcoming 34th World Diamond Congress to be held in Moscow from July 11 to July 13.The Congress will address issues in Zimbabwe, getting the International Diamond Board off the ground, and ongoing credit terms that are pressuring diamond manufacturers across the rough supply pipeline. Diamond manufacturers are determined to phase out their traditional role of bearing the brunt of the financial burden in the diamond supply pipeline, according to Moti Ganz (pictured), the president of IDMA.

GJF Weighs Direct Tax Code Proposal

The All India Gems & Jewellery Trade Federation (GJF) has opposed a proposed "search and seizure" and a 10 percent tax being considered as part of Indias Direct Taxes Code, according to Indias Business Line. The federation made its case to the Finance Ministry, noting that stock seizure would create problems for its members and that the provisions were discriminatory toward only a single industry. The 10 percent tax on all payments made for gold, diamonds and jewelry would also result in reduced working capital, especially for firms that are already having liquidity issues.

Dealer in Rosy Blue Case Dies

Diamond dealer Chad Davis reportedly died in Orlando, Florida. Davis, 38, was at the center of legal battle with Rosy Blue for $3 million in diamonds that he claimed had been stolen from him at a shopping mall. Rosy Blue contended, though, that Davis story was a scam and the company won a $6 million judgment. Davis claimed he couldnt pay the award and filed for bankruptcy. Rosy Blues attorney told the Orlando Sentinel that he could not speculate on how the dealers death would impact the ongoing litigation.

AWDC Board Elects New President

The board of directors for the Antwerp World Diamond Centre (AWDC) elected Nishit Parikh to serve as its president for the upcoming two years. Parikh, 44, is a citizen of Belgium, but was born in Navsari, India. He heads Diarough, which employs 50 in Antwerp and is a Diamond Trading Company sightholder. The board also elected two vice presidents to serve alongside Parikh -- Philippe Barsamian, who is a representative of the Antwerp diamond bourse, and Stéphane Fischler, who represents the manufacturers’ associations.

STATS

Japans Polished Imports +3% in May

Japan’s polished diamond imports rose 3.3 percent year on year to $47.4 million in May 2010. Polished imports from India increased by 5.8 percent to $18.4 million, while imports from Japans other two main supply sources, Belgium and Israel, fell 7.8 percent and 16.7 percent, respectively. During the first five months of the year, Japan’s polished imports were up 3.1 percent year on year to $274.5 million.

MINING

Negotiations for AK6 Sales Finalized

Lucara Diamond and African Diamonds completed a marketing arrangement with Botswana through their joint-venture company, Boteti, wherein production from the AK6 project may be sold through either open tender or exclusive contract. Lucara, the AK6 project operator, holds a 60 percent interest in Boteti, while African Diamonds holds 40 percent. An updated feasibility study of AK6 noted indicated resources of 8.2 million carats of diamonds, while the mines design delineated a probable reserve of 6.3 million carats in an open pit extending to a depth of 324 meters. These reserves will be mined over an 11-year life span. The study also indicated that the first phase would require a capital investment, including contingencies, of $120 million.

Jwaneng Mine Work Begins

Debswana and Firestone Diamonds will begin work on a modular tailings treatment plant at the Jwaneng Mine in Botswana. The project is a key component of developing toll treatment opportunities to supplement Firestones mining operations at BK11 and the evaluation and development of other kimberlites in the Orapa and Tsabong kimberlite fields. The Jwaneng tailings project could generate up to $150 million in toll treatment revenue. Firestone also reported significant progress at its BK11 project, with construction of the production plant on schedule.

Large Stone Found in Panna Mines

The National Mineral Development Corporation unearthed a 34.37-carat rough diamond at the Panna mines in Madhya Pradesh, India. The pear-shaped stone was described as being of extremely good quality and has been sealed in preparation for auction in Panna, according to India Today.

ECONWATCH

For the week ending July 1, 2010:

July 1 June 24 Chng.
$1 = Euro 0.811 0.811 0.000
$1 = Rupee 46.63 46.35 0.3
$1 = Israel Shekel 3.89 3.87 0.02
$1 = Rand 7.75 7.60 0.15
$1 = Canadian Dollar 1.06 1.04 0.02

Precious Metals
Gold $1,197.30 $1,240.90 -$43.60
Platinum $1,502.00 $1,561.00 -$59.00

Stock Indexes Chng.
BSE 17,509.33 17,730.24 -220.91 -1.2%
Dow Jones 9,732.53 10,152.80 -420.27 -4.1%
FTSE 4,805.75 5,100.23 -294.48 -5.8%
Hang Seng 20,128.99 20,733.49 -604.50 -2.9%
S&P 500 1,027.37 1,073.69 -46.32 -4.3%
Yahoo! Jewelry 766.69 823.50 -56.81 -6.9%

USA
Birks & Mayors $1.10 $1.17 -$0.07 -6.0%
Blue Nile $46.27 $48.87 -$2.60 -5.3%
Charles & Colvard $2.64 $2.85 -$0.21 -7.4%
DGSE Companies $3.20 $3.10 $0.10 3.2%
Fuqi Intl. $6.20 $8.23 -$2.03 -24.7%
JCPenney $21.43 $23.27 -$1.84 -7.9%
Kohls $48.72 $49.80 -$1.08 -2.2%
LJ Intl. $2.57 $2.85 -$0.28 -9.8%
Macys $18.30 $18.88 -$0.58 -3.1%
Man Sang $1.85 $1.95 -$0.10 -5.1%
Movado Group $10.81 $10.88 -$0.07 -0.6%
Nordstrom $32.78 $35.42 -$2.64 -7.5%
Saks $7.53 $8.03 -$0.50 -6.2%
Signet $27.59 $29.93 -$2.34 -7.8%
Sothebys $22.75 $26.30 -$3.55 -13.5%
Tiffany $38.12 $40.79 -$2.67 -6.5%
Walmart $48.35 $50.02 -$1.67 -3.3%
Zale $1.55 $1.92 -$0.37 -19.3%

EUROPE
Bulgari €5.82 €6.20 -€0.38 -6.1%
Bijou Brigitte €119.55 €118.50 €1.05 0.9%
Damiani €0.86 €0.90 -€0.04 -4.4%
LVMH €85.20 €92.04 -€6.84 -7.4%
PPR €98.10 €104.65 -€6.55 -6.3%
Richemont CHF 35.65 CHF 40.05 -CHF 4.40 -11.0%
Swatch Group CHF 294.20 CHF 321.00 -CHF 26.80 -8.3%
Theo Fennell (pence) 38.22 38.00 0.22 0.6%

INDIA (rupee)
Classic Diamond 20.80 21.25 -0.45 -2.1%
Gitanjali Gems 125.30 124.35 0.95 0.8%
Goldiam Intl. 44.50 44.10 0.40 0.9%
Rajesh Exports 82.15 86.60 -4.45 -5.1%
Ren. Jewellery 74.75 78.75 -4.00 -5.1%
Su-Raj Diamonds 50.95 52.25 -1.30 -2.5%
Titan 2,348.90 2,238.45 110.45 4.9%
Zodiac JRD 26.70 26.90 -0.20 -0.7%
Suashish Diamonds 175.00 173.50 1.50 0.9%

NEW ZEALAND
Michael Hill NZD 0.68 NZD 0.69 -NZD 0.01 -1.4%

MINING STOCKS
CANADA
Harry Winston CAD 13.09 CAD 13.49 -CAD 0.40 -3.0%
Lucara Diamond CAD 0.82 CAD 0.80 CAD 0.02 2.5%
Mountain Province CAD 2.73 CAD 2.50 CAD 0.23 9.2%
Peregrine Diamonds CAD 1.92 CAD 1.99 -CAD 0.07 -3.5%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.68 CAD 0.74 -CAD 0.06 -8.1%
Stornoway Diamond CAD 0.58 CAD 0.62 -CAD 0.04 -6.5%
True North Gems CAD 0.09 CAD 0.10 -CAD 0.01 -10.0%
UK (pence)
African Diamonds 29.05 32.86 -3.8 -11.6%
Anglo American 2,271.50 2,545.00 -273.5 -10.7%
BHP Billiton 1,694.00 1,920.00 -226.0 -11.8%
Firestone Diamonds 32.50 35.09 -2.6 -7.4%
Gem Diamonds 197.80 219.00 -21.2 -9.7%
Gemfields 4.75 5.00 -0.3 -5.0%
Mwana Africa 7.28 8.30 -1.0 -12.3%
Namakwa Diamonds 41.00 47.00 -6.0 -12.8%
Petra Diamonds 67.50 69.50 -2.0 -2.9%
Rio Tinto plc 2,904.50 3,275.44 -370.9 -11.3%
Stellar Diamonds 11.50 12.00 -0.5 -4.2%

RAPAPORT NEWS SERVICE | JULY 9, 2010 www.rapaport.com | news@rapaport.com

Retail & Wholesale General Stats EconWatch India Jobs

RapUp July 9, 2010

Trading activity slows, demand for rough eases and polished prices soften slightly as U.S. summer vacations begin. De Beers Diamdel unit sells 95% of 157 lots auctioned online in 2Q and says competition through 1H remained most intense for rough in 2 ct-plus sizes. SpendingPulse reports 10% rise in June jewelry spending despite 3% decline in luxury sales. Gitanjali plans 500 new stores in Asia Pacific and remains cautious about U.S. Safdico to open distribution office in Israel. Israel’s June polished exports +149% to $458m, rough imports +42% to $389m. Diamond Council of S. Africa CEO Braen Migogo resigns.

RapNet Data: July 9, 2010

Diamonds 711,955

Value $4,519,743,249

Carats 795,017

Average Discount -31.21%

Get Current Price List | Subscribe to Rapaport | Join RapNet

ANNOUNCEMENTS

July
25-28
Sun-Wed
Rapaport at JA New York Summer Show

Javits Convention Center
Booth 2300
New York, NY USA

Rapaport Contact: Sherri Hendricks
+1-702-893-9400 or email sherri.hendricks@diamonds.net.

QUOTE OF THE WEEK:
As the past year has demonstrated, we will not be assembling in St. Petersburg simply to pay lip service to the values upon which the [World Diamond Council] was founded. The ongoing situation in countries like Zimbabwe and the dedication of our industry to operate in a transparent and principled manner means that there are burning issues on the table, which we will discuss and for which we will formulate strategies.

Eli Izhakoff | World Diamond Council president

Careers@Rapaport

The Rapaport Group is growing rapidly. If you want to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants, and entry level positions for our offices in New York, Antwerp, Mumbai, Dubai, and Shanghai. To get on the fast track, email your resume to careers@rapaport.com.

INDUSTRY

Zimbabwe Update

The president of Zimbabwe, Robert Mugabe, urged businesses from China to invest in developing infrastructure in his countrys various product sectors to help them develop more rapidly and turn Zimbabwes fortunes around. Targeted sectors included diamonds, chrome, iron and copper, gold and emeralds. Chinas deputy minister of commerce, Jiang Zengwei, said that his country would continue to support Zimbabwe in developing its economy.

But the International Monetary Fund concluded that Zimbabwes mining wealth would not save the country from its debt. Instead of throwing more investment into a black hole, Zimbabwe must instead focus on sound policies and debt relief if it ever wants to achieve growth sustainability, the report noted. The country has stockpiled nearly $2 billion in rough diamonds, while its national external debt is $4.6 billion or 104 percent of its gross domestic product (GDP). Debt relief would immediately boost Zimbabwes net wealth by reducing its obligations and increasing the value of its mining wealth through a reduction in the countrys risk.

At the present time, the Kimberley Process (KP) ban on rough exports is in place for Zimbabwe, but its finance minister, Tendai Biti, said that such a ban punishes ordinary citizens. He added that Marange diamonds were not blood diamonds because Zimbabwe is not engaged in a conflict. Biti did concede that the country must address allegations of forced diamond-mining labor, human rights abuses and a Marange ownership claim leveled by African Consolidated Resources and clear up inconsistencies in its rough export records.

The countrys Cabinet, meanwhile, clarified its stand on Marange exports following claims made to the press by mines minister Obert Mpofu, who signaled that rough diamond exports had been approved. But the Cabinet, in fact, had not approved Chiadzwa diamond sales or exports and referred the issued to a Cabinet committee on Chiadzwa.

A Harare judge denied Centre for Research and Development (CRD) director Farai Maguwu bail once again. Maguwu, who was jailed more than one month ago, is charged with allegedly giving what the state determined to be falsified documents to KP monitor Abbey Chikane. Police investigator Henry Dowa claimed that Chikane was a key witness in the case, but remains "very mobile" and is difficult to reach for comment. Dowa also claimed they needed time to access a laptop found at Maguwus house.

Maguwus attorney, Beatrice Mtetwa, told the court that Chikanes whereabouts have been well known and that Dowa had not, in fact, been investigating the case as he claimed. Mtetwa said that all relevant documents in question remained with the court, that no further evidence was required and therefore, her client must be released on bail.

Amnesty International joined a chorus of nongovernmental organizations (NGOs) and diamond industry groups calling for Maguwus immediate and unconditional release.

Diamdel Observes Strong Demand

Diamdels online auction channel activity was strong during the second quarter, according to De Beers. The company offered 157 lots spanning goods in the -3 grainer, 3 to 8 grainer and 2- to 15-carat size ranges, with 95 percent of these lots being sold. Broad-based participation was evident across all customer groups and more than two-thirds of the lots went to small- to medium-sized specialist manufacturers.

Rapaport Weekly Broadcast

WATCH NOW: Is your brand ready for mobile e-commerce? The National Retail Federation and Forrester Research say that should be your next strategy. Jewelry designer Ivanka Trump heavily promoted her line at London Jewelers in East Hampton, New York, using social media. The Birmingham Assay Office in the U.K. introduced The Eternal Borgezie Diamond Stiletto shoes that were handcrafted from solid gold, then lavishly encrusted with 2,200 brilliant-cut diamonds, totaling 30 carats.

U.S. Recession Lingers

Economic signs are pointing to a double-dip recession in the U.S. as indicators slip further. The country continues to reflect a high unemployment rate and chronic underemployment, which is negatively impacting spending and an already depressed housing market. The National Bureau of Economic Research (NBER), which officially declares the beginnings and ends of recessions, has not yet identified the end of what is being labeled the "Great Recession" that started in December 2007. Some economists have said the recession ended one year ago based only upon gross domestic product (GDP) figures. But NBER reviews the data that comprise the nations GDP, plus personal incomes, employment and industrial activity.

RETAIL & WHOLESALE

June Retail Sales Improve

The July 4th holiday weekend in the U.S. helped boost retail sales at the chain stores this past week, according to comparable store data released by the International Council of Shopping Centers (ICSC) and Goldman Sachs. Chain-store sales rose 3.9 percent compared with one year ago, while they were up by 1 percent against the previous week. For the month of June, ICSC determined that chain-store sales rose 3 percent, with luxury stores gaining by 8.8 percent and department store sales improving by 5.9 percent.

MasterCard Advisors’ SpendingPulse report determined that during June, consumer spending continued a trend of slow to modest overall growth. But jewelry spending data suggested a 10.1 percent increase, even though luxury sales as a whole fell 3.9 percent. Both categories experienced strong declines one year ago.

Gitanjali Expands in India

Gitanjali Gems expects to grow its retail footprint across India, China and the Middle East by opening 500 new stores by March 2011. The retailer is keeping an eye on the struggling U.S. economy, but for now, its expansion plans remain closer to home in the robust Asia-Pacific region. Middle- and upper-class consumers in India continue to experience income gains and the demand for diamonds and gold continues to improve.

Safdico to Open Office in Israel

Safdico will open an office in the Israel Diamond Exchange (IDE) that will be used as a sales and distribution location for the purchase and sale of rough and polished diamonds. Safdico has offices and cutting facilities in Geneva, Johannesburg, Gaborone, Antwerp and New York.

Rio Tinto Reaches Out to Gem Investors

Rio Tinto published Rare and Collectable to coincide with the 26th Argyle pink diamonds tender. The publication provides insight for affluent investors as to the rarity of Argyle pink diamonds, which results in strong price appreciation. Poor economic fundamentals are currently providing a catalyst for investment demand, specifically for rare gems.

U.K. Warns of Glass-Filled Rubies

AnchorCert gemologists at the Birmingham Assay Office in the U.K. have observed a large number of glass-filled rubies being submitted in recent weeks. Many of the rubies in question were bought in the good faith that they were both natural and untreated.

Senior gemologist Anu Manchanda said, "This type of treatment has been around for a few years now, but we seem to have suddenly seen an unusually high number." A trained jeweler can easily detect these treatments using tenfold magnification that will reveal bubbles, blue flashes of light and evident fractures running up to the surface under the reflected light.

GENERAL

Passion, Confidence, Values Land Todays Jobs

WATCH NOW: Gemological Institute of America (GIA) president Donna Baker describes the key issues potential job seekers should consider in building their career. GIAs career fair founder, Kathryn Kimmel (pictured), provides insight for job seekers using GIAs resources. Attendees Daniel Canivet and Elizabeth Nomberg shared how the event and speakers impressed them during the early stage of their own careers.

Sesay Backs Taylor at The Hague

Issa Sesay served as a surprise witness for the defense in the war crimes case being conducted against Charles Taylor at The Hague. Sesay is already serving 52 years in prison for involvement in the blood diamond war, but said that he had no knowledge of other rebel leaders from Sierra Leone giving Taylor diamonds in exchange for arms. Taylor has consistently denied possessing any diamonds and has pled not guilty to the 11 counts of war crimes leveled against him. Prosecutors have summoned model Naomi Campbell to the stand to testify on whether Taylor gave her a rough diamond in 1997.

Migogo to Leave Diamond Council

Braen Migogo will be leaving as head of the Diamond Council of South Africa (DCSA). Migogo served for more than two years and helped further the industry’s global competitiveness, sustainability and transformation. The council was re-established through the amalgamation of the Master Diamond Cutters Association and the Rough Diamond Dealers Association. A replacement for Migogo has not yet been announced.

STATS

Israel June Exports

June $Mil. Chng. YTD $Mil. Chng.
Polished Exports $458 149% $3,008 88%
Polished Imports $389 56% $1,880 104%
Net Exports $69 $1,128 118%

Rough Imports $356 42% $1,820 113%
Rough Exports $315 48% $1,620 98%
Net Imports $41 $200 223%

Net Diam Acct. $27 $1,328 130%

ECONWATCH

For the week ending July 8, 2010:

July 8 July 1 Chng.
$1 = Euro 0.789 0.811 -0.022
$1 = Rupee 46.88 46.63 0.3
$1 = Israel Shekel 3.87 3.89 -0.02
$1 = Rand 7.58 7.75 -0.17
$1 = Canadian Dollar 1.04 1.06 -0.02

Precious Metals
Gold $1,198.80 $1,197.30 $1.50
Platinum $1,519.00 $1,502.00 $17.00

Stock Indexes Chng.
BSE 17,651.73 17,509.33 142.40 0.8%
Dow Jones 10,138.92 9,732.53 406.39 4.2%
FTSE 5,105.45 4,805.75 299.70 6.2%
Hang Seng 20,050.56 20,128.99 -78.43 -0.4%
S&P 500 1,070.25 1,027.37 42.88 4.2%
Yahoo! Jewelry 784.72 766.69 18.03 2.4%

USA
Birks & Mayors $1.40 $1.10 $0.30 27.3%
Blue Nile $48.67 $46.27 $2.40 5.2%
Charles & Colvard $2.64 $2.64 $0.00 0.0%
DGSE Companies $3.20 $3.20 $0.00 0.0%
Fuqi Intl. $6.52 $6.20 $0.32 5.2%
JCPenney $23.23 $21.43 $1.80 8.4%
Kohls $47.89 $48.72 -$0.83 -1.7%
LJ Intl. $2.62 $2.57 $0.05 1.9%
Macys $18.40 $18.30 $0.10 0.5%
Man Sang $1.90 $1.85 $0.05 2.7%
Movado Group $10.32 $10.81 -$0.49 -4.5%
Nordstrom $33.63 $32.78 $0.85 2.6%
Saks $7.74 $7.53 $0.21 2.8%
Signet $28.45 $27.59 $0.86 3.1%
Sothebys $24.25 $22.75 $1.50 6.6%
Tiffany $38.88 $38.12 $0.76 2.0%
Walmart $49.13 $48.35 $0.78 1.6%
Zale $1.50 $1.55 -$0.05 -3.2%

EUROPE
Bulgari €6.12 €5.82 €0.30 5.2%
Bijou Brigitte €120.10 €119.55 €0.55 0.5%
Damiani €0.83 €0.86 -€0.03 -3.5%
LVMH €89.07 €85.20 €3.87 4.5%
PPR €100.80 €98.10 €2.70 2.8%
Richemont CHF 38.58 CHF 35.65 CHF 2.93 8.2%
Swatch Group CHF 304.10 CHF 294.20 CHF 9.90 3.4%
Theo Fennell (pence) 41.73 38.22 3.51 9.2%

INDIA (rupee)
Classic Diamond 20.95 20.80 0.15 0.7%
Gitanjali Gems 139.55 125.30 14.25 11.4%
Goldiam Intl. 46.65 44.50 2.15 4.8%
Rajesh Exports 82.85 82.15 0.70 0.9%
Ren. Jewellery 77.65 74.75 2.90 3.9%
Su-Raj Diamonds 54.25 50.95 3.30 6.5%
Titan 2,481.60 2,348.90 132.70 5.6%
Zodiac JRD 28.00 26.70 1.30 4.9%
Suashish Diamonds 171.75 175.00 -3.25 -1.9%

NEW ZEALAND
Michael Hill NZD 0.68 NZD 0.68 NZD 0.00 0.0%

MINING STOCKS
CANADA
Harry Winston CAD 14.39 CAD 13.09 CAD 1.30 9.9%
Lucara Diamond CAD 0.67 CAD 0.82 -CAD 0.15 -18.3%
Mountain Province CAD 2.73 CAD 2.73 CAD 0.00 0.0%
Peregrine Diamonds CAD 1.70 CAD 1.92 -CAD 0.22 -11.5%
Rockwell Diamonds CAD 0.07 CAD 0.07 CAD 0.00 0.0%
Shore Gold CAD 0.68 CAD 0.68 CAD 0.00 0.0%
Stornoway Diamond CAD 0.60 CAD 0.58 CAD 0.02 3.4%
True North Gems CAD 0.09 CAD 0.09 CAD 0.00 0.0%
UK (pence)
African Diamonds 28.50 29.05 -0.6 -1.9%
Anglo American 2,412.00 2,271.50 140.5 6.2%
BHP Billiton 1,819.00 1,694.00 125.0 7.4%
Firestone Diamonds 33.00 32.50 0.5 1.5%
Gem Diamonds 220.00 197.80 22.2 11.2%
Gemfields 4.75 4.75 0.0 0.0%
Mwana Africa 7.99 7.28 0.7 9.8%
Namakwa Diamonds 41.00 41.00 0.0 0.0%
Petra Diamonds 64.00 67.50 -3.5 -5.2%
Rio Tinto plc 3,073.50 2,904.50 169.0 5.8%
Stellar Diamonds 11.50 11.50 0.0 0.0%

INDIA MARKET REPORT

Polished and rough trading activity

POLISHED: Local markets are slow with activity reported for lower quality goods. Signs point to sellers softening on prices.