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The Blue, a 13.22 carat diamond the largest flawless vivid blue diamond yet found, which is estimated to sell between 21,000,000 to 25,000,000 US Dollar, during a preview at Christie's, in Geneva, Switzerland, Friday, May 9, 2014. (Martial Trezzini/AP)
The Blue, a 13.22 carat diamond the largest flawless vivid blue diamond yet found, which is estimated to sell between 21,000,000 to 25,000,000 US Dollar, during a preview at Christie's, in Geneva, Switzerland, Friday, May 9, 2014. (Martial Trezzini/AP)

Research Report

Why this is an opportune time to buy Canadian diamond stocks Add to ...

Globe editors have posted this research report with permission of Dundee Capital Markets. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here. The following is excerpted from the report:

We are initiating coverage of Canadian diamond developers Mountain Province Diamond Corp. and Stornoway Diamond Corp, as well as Canadian diamond explorers Kennady Diamonds, North Arrow Minerals and Peregrine Diamonds.

Diamond Prices on the Rise. Diamond prices have risen steadily over the past 2-years on increased global demand driven by growth in China and India and the economic recovery in the United States. Demand growth is expected to continue in line with the global economy while diamond supply remains limited and set to decrease in the medium and longer term.

Now is an opportune time to be looking at Canadian diamond players. With the recent consolidation of two mines by Dominion Diamond and the announcement of a $923-million project financing for Stornoway Diamond, attention is turning back to the diamond space. Prices for diamond equities have not kept up with diamond price increases.

Best in class Developers & Explorers Offer Best Upside Potential. In this report, we have focused on TSX-listed diamond companies that are bringing new mines into production and the top explorer developers in Canada as we believe they offer the best risk vs. reward with exposure to improving diamond prices, development milestones and future cash fl ow. We begin our diamond coverage universe with five names that we believe stand out for quality and upside potential within our diamond equity investment framework.

Read the full report here.

Read other research reports here.

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