Diamond Rose chief executive Pnina Feldman describes her quest for diamonds as a labour of love. Her latest deal has seen BHP farm into the prospective Upper Beta Creek project.
One-time headmistress, sister of Joseph Gutnick and executive director of junior explorer Diamond Rose, Pnina Feldman, could hardly be accused of not having strength of spirit.
Like many diamond explorers, she’s a risk-taker. Take Diamond Rose’s cash position – it’s skirting dangerously close to running dry.
According to Feldman, the New South Wales-based company has less than half a million dollars in the bank, but she’s willing to take the risk of pushing ahead with exploration this quarter in the hope that her field team turns up something special in the sparkler department.
“Considering how much money has been spent by other companies to find diamonds I think we’re doing pretty well.” Feldman said. “diamond Rose has spent $10 million over two years and we’ve been lucky in finding what we believe to be 21 (kimberlite pipes). Why wouldn’t we be lucky in the finding of diamonds?”
More than three years ago, Feldman was the toast of the mining industry. When Diamond Rose launched on the Australian Stock Exchange its fortunes soared – the 20c shares hit $1.75 on the first day of trading. Feldman made the Business Review Weekly rich list in 1997, which estimated her personal wealth at $80 million.
These days things aren’t looking so rosy. Diamond Rose’s shares are trading around 9c. but Feldman, the eternal optimist, believes the joint venture Diamond Rose recently struck with BHP over the Upper Beta Creek project in
Employing its Falcon technology, BHP has flown over Upper Beta Creek to try to pinpoint the exact location of the kimberlite pipes on the property. “We believe we are at the centre of a cluster and that companies like Striker Resources and what have you are on the periphery,” Feldman said.
Under the terms of the joint venture, BHP will manage and fund the Upper Beta Creek project through until bankable feasibility. After completion of a bankable feasibility study, Diamond Rose will contribute its equity share (50-50) of the project. An additional 9% of Upper Beta Creek can be earned by BHP upon the decision to develop a mine.
“I wasn’t particularly keen to do a deal with anybody unless I though it would be of benefit to the company because I am used to slugging it out,” Feldman said. “But the deal alleviates the whole worry of me having to (fully) finance the project.”
The issue of funding bears heavily on Feldman’s mind. Her private companies, mainly through Vageta Pty Ltd, hold about 51% of Diamond Rose.
“It (Vageta) is a privately financed company, but that’s my husband’s department,” Feldman said. “Whatever I’ve managed to finance and whatever I’ve managed to achieve in Diamond Rose initially and the takeover of Striker was due to his contacts. I don’t know these people.”
Diamond Rose will again rely on the kindness of strangers when it draws on a $4 million convertible note facility provided by Vageta. According to Diamond Rose’s annual report this could leas to an increased working capital of up to $28 million when coupled with the exercise of all attaching options.
The company’s overseas backers in the past have included a George Soros’ investment fund, Mountain Side Holding, which still holds 1.45% stake in Diamond Rose, and members of the
Diamond Rose’s falling out with Striker in 1999 is still a sore point for Feldman. “It (the Striker deal) proved to be a disappointment and a distraction rather than an enhancement,” she said. “I didn’t like the way things progressed with Striker once I got the money fro them.
“Things with Striker are okay now. It’s like family, it’s better when you’re separate.”
Working in the predominantly male world of mining has not worn down this mother of 11. “It’s being a CEO which is the challenge,” Feldman said. “I haven’t found being female inhibiting in any way. One thing I’ve had to learn is that business is business and anything goes.”
