Doug Ashbury
Northern News Services

Yellowknife (Jan 12/00) - Improved world markets has seen the value of diamonds sampled from the Diavik property also increase in value, Aber Resources revealed.

"The Diavik bulk sample diamonds were recently revalued in the current Antwerp market and were found to have risen in value by about 10 per cent since the previous valuation in June 1998," Aber said in its recently released third-quarter report.

Aber owns 40 per cent of the Diavik project and retains the right to market its share of diamonds from the proposed mine.

Aber president and CEO, Robert Gannicott, said the increase in value is a direct result of the improved diamond market.

The U.S. retail market is "extremely strong," said Gannicott, adding that American jewellers had record sales in the past year.

The spectacular economic expansion in the U.S., coupled with Americans' traditional affectation for diamonds, has made them current consumers of more than 50 per cent of the world's production, Aber said.

Although economic growth south of the border may not continue at its current rate, a soft landing is widely expected. Japan and other Asian economies are showing signs of recovery and China is also emerging as diamond market, Aber said.

Despite the higher valuation for the Diavik bulk sample, Gannicott cautioned against simply adding 10 per cent to current Diavik resource estimates.

Markets change and those diamonds have not yet been mined, he said.

Last April, the Diavik resource -- based on 21,322 carats taken from four kimberlite pipes -- was estimated at 132.5 million carats (3.6 carats per tonne of ore) worth $82.35 per carat. All things remaining equal, the April figures translate into an $11-billion resource.

On Ekati diamond sales, Aber said diamonds from the BHP mine sold for prices substantially higher than predicted from bulk samples. "We may expect the same from the Diavik production," Aber said.

On De Beers' sales, Aber said the world's largest diamond marketer is expected to report rough diamond sales of more than $7.4 billion and to continue to draw down their stockpile.

Aber anticipates permitting of the Diavik project will continue through first- quarter 2000 with a production decision towards the end of first quarter. Last month, the project was given Ministry of Environment approval. Construction is expected to begin this winter with production scheduled for early 2003.

For the nine months ended Oct. 31, Aber reports an unaudited $1.2-million loss compared to an $886,113 profit for the same period a year earlier.

Driving the company's bottom line into the red was the $3.5-million cost of relocating company headquarters to Toronto from Vancouver.

Aber's stock was up 15 cents at $9.10 in Monday morning trading.