Giving Credit to De Beers L O

EDITORIAL

March 3, 2009 Vol. 24 No. 546 D

A By Chaim Even-Zohar C I o n A f i d e M n t i a Giving Credit to De Beers l O

S For as long as I can remember, the publication of the De Beers annual results has always represented e an occasion for considerable pride and glory in which the chairman, flanked by the managing director, r v finance director and (not always) the DTC director, would face analysts and journalists in televised press N i c conferences linking London, Johannesburg and Cape Town. e Questions were often hard and biting, but the good humored De Beers management generally made

f sincere attempts to give straight and as-complete-as-possible answers. D o

r This is the first year in recent history that upon releasing the results C O N T E N T S E De Beers relied on Anglo American Corporation to face the analysts’ x music. De Beers itself only uploaded a video message in which its e 4 Corners of the Globe...... 5249 I

c managing director, Gareth Penny, gave a passionate presentation of Digging the Dirt...... 53 N u the “family of companies’” activities. Off the Shelf...... 55 t Briefly Noted...... 59 i The corporate PR department sent out a minimal press release. v Movers and Shakers...... 61 T e Why minimal? Because it has not mentioned that shareholders have s been tasked with coming up with a $0.5 billion loan for 2009 on top of E i

n last year’s $300 million loan. Nor did De Beers disclose the amounts and maturity dates of its credit facilities. L t h The press release did say, however, that the company has a $3.55 e L billion interest-bearing debt. Why stress “interest-bearing”” Because this D debt does not include the now additional $800 million, which has a I i a two-year interest-free grace period before market rates will be ap- G m plied. o Last year’s DTC sales were $5.93 billion and, according to our esti- n

E mates, they are likely to be only about US $3 billion this year. Gross d profits may come to 20 percent, before deduction of expenses and a

N overhead. Net profits will be minimal. Will profits be sufficient to service n

d the mounting debts? Can additional leveraging be avoided? D C

i All in One Boat a I don’t know whether it’s scary or comforting to see that De Beers is m facing the same struggles as many other diamond companies. It is

E The black and white diamond o scary because knowing that producers are financially stable and ro-

n mask (above) by designer Katia

d bust boosts confidence in the market. Though De Beers is not a Faber was one of the winning designs in the DTC Shining Light B

J “basket case,” we are not sure that DTC Managing Director Varda e Shine would even consider accepting De Beers as a potential Awards Southern Africa 2009 w Collection. The mask is set with

R Sightholder based on its financials. Luckily, De Beers owns the goods. e 18 karat white gold with 573 They were theirs to begin with. l

r white diamonds weighing 24.80 y I As discussed in a detailed article in this week’s Diamond Intelli- cts and 544 black diamonds E B gence Briefs (available to subscribers via IDEX Online), De Beers will weighing 12.45 cts and spon- u need to renew maturing credit facilities. A $0.5 billion facility needs to sored by Bellagio Jewellers. s F

i be renewed in April 2009; a further $1.5 billion is due in March 2010; n e S s s DIAMOND INTELLIGENCE BRIEFS 5247 EDITORIAL

and a hefty $2.3 billion needs to be renewed in 2012 and Selling of Inventory beyond. In other words, in the next 12 months or so, De Beers It is clear that the financial pressures are impacting many, needs to repay some $2 billion in debt or obtain extension in if not all, of De Beers’ present actions. In addition to making 25 facilities. True, not all facilities have been fully drawn at this percent of the De Beers London employees redundant by point. But there would have been no call on shareholders to April 1, 2009 and the retrenchments on the mining and sorting bring money from home if De Beers didn’t intend levels, the DTC will now be “supporting the reduction to fully utilize its credit facilities. in inventory levels in the first half of 2009.” In plain This week’s temporary closing of all English, this means selling off those goods that Debswana mines will not give De Beers much Sightholders are not taking. We haven’t seen any respite. The managing director of Debswana is evidence yet of goods being sold to non-Sightholders, now calling for revising the company’s cash flow which is something that De Beers would not be able and dividend policy. Debswana wants to to do without permission from the European Commis- “hoard” money at the corporate level to have a sion. However, clients are now encouraged to make financial cushion for future contingencies rather Varda Shine offers on additional parcels outside their regular allo- than immediately turn the funds to the share- cations. De Beers wants to sell rough but not at any holders as dividend payments, as has been the time-honored price. The industry still expects further rough price reductions. practice. This is certainly an unexpected, additional blow to The DTC sales director, Mahiar Borhanjoo, however, seems De Beers. to expect decreases in polished prices as well. He told clients at a presentation during the Sight that polished prices may fall More Cash Injections Needed further. In the U.S., he says, diamond jewelry sales were down Can De Beers raise funds in the present credit crunch seven percent in 2008, and they will decline an additional based on its balance sheet and commercial prospects? How eight percent in 2009. The decline of the U.S. market in the last many more cash injections will be needed by the company in quarter of 2008 was 22 percent, reaching a plateau that will 2009? De Beers isn’t talking. Unquestionably, it was a major remain throughout 2009. (The detailed global market situation mistake to avoid questions at such a critical time. (2008 pipeline) will be published shortly on our website.) The The Anglo American finance director, René Médori, as- above mentioned figures are mainly noted in the context of sured analysts that “as of today De Beers might not need fur- De Beers’ prospects of 2009. ther cash injection from all shareholders” and that “as of to- Will De Beers find the funds to sustain its pared-down day, the three shareholders are confident that De Beers’ man- operations? South African journalist Jim Jones reminds us of agement will be able to go through this downturn without fur- how the fortunes of De Beers have turned. “In the ‘good old ther cash injection.” The words “as of today” indicate skillful days,’ Anglo and De Beers – run by an Oppenheimer hedging. Tomorrow may be a different day. It will be. It must patriarch – would call in the group’s bankers, tell them what be. was needed and the terms. Today, the bankers are calling the Anyone following the financial press this week cannot help shots, and the squeeze is on…” but be quite shocked by comments on De Beers. One South Now De Beers is in the same boat as its clients in trying to African journalist actually wonders what the market value of convince bankers that our business is worthy of their credit. De Beers would be today; somehow implying that it would be Welcome to the club. u merely a fraction of its current debt level. Of course, no valua- tion of any company (or bank for that matter) is realistic to- De Beers Diamonds day, therefore, not too much importance should be given to this kind of speculation. Unless, of course, some shareholders of De Beers are in the market for either buying or selling shares, and yes, we believe they are. The chances that shareholding in De Beers and in Debswana will be different a year from now are greater than the chances that they will stay the same. The shareholding may be related to further constraints such as the debts of either the De Beers mother company, DB Investments, and those of the Oppenheimer family company, Central Holdings, which were incurred to finance the privatiza- tion of De Beers in 2001. These are, of course, a private matter – but they shouldn’t be ignored.

5248 DIAMOND INTELLIGENCE BRIEFS 4 CORNERS OF THE GLOBE

I N D I A Z I M B A B W E Koh-i-Noor: Renewed Calls for A New Report Sheds More Light on Return to India Mugabe’s Diamond Horrors The on again, off again calls for the United Kingdom to A report titled ‘Zimbabwe, Diamonds and the Wrong return the Koh-i-Noor diamond to India got a boost this week Side of History’ released by Partnership Africa Canada from a surprising direction, the family of Mahatma Gandhi. (PAC) describes the role diamonds play in the Zimbab- Gandhi’s great-grandson, 49 year old Tushar Gandhi, has wean economy and how they are used in the country’s urged Indian authorities to step up its efforts to return the Koh-i- “increasingly repressive governance.” Noor, as well as other Indian trea- Following a report it published in January, PAC is detail- sures, back to India. “The Koh-i- ing “growing evidence” of rough diamond smuggling out Noor diamond is something that from the country, the growing involvement of the army in rightfully belongs to India,” Gandhi the local diamond industry and the negative effect it has told The Times. on the global diamond trade. The Koh-i-Noor is a 105 carat PAC concludes that the Kim- diamond that was mined in India, berley Process, the international and was owned by various rulers diamond regulatory body creat- until the East India Company took ed to end conflict diamonds, “is possession of it. The diamond was unwilling and unable to deal presented to Queen Victoria in 1877 when she was declared with the problem.” Empress of India. The Koh-i-Noor was later set into the crown of The 16-page report opens Queen Elizabeth, wife of King George VI. with an overview of Zimbabwe, “If the jewels of Windsor were held by an Arab sheikh, then its cholera epidemic and gov- Britain wouldn’t really like that. I’d love to see it back in India,” ernment power struggles with the opposition party. Gandhi said. “Returning it would be atonement for the colonial It goes on to state that, “Zimbabwe is no longer able to past.” manage its diamond industry in a way that is consistent with respect for human rights, or in accordance with Kim- Reserve Bank of India Task Force berley Process minimum standards.” Meets with Industry Organizations Throughout the report, PAC criticizes the Kimberley Pro- The task force appointed by the Reserve Bank of India (RBI) cess for “consistently” failing to say or do anything that to help the diamond industry met with two Surat-based makes “the slightest difference with respect to Zimbabwe.” manufacturing associations. “When regulators fail to regulate, systems collapse and The Surat Diamond Association (SDA) and the Diamond the people they are designed to protect suffer,” PAC writes. Workers Association (DWA), laid out for the task force the issues PAC claims that Zimbabwean diamonds are “no longer they are confronting, making a number of suggestion. Ac- ‘clean.’ They bear the blood of Zimbabweans, shot down cording to SDA Joint Secretary Rohit Mehta, liquidity in the by their own government. They are produced from mines industry is very low, suggesting that banks provide low interest that benefit political and military gangsters, and they are loans to manufacturing unit, Express News Service reported. smuggled out of the country by the bucketload.” Babu Jirwala, president of DWA, went a step further PAC is repeatedly calling on the Kimberley Process to suggesting that banks provide widen its scope from technical supervision of the global interest free educational loans. trade in rough diamonds, to also focusing on human rights. “The diamond polishers had taken Zimbabwe is a key test case for this extended mandate. housing loan from the banks and Kimberley Process certification is granted by gov- haven’t been able to pay the ernment entities, usually customs officials. If a government installments for the last three manages its diamond riches violently, as Zimbabwe is ac- months. The banks should reduce cused of, but then exports the mined diamonds according the interest rates and relaxation should be given on the to Kimberley Process regulations, then, judged from a tech- installments," he told the task force. nical perspective, the exports are “kosher.” However, PAC Another idea raised by Jirwala is that the banks provide low claims, if diamonds are mined violently, there is nothing interest loans to diamond polishers that want to start a small kosher about it. business.

5249 DIAMOND INTELLIGENCE BRIEFS 4 CORNERS OF THE GLOBE

U N I T E D S T A T E S U.S. Net Rough Diamond Imports U.S. Polished Diamond Imports $361.8 Million in 2008 Rises 5% in 2008 While U.S. rough diamond trade plunged 73.7 percent The United States dramitically cut its polished diamond in December, annual trade actually increased 25.1 per- imports in December, however, the fall did not prevent annual cent to $1.141 billon from $912 million in 2007. Net trade in figures from showing that the U.S. increased its purchases of December was a mere $11.9 million. polish throughout the year. Some 725,423 carats, with a declared value of $751.55 December imports fell 25.2 percent to $966.7 million, million were imported into the U.S. in 2008, according to bringing in just 602,047 carats at a high average value of figures released by the International Trade Commission. $1,605.61 per carat (p/c). Exports of $805.1 million of polished Imports averaged $1,036 per carat (p/c). diamonds left in the U.S., a net of $161.5 million worth of polished South Africa was the leading source by value ($295.98 goods, a 43.2 percent decline in net imports. million) and Israel was the leading source by volume On an annual basis, the U.S. imported $18.99 billion worth of (120,034 carats). Rough diamond exports of 1.98 mil- U.S. Polished Diamond Imports by Carat lion carats, worth $389.73 million, meant 2008 vs 2007 vs Net Trade 2008 2007 2008 Net trade that despite the increase in the value of 2,000,000 trade, by volume the U.S. exported more 1,500,000 goods than it imported, shipping out low 1,000,000 cost goods worth an average of $197 p/c. 500,000 Net December trade shows that by 0 volume, exports exceeded imports by -500,000 -1,000,000 84.1 percent. U.S. traders imported 70,031 Jan. Feb. March April May June July August Sept. Oct. Nov. Dec. carats with a stated value of $29.19 million, an average of $416.83 per carat (p/c). This amount polished diamonds in 2008, a 4.8 percent increase over 2007, was far below the annual average, reflecting the falling despite a clear decline in imports since the start of the eco- prices of rough diamonds at the end of the year. nomic crisis in September. In terms of volume, annual imports Practically all of the goods imported in December, tumbled 23.9 percent to 12,916,153 carats, bringing average $22.67 million, came from Africa. More than half of them, imports to $1,470 p/c. $15.56 million, arrived from Angola, with the remainder By value, exports were about half (50.8 percent) the value coming from South Africa and Lesotho. of imports, but the volume of annual exports, 21.17 million ca- Exports in December totaled $17.29 million, averaging rats, exceeded imports by 64 percent, resulting in a negative only $121.38 p/c, indicating that traders kept the higher net trade. Exports of nearly 2 million carats in December were value stones and “moved” the cheaper goods. By value, more than triple the volume of imports. most of the goods ($10.2 million) were shipped to Belgium. It seems that local traders had large stocks of low value By volume, most goods (averaging less than $13 p/c) went goods that were exported during the year. Most of these goods, to Dubai. 15.47 million carats, were shipped to Israel and Belgium. Israel was the leading supplier of polished U.S. Rough Diamond Imports by US$ value diamonds to the U.S., shipping 2.7 million 2008 vs 2007 carats worth $9.38 billion and averaging 2007 2008 120,000,000 $3,449 p/c. However, 12.6 million carats were 100,000,000 shipped to Israel during the year, leaving a

80,000,000 negative net trade of 9.9 million carts. India was the second leading supplier, 70,000,000 shipping a net of 4.27 million carats worth 60,000,000 $2.19 billion, at an average $512.73 p/c. 40,000,000 Belgium followed with a net supply of

20,000,000 $760 million on a negative volume trade of Jan. Feb. March April May June July August Sept. Oct. Nov. Dec. 5.6 million carats.

DIAMOND INTELLIGENCE BRIEFS 5250 4 CORNERS OF THE GLOBE

I S R A E L U. K. IDI Launches Strategic Marketing Initiative New Diamond Industry The Israeli Diamond Institute Group of Companies (IDI) has launched the first stage Umbrella Organization of an ambitious strategic initiative, geared to providing significant marketing support Meets in London to Israeli diamond manufacturers and exporters, the group said on Sunday. The second meeting of a new dia- According to IDI Chairman Moti Ganz, the program was created in response to mond industry organization that will the international economic crisis and its effect on the manage generic marketing was held in diamond industry around the world. London. The meeting focused on sugges- Ganz said that IDI’s role was to lead the industry’s market- tions about how the organization should ing efforts. “We want to push forward aggressively and to be operated, financed and governed. introduce the Israeli industry to new and creative marketing The meeting, widen from 17 partici- tools. We are now launching the first stage and additional pants at the initial meeting at St Peters- elements of the program will be announced later in the burg to more than 60, discussed the op- year.” Ganz said he was optimistic that the program would portunity of a new diamond industry effectively promote the Israeli diamond industry in organization to engage in category mar- Moti international markets and that it would be greeted with Ganz keting and advocacy of major industry enthusiasm by the Israeli industry. issues, the group said in a release Wed- The first stage of the initiative includes the following elements: nesday morning. u Israeli Diamond Industry News Service – IDI will write and distribute press releases “Participants in the London meeting about new developments at individual diamond companies as a free service. This focused on the results of research on the service will enable Israeli diamond companies to bring their news to the attention role similar organizations effectively play of the diamond and jewelry trade media and will serve the trade media’s ongoing in other industries, the business case for need for information. category marketing and related govern- u Internet Marketing and E-Commerce – IDI will organize a series of online seminars ance and funding issues,” the release for Israeli diamantaires to instruct them on the possibilities of Internet marketing states. and e-commerce. Moreover, IDI will provide free consulting services for diaman- “It was agreed to form a working taires who wish to create or improve their websites. group including leading diamond pro- u Social Network Marketing – IDI will assist diamantaires in taking advantage of the ducers, the existing industry organizations marketing opportunities of social networks on the Internet. IDMA, WFDB and GJEPC, and leading u Trade Show Support – IDI is expanding its Israeli Diamond Pavilions at major trade representatives from the diamond cut- shows to include meeting space where non-exhibiting Israeli diamantaires will be ting and wholesale sector to further pur- able to network and meet clients. sue the concept and to communicate u VIP Service to Buyers – This service enables Israeli diamond companies to offer on progress to the broader industry.” buyers a great incentive to visit Israel. Foreign buyers will receive a free hotel stay After De Beers chose to relinquish its for every day they spend on the Israel Diamond Exchange trading floor, up to four custodian role, the miner decided to end nights. This service was initiated toward the end of 2008, and has already brought its heavy investment in generic advertis- dozens of buyers to Israel. ing in the U.S., calling on the industry to fill the gap. Alrosa’s President Sergey Vy- IDI Managing Director Eli Avidar said that he was certain that this program would bornov initiated the first meeting, and the have an important impact on the Israeli Diamond Industry. “It was clear to us that we proposed body is the outcome of that needed to act swiftly and creatively in order to boost marketing efforts. Additional meeting. The London meeting was host- stages of the program will be launched at Basel and JCK Las Vegas,” he stated. ed by BHP Billiton. In a presentation for Israeli traders titled ‘Lets Get Through it Together,’ Avidar said the marketing campaign effort has ten stages, most of which are confidential at this stage. The few details he was willing to disclose were that in addition to writing press releases and producing short YouTube videos for local traders, in the second stage the IDI will launch an aggressive marketing campaign as well as invite traders to promote their buying demands online on the IDI web site. The following stages will take place at the JCK show in Las Vegas in May, and other events. The tenth and final stage will take place November 25, 2009, Avidar said.

5251 DIAMOND INTELLIGENCE BRIEFS 4 CORNERS OF THE GLOBE

I R E L A N D S O U T H A F R I C A Element Six 50% Pay DTC Launches Southern Africa Cuts Raise Uproar Shining Light Diamond Design In an effort to cut costs, lab diamond The Diamond Trading Company (DTC) has launched a collection of diamond maker Element Six has decided that jewelry called the DTC Shining Light Awards Southern Africa 2009 Collection. some of its workers will work only every The Southern Africa collection consists of eight jewelry pieces by local South other week. The company has also cut African designers, five designs created and designed by Namibian designers and five their salaries by half, accoding to local designs created by Botswana design- press reports. The move has proved to ers. Together, the 18 piece collection The Winning design by Bhekithemba Ngema be unpopular, resulting in what was des- comprises the first ever DTC Southern cribed as “angry scenes.” Africa Shining Light Collection. Workers at Co Clare in Ireland were The objective of the DTC Shining reportedly “stunned” when they heard Light Awards has been to provide sup- from management about the new work port for the future of the South African schedule, the Independent reported. jewelry industry by helping to develop The salary cut affects about 200 technical and design skills of South employees. Because it does not include African designers, as well as an ethos sales personnel or senior management, for South African jewelry design. For the tensions ran high, with calls for man- first time, the competition was opened agement to accept pay cuts as well. to South Africa’s neighboring diamond Element Six is part of the De Beers producing countries, Namibia and Group and jointly owned with Umicore Botswana. Group. It posted revenues of $500 million Intrinsic to the competition are the in 2008. design workshops hosted by the DTC on a biennial basis in all three major centers of South Africa, and in Windhoek and Gaborone. At the design forums, Element Six Research students of jewelry design, established jewelers and experts in the field of design from around the world come together to network and increase their skills base. The DTC- sponsored workshops cover business and design related topics. The DTC provides five jewelry design schools with education grants in recognition of their commitment and dedication in the field of jewelry design as part of the program. The Overall Winner, designer Bhekithemba Ngema, created a ring using 18 karat yellow gold and 725 diamonds with a total carat weight of 16 carats, provided by sponsor and DTC Sightholder, Schachter & Namdar.

A U S T R A L I A Rio Tinto Offering Rare Blue Diamonds Tender Rio Tinto’s Argyle Diamond Mine will hold a closed tender of blue diamonds that includes single cuts, a number of matching pairs and a selection of smaller diamonds. In terms of quality, Rio Tinto defined the diamonds as “premium” and commercial diamonds. The blue diamonds, known as the ‘Once in a Blue Moon” collection, will be showcased in Perth, Hong Kong and Tokyo, prior to bids closing on April 8. “We are excited to showcase our first ever collection of precious blue and violet Argyle diamonds, sourced from several years of production at the mine,” Josephine Archer, sales and marketing manager for Argyle Pink Diamonds said. The Argyle diamond mine is known for its colored diamonds. While most are brownish in color, the mine also produces rare pink, red, violet and gray stones. Rio Tinto usually polishes these diamonds in-house and tenders them to traders and collectors.

DIAMOND INTELLIGENCE BRIEFS 5252 DIGGING THE DIRT

Sierra Leone RUF Commanders Convicted Snap Lake Of Crimes Against Humanity The Special Court for Sierra Leone has convicted three commanders of the Revolutionary United Front (RUF) for war crimes and crimes against humanity. The three financed their activities by trading in conflict diamonds. According to Global Witness, Issa Sesay, Morris Kallon and Augustine Gbao, were directly involved in a criminal enterprise with former Liberian president Charles Taylor to take control of the diamond fields in eastern Sierra Leone. After taking control of the mines, the RUF forced kid- napped civilians to dig for diamonds, which its commanders then traded for military and financial support. RUF is held responsible for the deaths of tens of thousands of fellow Sierra Leoneans. It became infamous for its signature Charles Taylor systematic amputation of victims’ limbs. Snap Lake Job Cuts Global Witness said it welcomes the conviction. “These verdicts are a chilling re- Continue minder of how the trade in diamonds and other natural resources has underwritten De Beers Canada has announced some of the worst war crimes of the past two decades,” said Global Witness cam- further job cuts at its diamond mines. paigner Mike Davis. Following the 105 jobs cut at Snap Lake in The organization took part in estab- December, De Beers is terminating ano- lishing and shaping the Kimberley Process ther 220 positions, Mining Weekly report- Certification Scheme, which was formed ed. This will reduce the Snap Lake staff by to curtail the trade in conflict diamonds about 20 percent. mined in areas of conflict and traded to The diamond miner will lay off 128 finance the continuation of the conflict. employees and 90 contractors at its Davis warned that natural resources Northwest Territories diamond mine, part continue to fuel conflict, pointing to eas- of a wider scale back De Beers is making tern Democratic Republic of Congo, Special Court for Sierra Leone court to meet weak demand from rough dia- house.jpg Credit: Copyright 2008 by The monds. “where he said armed groups are fin- Special Court for Sierra Leone ancing themselves through the trade in The group has already decreased minerals and committing atrocities production in Canada, Botswana and in against the civilian population.” South Africa. The company is also in the “Diamond mining continues to fin- process of firing about 10 percent of its ance rebel activities in northern Ivory work force in London. Coast, and the trade in illicit diamonds “This is a very difficult, but necessary …is increasing globally,” Davis claimed. business decision, as we respond to the “Governments and the diamond industry changing client demand for diamonds in must live up to their promise and make the short term,” De Beers Canada Pre- Kimberley Process controls more robust, if sident and CEO, Jim Gowans, said in a Members of the Sierra Leone Diamond statement. the scheme is to fulfill its mandate and Company alluvial diamond exploration curtail the threat of conflict diamonds.” team

Tahera Gets CCAA Extension Tahera Diamond Corporation received an extension to the stay period under the Companies’ Creditors Arrangement Act (CCAA), which was set to expire on February 27. The court extended it until March 6. The company said during the extension it will continue its efforts to complete a sale of its remaining assets in consultation with Caz Petroleum Inc., the company’s leading secured creditor. Jehrico Mine

5253 DIAMOND INTELLIGENCE BRIEFS DIGGING THE DIRT

Shtyrov: Alrosa to Post At Least Eight Diamond Manufactures $111.66 Million Net Profit Lay Off Workers Alrosa expects to end 2008 with a net The economic fallout is reaching all the way down to line workers in Africa’s dia- profit of Rub 4 billion ($111.66 million), mond producing countries, as miners and manufacturers are curtailing and some- according to unofficial reports. While times even closing their operations. According to a recent report, an estimated 1,800 most diamond producers scaled back people have lost their jobs in Botswana’s diamond mining and mining-related industry. mining operations to near zero at the The Botswana press reported that end of the year, Alrosa tried to maintain eight cutting and manufacturing com- its production, selling the output to the panies have retrenched 441 workers. state repository Gokhran. According to a report that appeared in According to an Itar-Tass report, Mmegi, the manufacturers are Diamonds Vyacheslav Shtyrov, the president of the Manufacturing Botswana, DDA of Bots- Republic of Sakha (Yakutia) where wana, Suashish Diamonds Botswana Alrosa mines most of its diamonds, told Steinmertz Diamonds Botswana, Leo reporters about the results, adding that Schachter Botswana and Lazare Kaplan Alrosa will pay dividends for the year. Botswana. In addition, DTC Botswana has Alrosa faced problems mainly with its reportedly laid off a number of workers. “external” sales, according to Shtyrov. Most of these cutting and manufact- If Shtyrov’s estimate is accurate, uring companies opened their opera- Alrosa’s sales fell 71.7 percent compared tions in Botswana as part of the local to 2007 when it posted a RUB 14.133 beneficiation effort to generate more of billion ($598 million) net profit. the diamond revenues in Botswana. Many diamond manufacturers have Mir open pit received local rough diamond alloca- tions to provide the local work. But with limited demand in the global market for polished diamonds and falling prices for those goods that are traded, diamond manufacturing around the globe has taken a blow and everywhere workers are losing their jobs. In addition, many local diamond miners have limited their output, leading to an additional 1,400 job losses. So far, nine mining and exploration companies have retrenched workers this year: DiamonEx, BCL, Moolman, Mowana, Gope Exploration, Gokhran Diamond Mine Tech, Mupane Gold Mine and Dewet Drilling. The number of job losses is expected to increase if Debswana cuts jobs as well. The Auction on March 31 company is currently in negotiations with worker unions over the issue. Gokhran, the Russian state precious metals and gemstones repository, will hold an auction of large rough diamonds, on DiamonEx Listing Suspension Continues March 31, its first such auction in 2009. Australian listed miner DiamonEx announced that its suspension in trading of The periodic auction of large rough DiamonEx Limited shares on the Australian Stock Exchange (ASX) will continue diamonds offers goods weighing 10.8 ca- until the board of DiamonEx has confirmed its plans for the company. rats or more.The auction will test market The Judicial Management Order which has been granted to DiamonEx’s sentiments, reflecting traders and manu- wholly owned subsidiary, Diamonex Botswana Limited, remains in place following facturers willingness to buy large goods the court hearing, which took place on February 27. A further hearing regarding and how much they are willing to pay for the Judicial Management Order has been set down by the court for March 27, them. The soaring market for large polish- the company said. ed diamonds dropped in late 2008 and DiamonEx said it will update the market once further detail of the plans current demand for large goods is low. regarding Diamonex Botswana have been set by the judicial manager and Applications to bid participate in the agreement reached with its lenders. auction must be submitted by March 13.

DIAMOND INTELLIGENCE BRIEFS 5254 OFF THE SHELF

Harry Winston Opens Dubai Boutique NRF: Americans File Harry Winston, the renowned diamond jeweler and timepiece manufacturer, Taxes Earlier in Hopes announced the opening of its first watch boutique in Dubai, UAE. The new store is located in the Atlantis Hotel and has been open- of Faster Refunds ed in partnership with Ahmed Seddiqi & Sons. Americans expecting a tax “Harry Winston salons are located in the return and anxious to get money world’s finest shopping destinations. We are back in their pockets, will be filing delighted to showcase Harry Winston’s exquisite early this year, according to a collections in such an outstanding setting,” said recent survey. Another change is a Thomas J. O’Neill, chief executive officer of Harry growing shift to filing online. Winston. Of those expecting a refund, 71 “Ahmed Seddiqi & Sons has been a long percent will have filed by the end of term partner of Harry Winston in Dubai. The February, compared to 37.5 percent opening of the new boutique at the Atlantis of people who are not expecting a Hotel reflects our continued commitment to the refund, according to NRF’s Tax Re- brand and to our customers,” said Chairman turns Consumer Intentions and Ac- Abdulmagied Seddiqi. tions Survey, conducted by BIG- The boutique features some of the most research. People who expect a refund are Harry Winston Beverly Hills luxurious and high-complicated timepieces available today. Beginning this spring, the bou- much more likely to file online - 59.9 tique will also carry an assortment of Harry Winston’s diamond jewelry collections, percent versus 38.9 percent. including the classic Winston Cluster, Sunflower and Loop. This year, 68.4 percent of consumers expect a refund from their 2008 taxes. The majority of people Charles & Colvard Moves Ahead With expecting a refund will use the K&G Creations Lawsuit money to pay down debt (48 Charles & Colvard, Ltd. recently announced that its discussions with Jewelnet Cor- percent). Others will put their refund poration d/b/a K&G Creations regarding possible settlement of the in savings (38.9 percent) or invest in litigation between the parties have been unsuccessful. a major purchase like a television or Charles & Colvard’s board of directors confirmed that the com- car (11 percent). One-fourth (26.7 pany will move forward with the lawsuit filed on June 16, 2008 percent) will use refunds for against K&G Creations, anticipating it may be necessary to con- everyday expenses, similar to be- tinue the legal process through a court trial, which is scheduled havior seen in 2008 and 2007. for December 2009. “Whether consumers use a The North Carolina-based company intends to pursue its refund to pay down debt or simply collection claim against K&G Creations for an excess of $2.8 to get a handle on everyday ex- million with interest at a rate of 12 percent from July 4, 2008. penses, ‘free money’ goes a long The board of directors continues to believe that the counterclaims of K&G are way these days,” said Phil Rist, without merit, and the company intends to vigorously defend against the coun- Executive Vice President, Strategic terclaims. Initiatives, BIGresearch. “Americans In June 2008, Charles & Colvard and K&G Creations filed lawsuits against one are looking for ways to increase their another. In August, Charles & Colvard, the sole manufacturer of Moissanite jewels, spending power and this extra boost received a NASDAQ share delisting notice. The following month, the company closed is a great way to start.” its Hong Kong operations in response to steadily decreasing sales.

Bidz.com Annual Revenues $207.4 million Bidz.com's net revenue in 2008 was $207.4 million, a 10.8 percent year-over-year increase. Net income, however fell to $14.4 million from $18.1 million. Net revenue for the fourth quarter declined to $35.1 million, compared with $63.2 million reported in the fourth quarter of 2007. Net income in the quarter was slashed to $2.9 million from $8.2 million the year before. The online jewelry retailer said that unlike many other retailers, it did not promote significantly during the holiday season or use heavy discounting and as a result, it better preserved its profit margins.

5255 DIAMOND INTELLIGENCE BRIEFS OFF THE SHELF

Finlay Dropping Zale Q2 Net Loss $23.6 Million Comparable Sales Department Store Drop18% Business Zale Corporation announced a net loss of $23.6 million for the second quarter Finlay Enterprises has revealed a ended January 31, 2009. The loss was mainly attributed to various charges totaling radical shift in its business strategy in an $28.6 million. Excluding these charges, earnings for the second quarter were $5.1 effort to turn around its fortune. The million. company announced a strategic plan Revenues for the second quarter were $679 million, compared to $828 million in to exit its leased department store the prior period, a decrease of 17.9 percent. Comparable store sales decreased 18.1 business and focus solely on its specialty percent compared. jewelry stores business. In February 2009, Canadian and Puerto Rican assets were Just days after its suppliers were added to the company’s $500 million asset-backed credit asked to accept delayed payments to facility to increase collateral under the facility. help the retailer avert a bankruptcy According to CEO Neal Goldberg, “Our operating results Zale-Celebration filing, Finlay revealed that it had were negatively impacted by the extremely weak macro-eco- Diamond 2008 Season reached “key agreements” with a nomic environment. Additionally, in response to the continued majority of its third lien note holders and deterioration in the business, we aggressively promoted store-wide discounts during vendors. our holiday sales season. We believe these discounts decreased gross margin by “Given the decline in our depart- approximately 500 basis points.” ment store business over the past five Zale stated it will continue its focus on “financial rigor and liquidity.” With inventory years coupled with the strenuous econo- reduction a priority, merchandise inventories were lowered approximately $100 million mic conditions under which we are cur- from the prior year. rently operating, we view our strategic “We have identified key factors to improve our results,” Goldberg added. “Imme- plan to exit this business segment as a diately following Christmas, we returned to a strategy that emphasized emotion with necessary measure,” said Finlay Chair- a promotional posture that is item-specific. The result has been more normalized 50 man and CEO Arthur E. Reiner. percent plus merchandise margins, along with comparable store sales improvement Finlay, which operates 69 Bailey since the trends at Holiday. Banks & Biddle, 34 Carlyle and five Con- “Furthermore, we have identified additional inventory and expenses to drive out gress specialty jewelry stores, plans to of the business. The plan will phase in savings intended to rationalize the size and scale close about 40 of the less profitable of the organization to sales trends.” specialty store locations. Two of the cost reduction measures are the closure of approximately 115 under- Reiner said cost reduction measures performing stores and cutting 245 jobs. include “reduced headcount,” mainly Part of a $140 million in the second phase inventory and cost reductions, the store administrative, as well as sales associate closures are expected to reduce $34 million in expenses and the job terminations positions at the closing locations. another $21 million. The company entered into a limited consent and amendment to its fourth Shoppers Rush to Fortunoff Liquidation Sale amended and restated credit agree- A court-ordered liquidation sale was in full swing at all 20 stores operated by ment. The amendment, which reduces bankrupt jewelry and housewares retailer Fortunoff Fine Jewelry and Silverware LLC. the available commitments to $300 Hundreds of shoppers rushed to the stores, many to use their gift cards before they million and amends the termination date become worthless. to February 25, 2010, permits the com- The retailer’s going-out-of-business sale includes pany to change its business as part of its fine jewelry, watches, silver and all jewelry related strategic plan. inventory as well as store fixtures. Finlay added that along with a The Fortunoff sale comes on the heels of an all- majority of its note holders, it had day auction, held at the company’s attorneys’ entered into agreements with a majority offices, in which a group of six liquidators offered a of its trade vendors, “pursuant to which winning bid for Fortunoff’s $212 million merchandise. the company granted such vendors a The six liquidators are Great American Group LLC, Hudson Capital Partners LLC, SB third priority lien on its and its subsidiaries’ Capital Group LLC, The Gordon Co., Tiger Capital Group LLC and Wilkerson and assets in accordance with the terms of Associates. Fortunoff filed for Chapter 11 bankruptcy protection in early February, the Senior Secured Third Lien Notes.” citing a “severe liquidity crisis” magnified by the grim economic conditions.

DIAMOND INTELLIGENCE BRIEFS 5256 OFF THE SHELF

Brides.com: Cost of JA Welcomes Small Business Assistance in Average Engagement Economic Recovery Act Ring Up 43% Since 2006 Jewelers of America (JA), the national trade association for businesses serving the According to a recently released fine jewelry retail marketplace, has announced its support for the passage of “The survey by Brides.com the average cost American Recovery and Reinvestment Act of 2009.” The act includes much-needed of an engagement has risen to $6,348 – a small business provisions that will benefit the jewelry industry, as well as tax relief 43 percent rise over 2006’s average designed to get consumers spending again. engagement ring cost of $4,435. According to JA, among the business provisions in the new “Clearly, the sparkle – and value – of law that could have the biggest impact on jewelers: diamonds has captured the attention u Small businesses can use losses from 2008 to offset profits in and wallets of couples who are keen on earlier years (any year more than two but less than six years making a significant investment when it ago) to obtain an immediate refund. The provision is limited comes to engagement rings,” said to businesses with annual revenues under $15 million. Michelle Preli, Brides.com editor-in-chief. u The Small Business Administration (SBA) will eliminate or By contrast, the 2009 American Wed- reduce fees for participation in its flagship loan guarantee ding Survey reveals that the average program, which insures banks against default by small cost of weddings rings has fallen. A business borrowers. The new law also increases to 90 typical pair of bands costs $1,575, a 24 percent the percentage of qualifying loans that the SBA percent decrease can guarantee. from the 2006 u The new law will also allow “small business stabilization financing,” in which the price of $2,079. SBA will loan money to pay off existing loans. Under the program, the SBA can issue For jewelers or back loans of up to $35,000. Businesses can then use the money to make up to who manage to six months of payments on previous loans. Interest on stabilization loans will be fully sell all three rings subsidized, and the loans won’t have any payments due for the first year. together, the com- Borrowers must repay them within five years. bined cost currently u Businesses restructuring their debt could delay paying taxes on the transaction for totals $6,835, mark- Kirk Kara Carmella five years, and then spread the payments over an additional five years. ing a 12 percent in- Collection crease over the 2006 combined average “The economic stimulus measure is a step in the right direction and will provide of $6,085. essential relief to jewelers during this challenging period,” said Jewelers of America The survey also found that 82 percent President and CEO Matthew A. Runci. Runci also said that JA will continue to pressure of couples are setting a budget prior to Congress on other pressing issues, such as assistance with business health care costs the wedding. Despite this, the average and passage of a Sales Tax Fairness & Simplification Act, to equalize the situation price of a wedding is virtually un- between brick and mortar and Internet-only businesses. changed over 2006 costs, seeing less For more information on the Small Business Administration provisions in the act, go than a 1 percent increase ($28,082 versus to www.sba.gov. SBA announced that it plans to release more details on $27,852). implementation of the stimulus act provisions in the next few weeks.

Dimexon Launches High-End Jewelry and Expands Fine Jewelry Offerings Following the success of its fine jewelry in 2008, Dimexon is expanding its jewelry offerings. The Indian-based diamond manufacturer is presenting unique high-end jewelry pieces at this month’s Baselworld exhibition. Increasing the company’s stature in the jewelry world, the company has added Mathias Hug, formerly head of high jewelry at Chopard, to its jewelry division. Hug joined Dimexon in January and will be responsible for the development of the company’s latest jewelry initiatives. “With decades of experience in the diamond sector we provide the ideal background for entering this market,” said Vishal P. Mehta, CEO Dimexon Jewellery. “The close partnership with a handful of highly skilled and technologically advanced workshops in Europe enables us to present unique high jewelry products to our global customers.” Dimexon has been designing and manufacturing a more affordable line of fine jewelry products for more than two years, offering a wide range of products and services from “house” collections through to OEM, ODM and full Private Label development. In December 2008, Matthias Klein, formerly with LVMH Group and Chopard, joined to head the fine Jewelry sales and marketing team for Europe and the Middle East.

5257 DIAMOND INTELLIGENCE BRIEFS OFF THE SHELF

Yakubov Group Opens Jewelry Store in Israel Dogeared Jewels & Gifts Diamond Bourse Reports 80% Sales Israeli diamond manufacturer the Yakubov Group have taken the brave move of Increase in 2008 opening a retail jewelry store recently. To make the move all the more interesting, Dogeared, a trendsetting fashion especially given the current economic climate, the company opened its store in the brand that creates handcrafted jewels high-security bourse in Ramat Gan. and gifts, yesterday announced that its According to the company, although the economic climate is difficult, people sales increased 80 percent in 2008, while are still getting married, celebrating anniversaries and buying jewelry to commemo- online sales at dogeared.com grew 125 rate these events. “The only difference is that their budget is lower these days,” says percent during the same period. Itzhak Yakubov, chairman of Yakubov Group. The Los Angeles-based company What says the company asideapart from other jewelres, says Yakubov, is the reported that an increased presence ability to offer quality high-end jewelry at lower rates, which it does by cutting out the with national retailers, and a redesigned extra layers between the diamond manufacturer online flagship store, all contributed to its and the end consumer. “Some would think that Diamond record-breaking year. Dogeared added Tower this is a bold move but in fact, we’ve capitalized product assortment, ungraded shopping the recession to serve a wider range of con- features, a blog, and other social net- sumers.” working functions to its website, which is “The concept of the new store is offering first now in its third year of operation. “This hand, luxury jewelry, at lower rates then any increased dialogue with the Dogeared other jewelry store which are located in the customer has created new opportunities trendy shopping areas.” that will be leveraged in 2009,” the com- The new store, which offers a wide selection pany said in a release. of jewelry made of both white and yellow 18 “Dogeared creates handcrafted karat gold and diamonds, is located inside the jewels and gifts that capture the magic Israeli diamond bourse, in the lobby of the of words, wishes, and dreams. Each Diamond Tower. This is the first time the diamond piece is unique and tells its own story,” bourse opens its doors for consumers that are not says founder and designer Marcia a part of the industry/trade., which adds to the Maizel-Clarke. “We design our line so uniqueness of Yakubov’s jewelry “The concept of the new store is offering first hand, that retailers can put together com- luxury jewelry, at lower rates then any other jewelry store which are located in the pelling merchandise displays and show trendy shopping areas.” different stories at a variety of price Although this is the company’s first foray into the retail area, it has been points. In today’s economic environ- manufacturing and exporting jewelry to high end retail stores across Europe and are ment, we must look at how we can bring exclusive suppliers of some stores for a few years now. It may be the first Yakubov value to our retailers and our customers. Group store, but the company already has plans to open more outlets worldwide. We strive to do this through design that captures key trends, the use of recycled Tiffany and Co Closing Iridesse and repurposed materials, and mean- ingful cards and concepts.” Luxury jewelry retailer Tiffany and Co. has confirmed that it is closing its pearl The company is committed to en- jewelry stores Iridesse. The chain has more than a dozen outlets. According to the vironmentally sustainable practices and company’s third quarter report, Iridesse sales decreased. producing products in the U.S. Dog- Tiffany created Iridesse in 2004. Given the current economic situation and eared uses 50 percent recycled and disappointing sales, Tiffany refined silver in their jewelry and have set has decided to close the goals to increase that percentage. Gift stores. Iridesse joins Laurel- boxes have been redesigned to reduce ton Diamonds, Tiffany’s dia- the amount of cardboard used, the mond polishing plant in wholesale catalogs are printed on Yellowknife, Canada, paper made from mixed sources from which closed February 19. well-managed forests and recycled fibers and much of the leather used is repurposed.

DIAMOND INTELLIGENCE BRIEFS 5258 BRIEFLY NOTED

Automatic Pricing Software Jewelry.com Called “Magic” Revamps Site When dealing in fairly small numbers of diamonds, it’s relatively easy to scrutinize Jewelry.com has been revamped. each one on an individual basis and determine it’s price, but what do you do when The new site is expanding its scope to you are dealing in larger quantities with hundreds or even thousands of goods passing place a greater emphasis on style and through the office? fashion. The site also includes a more Jack Cohen, president of Israel-based J.L.D. Diamonds Ltd. believes he has an comprehensive new retailer directory answer in the form of “Magic Prices.,” This a new program that can automatically that covers multi-channel national and evaluate and determine the prices of regional fine jewelry stores. many stones, all at the touch of a button. The directory expands its listings The idea came about after Cohen, beyond the original eight founding part- who operates mainly in the U.S. and ners of Fred Meyer, Gordon’s, JCPenney, Hong Kong with GIA and Japanese-cer- Kay Jewelers, Littman Jewelers, Macy’s, tified goods, hit upon the notion of Sears and Zales. Jewelry.com helped creating a program that would take all these jewelry retailers by providing dis- the stress out of pricing goods. “Since we counts, coupons and savings to Jew- deal with large volumes, we had to sit elry.com members. down and think about the price of every stone individually. Not only do the individual Jewelry.com is also expanding its characteristics of the diamonds matter, but their price is also determined according content to feature more news, reviews, to which market they are destined for,” he says. tips, advice, education and information Combating Negating the need to calculate each stone by hand, Cohen came about everything to do with jewelry, dia- up with the Magic Prices program, which that will evaluates each certified stone monds, fashion trends, gemological up- according to a defined set of parameters, such as cut, clarity, color and fluore- dates and jewelry-wearing celebrities. scence. Once the program has been set to the dealer’s particular spe- cifications, the whole process is automatic and works by attaching itself to any Eexcel file. With all the brouhaha over pricing lists still resonating in the market, Cohen believes it’s an auspicious time to launch such a product. “People are looking for a way to handle prices. Using this tool, it’s possible to ignore some of the existing price lists.” Magic Prices is available for a free week-long trial and will, says Cohen, benefit any company that manufacturers medium- or high-level amount of certified diamonds, wholesalers and even shops. “Retailers can use the program in such a way as to calculate the prices of the diamonds they buy at 30, 40 or even 50 percent above market prices. Using the program, The site’s inventory, which used to in- they will be able to clearly explain to their customers why there are price differentials clude only jewelry manufactured by An- between two similar-looking stones. din International, now has all online jew- Not only will the program save time on handling inventory, Cohen says, but it will elry and watch offerings from the eight also prevent mistakes made through human error. participating retailers. About 35,000 items are aggregated on the site, allow- OGI Systems Opens Southern Africa Office ing consumers to search, browse and Israeli headquartered OGI Systems Ltd., a leading company in technological solu- compare items side by side. tions for the diamond industry, has opened a support and sales office in Gaborone, Its new search facility now allows to Botswana. The Gaborone office will service the hundreds of OGI’s Southern Africa search by price, store, style, stone, metal, clients in the region. shape, item and collection. Jewelry.com The new branch is part of OGI’s worldwide expansion program. The expansion does not sell jewelry; instead, it directs comes at a time when most other firms are downsizing. OGI said it decided to intensify the final sale to the retailer’s site. “We’re its activities in Southern Africa and provide its customers with “optimal” support and here to educate, help and advise jew- service. According to OGI’s CEO Daniel Benjano, the company plans to introduce a elry consumers, while promoting the jew- revolutionary product in the near future, promising that it will cause, “a manufacturing els and gems of our partnering retailers,” upheaval and transformation in the Industry.” the company said.

5259 DIAMOND INTELLIGENCE BRIEFS BRIEFLY NOTED

Julianne Moore & A Diamond Is Forever Hosted Sarin Profits A Private Pre-Oscar Dinner to Celebrate Decline 80%, Diamonds In Africa, Hosting Festus G. Mogae Appoints New CEO Actress Julianne Moore and Sally Morrison, director of the Diamond Information Sarin Technologies Ltd posted a Center (DIC), hosted a private pre-Oscar dinner at the Chateau Marmont to $1.594 million profit in 2008, an 80.1 celebrate the role of diamonds in Africa. The guest of honor was His Excellency Former percent decline compared to 2007. President of Botswana Festus G. Mogae. The diamond tool making firm Diamonds have always been synonymous with the Academy Awards and the reported revenues of $33.15 million, dinner celebrated the connection of diamonds as an invaluable natural resource for a 10.7 percent decline from the prior southern Africa to the necks, wrists and fingers of the stars as they walk the Oscars Red year, a direct outcome of the slow- Carpet, the DIC said in a release. down in diamond manufacturing Dinner guests heard from Moore about her recent trip to South Africa and Bots- and the subsequent drop in de- wana and of her discovery of the journey diamonds make from the mines of Southern mand for all of Sarin’s products. Africa to the red carpets of Hollywood. As a result of these “These diamonds are special, not developments, Sarin has H.E. President Festus G. Mogae, Julianne Moore and only because of their high quality, Shining Light designers decreased its operating but because they actively benefit expenses by reducing the people in the communities from staff and cutting expens- which they come,” Moore said. “I es. Fourth quarter operat- saw first hand what the develop- ing expenses were red- ment of a natural resource can do uced by about 24 per- for a country’s infrastructure - for their cent compared to the education, for their health, their well third quarter. being - and for their future.” The annual results an- Morrison said Moore brings “an nouncement coincided intelligence and empathy” to the is- with the appointment of sues diamond producing countries Uzi Lebami as chief ex- face. ecutive officer. On display at the dinner was a collection of diamond pieces, including many At the end of 2008, CEO Zeev important international diamond pieces and the never-before-seen Shining Light Leshem left his post. Levami, 56, was Diamond Collection, which showcased a direct example of how diamonds create an one of the original founders of Sarin enduring value and a sustainable source of economic diversification for producing and was involved in the early stages countries. of the research and development efforts. Data Tech Adds Price Calculation to Vibe Levami continued leading many For more than thirty years, diamantaires have been relying on lists to determine the varied such efforts in capital equip- per-carat price of each individual stone. Since several parameters are involved in ment development for the semi- pricing, it is easy to make mistakes when searching for a stone’s characteristics in a conductor industry, culminating at data-loaded list. the position of CEO at a spin-off To minimize these mistakes, Data Tech has added a new feature start-up. Following the sale of the to the Vibe-130 – a handheld scale for diamonds – which gives an company, Levami served as a di- estimated price within a few seconds. A reading is obtained by rector of business development for weighing the stone and setting its color and clarity parameters. -color the acquiring U.S. company. and clarity. Sarin’s board said it believes that Bluetooth capabilities allows price list datae to be downloaded Levami's extensive experience in to the Vibe. The results can also be downloaded onto a computer R&D and business development “will either on the spot or at a later stage. help focus the company for the The Vibe-130’s price list can be adjusted by users to suit their challenges of the current business exact prices, allowing them to create their own lists. climate.” Another advantage of the Vibe-130’s price list is that there is no The Vibe - need to carry extra price lists papers – it’s all inside the device. 130

DIAMOND INTELLIGENCE BRIEFS 5260 MOVERS AND SHAKERS

Banda Reelected DDC President The New York Diamond Dealers Club has announced that Jacob Banda was re-elected president. Moshe Mosbacher was elected vice president. He replaced David Abraham. Nissan Perla was elected Secretary and Jacob Weinstock Treasurer. Banda said he sincerely appreciate the overwhelming vote of confidence. “The diamond industry is facing critical challenges both in America and worldwide,” Banda said. “I look forward to working with our officers, board and membership to improve business opportunities for all diamantaires while at the same time ensuring that we continue to provide the highest degree of consumer confidence in our industry.” The following members were elected to the DDC board: Gary Dimenstein, Abraham Einhorn, Meliech Fastag, Dov Fruchter, Eli Gottlieb, Joseph Khafi, David Klein, Philip Klein, Aaron Landau, Benjamin Moller, Robert Moskovitz, Zev (William) Oster, Moshe David Reisz, Solomon Rybak, Leon Well and Moshe Zwiebel. The Thursday election took place against the backdrop of a power struggle that reached the Supreme Court of the State of New York. Abraham sought a court order that would prevent the elections. He asked the court to first determine if an amendment to the DDC by-laws should be voided. On December 4, 2008 members of the DDC voted to permit officers and directors to serve up to five consecutive two-year terms. DDC members expressed puzzlement at the time at the proposition after the Club had rejected a DDC board recommendation to eliminate term limits for all elected positions nine months earlier.

Bergman, Toback Elected to Head 24 Karat Club AGS CEO Frank in 2009 Dallahan Resigns Phyllis M. Bergman, President of Mercury Ring Corporation, has been elected AGS Laboratories President and CEO chairwoman of the 24 Karat Club of New York for 2009. Bergman is the first woman to Frank Dallahan has resigned. The lab did be elected as chairperson in the 107 year history of the organization. Bergman’s not disclose the reason for the resigna- husband, Ira, and her son, Jeffrey are also members of the tion. The lab also announced that CFO Club. Tom Kelly has assumed the role of chief Michael Toback, President of Myron Toback, Inc., was operating officer, effective immediately. elected to serve as president in the coming year. Toback has “It has been a challenging opportu- been a member of the Club for 12 years. His father Myron is nity and I believe the changes imple- also a member. mented in the past 20 months will prove Harvey O’Conor, President of Findings, Inc., was elected to be very productive for the Lab in the vice president; Alan F. Kleinberg of Michael Werdiger, Inc. as days ahead,” Dallahan said about his te- treasurer; and John Kennedy of JSA as secretary. nure. He joined the lab in July 2007. Phyllis Todd Wolleman, President of Leo Wolleman, Inc. was Bergman Peter Yantzer, AGT lab executive elected as a new board member. Continuing on the board director will work closely with Kelly and are Peter C. Fuller, Richard Greenwood, Alan M. Kaufman, Dione D. Kenyon, Curtis A. the other key executives in the manage- Ley (immediate past chairman), Aron L. Suna, Thomas A. Tanury (immediate past ment of the lab, the organization said in president) and Robert A. Wueste. a release.

Editorial and Research Management: DIAMOND INTELLIGENCE BRIEFS, available only by subscription, Chaim Even-Zohar, Editor is published on a weekly basis to ensure a speedy dissemination of Edahn Golan, Managing Editor information indispensible to executives in the diamond and diamond Michelle Moshelian, Deputy Managing Editor jewelry business. While the information herein is carefully compiled from Rachel Segal, Associate Editor sources believed reliable, no responsibility for its accuracy can be assumed and no repre- Anat Hod, Graphics sentation of warranty expressed or implied is made as to their completeness or correctness. Subscriptions and Circulation: Diamond Intelligence Briefs may not be reproduced, distributed, published or used otherwise Jackie Reardon for any purpose but for the personal information of the subscriber without the prior written e-mail: [email protected] consent of the publisher. Tacy Ltd. Silver Bldg., 7 Abba Hillel St., Ramat Gan, Israel 1 year subscription - $590 l Individual issues of DIB are available for $25 P.O.B. 3441, Ramat Gan 52133, Israel Tel: 972-3-5750196, Fax: 972-3-5754829 website: http://www.diamondintelligence.com website: http://www.diamondintelligence.com e-mail: [email protected]

DIAMOND INTELLIGENCE BRIEFS 5261