True North Gems Seeks Alternative to Myanmar “blood” Rubies

Socially responsible investing has evolved andhave put a wholesale value of US$3,220 per carat on
gradually worked its way to higher prominence in thea 0.69 carat ruby from Aappaluttoq and a US$460
financial industry during recent years, as hasper carat value on a 0.96 carat pink sapphire from
corporate social responsibility in the commercial andAappaluttoq.
industrial sectors of the economy. That has certainly“Our primary focus as a company is now to get
been the case when it comes to mining companiesa bankable report done on our main occurrence, and
and developing mineral resources, most notably in thethe work this summer was the first major step on
case of conflict, a.k.a. “blood” diamonds.that route - our past work has shown we have
The role mineral resource development plays insomething worthy of advancement, and the
financing repressive, authoritarian regimes is comingfeasability will tell us the economics,” said True
up again in light of recent protests by BuddhistNorth president Greg Fekete.
monks and others in Myanmar and their violentThe company during the past two field seasons has
suppression by the country’s militaryamassed 120 tonnes of mineralized surface material
government. Myanmar produces more than 90% offrom Aappaluttoq. A total 3.6 tonnes of samples
the world’s rubies—a trade estimated to behave been sent to Fiskenaesset for processing True
worth US$2.1 billion wholesale according to MVINorth’s gravity concentration plant. Management
Marketing Ltd. research—and it has also long beenexpects to issue a report shortly.
the world’s largest miner and exporter of jade,Blasted out of a bedrock Host Zone from within
primarily to China.tightly folded zones of phlogopite and
Mining companies like Vancouver’s True Northpargasite-enriched alteration using focused,
Gems (TSX:TGX), which is working to develop alow-intensity blasting to control grade and width, the
ruby and sapphire resource in Greenland, can play alatest bulk sample will yield an analysis of gemological
role in breaking the dominance of governments suchcriteria and gemstone conditions that would occur
as Myanmar’s, the world’s largest supplier ofunder typical mining conditions, according to company
rubies and sapphires, as well as jade.information. The data collected will also enable
Myanmar’s military government has made acomparison with grade and stone distribution
concerted effort to gain control of the country’sgathered from the earlier 2006 and 2007 of the bulk
lucrative gem trade during the past two decades,samples that were collected using chain saws and
jeweler, Fair Trade and human rights advocate Benchisels.
Leber of Leber Jeweler Inc. told Resourcex.“The only assessment that can be made about
“At present, gemstones are the regime's thirdthe value of the stones, our current inventory or any
largest export, netting close to US $300 million,eventual production at this point is that the sheer
although the unofficial number is no doubt higher. Atquantities of gem grade material recovered from bulk
present, the military government controls a majoritysamples indicates the potential exists for a
share of every gem mine, controls distribution ofcommercial operation that would defined by high
licensing and permits, as well as runs the gemoperating margins, low capital costs and high internal
auctions in Rangoon. While there arerates of return,” True North co-founder,
‘partners’ in the mines, these are mostchairman and CEO Andrew Lee Smith, told
often government officials or close allies of theResourcex.
regime.”“The actual magnitude of the project value is
Campaigning for Fair Tradedependent on a series of variables such as stone
Prominent jewelers, such as Tiffany’s in 2005,size, yield on cutting, and aspects of statistical
have come out, instituted policies stating that theydistribution and quality—know as the ‘stone
will not purchase rubies and other gemstonescurve’—that are being defined through
produced in Myanmar and have joined campaignsmanufacturing experiments that are ongoing.”
against them. Jewelers such as Leber have joinedDeveloping Fiskenaesset
organizations like the US Campaign for Burma, theTrue North worked up a CAD 3 million budget for the
American Gem Society and the Council for2007 field season at Fiskenaesset, the objective
Responsible Jewelry Practices.being to deliver a Preliminary Assessment of the
While the US has instituted a trade embargo onAappaluttog ruby and pink sapphire occurrence. This
Myanmar, the EU has not. Recently, some of Britain'sincludes a 5,000-meter diamond drilling program, as
leading jewelers have been accused of helping keepwell as additional bulk sampling and geological mapping.
the military dictatorship in power by trading in the“We are currently in the process of preparing a
country’s “blood” rubies.Preliminary Assessment (scoping study) that will be
According to one news report, Asprey, Cartier,authored by Wardrop engineering who have provided
Leviev and Harrods are selling Myanmar’s rubiesthe independent oversight of the exploration program
and gems in their central London stores, with someand will complete the report by end of the first
items priced as high £500,000. British Foreign Officequarter of 2008,” Lee Smith elaborated.
sources indicated shortly after news reports brokeCompiling technical, valuation and marketing
that Gordon Brown was pressing the European Unioninformation True North has been preparing with
to introduce tougher sanctions against Myanmar thatcompanies including MVI Marketing and Wardrop
would prohibit sales of its gems in Britain.Engineering, the report will a first assessment of the
"A gift of a ruby is meant to symbolize love, but if itproject’s economic parameters, according to Lee
comes from Burma the true price is paid in blood andSmith.
oppression," said Mark Farmaner, acting director ofAccomplishing this will demonstrate that the risks
Burma Campaign UK. "Any rubies on sale in the UK willassociated with marketing, manufacturing and
have been purchased at some point from the militarytechnical aspects of the projects are manageable and
and so will be helping to fund that regime."leave financing and project/permitting, political risk as
An Alternative Emerging in Greenlandthe main areas to be addressed,” he explained.
If development plans work out, alternative sourcesAssuming a positive Preliminary Assessment,
for rubies and sapphires—both varieties ofmanagement is working up a 2008 feasibility program
corundum—will emerge in the next few years,with an estimated cost between US$10-15 million. If
offering gemstone buyers and the jewelry industryall these pieces fall into place, True North anticipates
and alternative source of rubies without the moralmoving the project into pre-production in 2009 and
stain Myanmar gems carry.starting full-scale production by 2012.
Vancouver’s True North Gems on Oct. 9This article is intended for information purposes only,
announced that it had successfully collected its third,and is not a recommendation to buy or sell the
27.8 tonne bulk sample from Greenland’sequities of any company mentioned herein. It is
Aappaluttoq ruby and pink sapphire resource frombased on sources believed to be reliable, but no
the company’s Fiskenaesset Ruby Project,warranty as to accuracy is expressed or implied. The
thereby completing its 2007 field sampling program.opinions expressed in the article are those of the
Fiskenaesset has thus far yielded individual rubies andauthor except where statements are attributed to
pink sapphires weighing more than 80 grams, or 400individuals other than the author, in which case the
carats. Rarer than diamonds, rubies and pink sapphiresopinions are those of the individual to whom they are
are valuable gem materials. Although prices varyattributed.
greatly depending on quality, independent valuations