VOL. 19, #1, Spring, 2001

Tucson '01 Rocks, Book Review: Gemstones Quality and Value, Volume 2, Financial Strategies, Gem Quotes, International Market Updates, Gem Thieves, Collectors Corner, Gemstone Trends (1975-2000), In The News

  Apr 7, 2001   admin



By Robert Genis

The Tucson Gem Shows lasted a record 16 days and included 25 shows. More than 46,000 attended. The main gemstone shows remain the AGTA, GJX, and the GLDA. The slow holiday season and a weakening economy hampered buying. Many dealers reported sales down from 20-50%. However, certain dealers with the right gemstones had excellent shows.

Burma Market
The situation for unheated Mogok Burma ruby and sapphire, plus Burma spinel and peridot, remains the same - high prices and no production. One major dealer said, "I might see one or two 5 carat rubies a year!" Reports indicate at least 20% of the workers have left Mogok to work at the more plentiful Mong Hsu mines. More information was discovered regarding the alleged multi-million dollar buyers recently in Rangoon. One offered to buy millions of dollars worth of goods, but he wanted to place 20% down with the balance due at a later date. Needless to say, this proposal went nowhere with the Burmese. The other buyer had the assistance of a Burmese broker. He made large bids very close to the costs of the miners, dealers, and brokers. When the owners of the stones countered the slim bids, the alleged buyer left the country. The hysteria created by these large buyers in the Burmese market even sucked in a few dealers from Bangkok. They smuggled their stones into Rangoon to show the buyers. But eventually these Bangkok owners faced the problem of getting their goods back to Thailand.

Despite these failed transactions, three large real buyers in Rangoon recently spent about $2-3 million each on Burma goods at 20% above market prices. The Burmese now want these prices from all buyers. The government auction in January was not even held due to lack of production. The mines remain closed to foreign buyers and 5 new military checkpoints were added between Rangoon and Mogok. Non-Burmese dealers must continue to buy in Rangoon or Mandalay. Many Burmese miners are diversifying into spinel, peridot, moonstone, sunstone, rubellite, and aquamarine.

Blue Gems
Blue continues to be the hot color in the gem world. The fastest sellers at the Tucson Gem Show were Madagascar, Ceylon, and rare Burma blue sapphires. Also in demand was the new heated Cambodian blue zircon. Other hot blue stones were tanzanite, aquamarine, and color change (blue to red) Madagascar garnets.

Market Notes
The new tsavorite find from Kurase, Kenya has a gorgeous green-yellow color but tends to be included. The neon Paraiba tourmaline material is still practically nonexistent. Alexandrite and color change gemstones remain active, with collectors searching for fine stones with dramatic color changes. The emerald market may be coming back, but price action remains sideways. Nigerian orange spessartite and Mandarin orange garnet remain in demand.

Look for a mixed colored gemstone market as consumers, gem dealers, and retailers play it more conservatively in 2001. Collectors and connoisseurs should continue to emphasize unheated Burma goods and any gem not treated. Speculators may try to pick up a gem blue zircon.


Gemstones Quality and Value, Volume 2
by Yasukazu Suwa
Sekai Bunka Publishing, Inc.
144 pages,1998, $120

"Beautiful gemstones and jewelry are loved by people. They create fond memories, bring people closer together, and are finally passed down over generations. They are tools used in creating a luxurious and happy life."

This is a different type of gem book. The publication attempts to discuss the beauty, quality, and value of gemstones. The book almost has the workings of a colored gemstone grading system, yet Suwa argues no grading system can quantify the beauty of a diamond or a colored gemstone. Perhaps it is better seen as a photographic essay of a major Japanese dealer's "master" stones or the publication of his internal grading system.

The book uses high-quality color photographs and a system of quality and value assessment. The first section illustrates twenty-two colored gemstones and diamonds and attempts to explain the subtle nuances that contribute to their unique beauty, the wide range of quality levels, and how these affect their value in the marketplace.

This is presented to the reader with a series of "master" stones that can be used for comparison purposes. Each section starts with photographs of top gemstones and a market update of the gemstone. Specific gemstones are viewed upon a theoretical grid (7x5) with 35 spaces representing tone and quality grades. The stones are further subdivided into gem, jewelry, or accessory (low) qualities.

The best section is colored diamonds - especially the yellow and blue diamond parts. Unlike many other colored diamond books with separate photos of the various grades of diamonds, Suwa's colored diamonds photographically represent the total range from faint to vivid in color with the appropriate tones. The colored diamonds are then cross referenced with GIA nomenclature. It is easy to compare the intensities of colors at first glance. If you are interested in colored diamonds, this section is simple and will easily give you a unique perspective. For some reason, Suwa does not cross reference the pink diamonds.

Interestingly, Suwa's masters include untreated Zambian emeralds but no Colombian gems. I suspect he does not like Colombian emeralds because of the treatment issues involved. For me personally, even in Suwa's gem grades, the Zambian material has too much black and grey to be sought after internationally.

A large portion of the book is dedicated to ruby and sapphire. Suwa shows examples of faceted Mogok and Mong Hsu Burma rubies, plus star rubies and sapphires. Only 21 of the 35 grids have Mogok rubies, and I had a very difficult time finding where my Mogok rubies fit into these masters. I can only conclude the book needs more stones with wider color variations to accurately represent the Mogok mines. The Mong Hsu section is well done, showing the numerous variations in this material. Many more color samples are necessary for star rubies and sapphires, especially the gem reds and gem blues. The blue sapphires that Suwa studies are Sri Lankan. You will not find grading grids for Burma or Kashmir sapphires. Probably the best photograph in the book is of the 100 gems in the fancy sapphire category. There are representations of blue sapphire, violet sapphire, ruby, orange sapphire, yellow sapphire, green sapphire, colorless sapphire, and even padparadscha sapphire.

Another interesting grading section is spinel. The gem red spinels are beautiful. Also included in the spinel grid are pink and orange spinels. Suwa probably could have created entirely new grids for pink, orange, and blue spinel. Tsavorite is very well done, 35 gemstones in the complete grid represent all the various color grades. Regretfully, the blue zircon page does not have a color grid and the author states the gems were omitted due to space limitations.

The second major section of the book deals with gemstone value. Suwa searches history for clues. In 1860, Karl Emil Kluge classified gemstones into five groups based upon hardness, optical properties, and difficulty of mining. Gemstones of the first rank included diamond, ruby, sapphire, alexandrite, and spinel. Interestingly, emeralds were placed in the second rank. Suwa does a superb job in discussing how tone, inclusions, and size affect the values of gemstones. Suwa also describes how the supply, country of origin and treatments can affect the value of gemstones.

Any gemstone book attempting to display colored gemstone qualities is limited by the fact gem photography reproduction is never a simple task. It is a technical nightmare from photographing the stones to the color separations to the final printing. Many of these gem grading photographs have the bad habit of showing the white light reflected to your eyes from the facet junctions instead of the gem's color. Despite that, many of the large photographs of gemstones in this book make it worth its price. But do not fool yourself into thinking you can buy this book and then order a gemstone that fits a certain Suwa quality. A two dimensional photograph and a three dimensional gemstone are quite different.

Instead, this book will force your mind to view the numerous qualities of gemstones in a systematic and logical manner. This is a great book for any new collector who is trying to get a handle on what colors Suwa believes are the best in many species. It may also be a vital tool to members of the gemstone industry.

You can purchase the book from the GIA bookstore at 1-800-421-8161.


We recently came across the following information on investing in diamonds and gemstones at http://www.financialstrategies.com/encyclopedia/investing/investment/diamonds_colored_stones.html.

The National Gemstone site is sourced as an information resource in the article. Generally, we agree with what is written here. However, we cannot believe they read our web site when they state the highest quality rubies come from Thailand. Of course, the best rubies come from Burma!

"Diamonds and Colored Stones
From the most ancient civilizations to the present day, man has attributed great value to precious gemstones. They are desired for their aesthetic appeal, for their worth and as a symbol of status. Their value is based on such properties as rarity, beauty and durability, as well as the fashion of the times.

Gold and silver have intrinsic value because they are recognized as a medium of exchange. Antiques, rare coins and works of art have collector's value. However, precious stones have both intrinsic and collector's values.

Over the past decades, diamonds have not outperformed other types of investment. Colored stones also have only a fair record of appreciation. The price appreciation on diamonds has outstripped inflation, still better than many assets.

There is a strong worldwide competition for top-quality gems, a world market with recognized values that can be exchanged for currency in any country in the world. Also, gemstones have an environment of increasing demand and decreasing supply. Less than 3 percent of all diamonds that are rough mined yield investment grade stones.

Gemstones, like gold, should be viewed only as a long-term investment. They do not generate cash flow, and will not yield a profit on a short-term basis. They should be held for five to ten, perhaps twenty years or longer for best results. To net the best price, the investor should be prepared to wait for favorable market conditions to sell.

Only a small portion of your capital, no more than 10%, should be invested in diamonds or colored gemstones, and it is of the utmost importance that you find a highly reputable dealer.

Stone Evaluations
The grading of diamonds is sometimes a most difficult job, even for the four major diamond grading institutions. There is a high potential for diamond grading errors. Some dealers offer insurance against financial losses caused by future changes in the grades of their diamonds. Diamonds and colored stones are graded according to the four C's - color, clarity, cut, and carat weight. Diamonds should be completely colorless. Color is the most important factor in other stones, accounting for about 70 percent of the value of any stone.

Clarity, or the number of flaws, is highly important in diamonds. Flawed diamonds are the rule, not the exception; it is estimated that only one percent of all diamonds larger than half a carat is flawless. Clarity is less important in determining the value of colored stones; even the best specimens have internal and external flaws.

The investment grade diamond is brilliant cut, with 58 "facets" to allow the stone to reflect as much light as possible. Rubies are most frequently cut in either oval or antique cushion shapes, as are sapphires. Emeralds are cut in a rectangular, or emerald, shape. In modern times, diamonds have been found in great quantities in South Africa and surrounding countries.

Colored Stones
Rubies and sapphires are both created from the same basic material, corundum. Rubies are very rare, and Thailand is the major source of the highest quality stones. Investing in rubies, sapphires and other gemstones is even more complex than investing in diamonds. It is best suited for investors looking for moderate to high risk but maximum reward potential investments. Conferring with your financial planner and gemstone expert before investing is a cardinal rule for all prudent investors."


"Some mysteries are perpetual. Just as we will never know what Mona Lisa was smiling about, or how Baywatch became an international hit, we may never know exactly how big the market for colored gemstones is. Anyone who sits down to try to come up with a realistic figure immediately runs into problems. First of all, unlike diamonds, colored gems aren't a single commodity - there are dozens of different types of gems, with different sources and different values. Mining tends to be done on a small scale in remote areas, and the people who buy the gems don't even want their customers to know how much they paid, let alone customs officials. It's enough to make even the most analytical of government agencies throw up their hands and say, "We just don't know.""
Morgan Beard, Editor, Colored Stone Magazine, January/February, 2001

Diamonds Are a Spy's Best Friend
"As far as the funds are concerned, I have little need for more than the $100,000. It merely provides a difficulty since I cannot spend it, store it or invest it easily without triping (sic) 'drug money' warning bells. Perhaps some diamonds as security to my children and some good will would be better."
Alleged FBI spy, Robert Philip Hanssen


Burma Twins Surrender
In January, Johnny and Luther Htoo, the twin boy leaders of a mystical rebel movement from Burma, surrendered and were given humanitarian asylum by Thailand. Hunted and hungry, 14 members of the God's Army group turned themselves over to Thai authorities on Tuesday after a year on the run along the Thai-Burma border. For more than three years, the boys fought to overthrow Burma's military government, and their followers believe Johnny and Luther have magical powers that make them invincible in battle. The boys once claimed to have several hundred followers. Many Karens, like the twins, are fundamentalist Christians. Both boys looked unhealthy.

Burma has one of the highest numbers of child soldiers of any country in the world, both within the state army and the ethnic and other armed groups pitted against it. Some children, often under 15 years of age, are attracted by the power and prestige of the military, but many are forced to join - orphans and street children are especially vulnerable. Tens of thousands of other children are forced to work for the military as porters, servants and even minesweepers. Young girls recruited as child soldiers also end up as sex slaves of their officers.

Tensions Mount on Thai Border
Burma strengthened its forces along its northern border with Thailand after three days of clashes between troops of the two countries in mid-February. Between 400 and 500 additional Burmese troops have been moved to the border. At the important gemstone market town of Mae Sai a border bridge to the Burmese town of Tachilek was closed. Thai soldiers pointed machine guns and heavy-calibre weapons directly at Burmese troops on the other side. Thailand has also sent reinforcements to the border. This is the worst situation between the two countries in several years. Thailand said the Burmese troops had "broken border demarcation rules" and unless the situation was resolved there would be major problems between the two sides during the remainder of this year. Troops from the neighboring countries have been clashing since the Burmese soldiers tried to use Thai territory to attack ethnic minority insurgents of the Shan State Army. Burma accuses Thailand of helping the Shan rebels and Thailand denies the accusation.

Laos arrested an Australian couple, Jonathan and Kay Danes, on charges of illegal activities in connection with Gem Mining Lao at Vientiane airport on December 23, 2000. They were charged with illegally attempting to smuggle $US52,000 out of the communist country. Gem Mining Lao had been closed pending an investigation into charges that foreign management had been exporting precious stones from the mine without proper authorization. Authorities in Laos raided the sapphire mine and seized 1.7 tons of raw sapphires. The mine is located in Northern Laos, near the Thailand and Burma border.

Bernie Jepperson, the man who claims to still own the mine, is safe in Bangkok after fleeing the country with his wife, Julie Brunes. He contends the Laotion government charges are trumped-up. Jepperson and Brunes will not return to Laos because they fear being shot by Laotian security personnel in league with business interests who are trying to gain control of the mine. Jepperson claims the company he set up in the early 1990's was never transferred to Asia Sapphires, Ltd., a company created on a Canadian stock exchange, because of various irregularities. Jepperson contends he was cheated out of his stock. He also states since the Laotian government suspended mining operations late last year, Gem Mining Lao had accumulated debts over $US600,000.

In January, a court in Laos sentenced Jepperson and Brunes, in their absence, to 20 years in jail and fined them more than $55 million dollars. The Laotion government offenses include removing gems without permission and falsely reporting on documents related to the mine's activities. Laotian authorities may seek the cooperation of Thai authorities and attempt to extradite Jepperson and Brunes back to Laos.

Opponents of Jepperson say Laos was justified in moving to take over the mine and seize its assets because of the legal action by shareholders and concerns about alleged misappropriations. A number of people involved in the dispute over the mine have privately said they are former CIA operatives. One purported contact, Melbourne lawyer Max Green, used the mine in Laos to raise investment funds from wealthy Australians, funds which were subsequently stolen. Green was found murdered in a Cambodian hotel room in 1998.

Ted Savaris, an Australian lawyer representing the Danes, recently stated he believes negotiations to secure the couple's release are at a turning point. He is headed for Laos to secure their release. Someone suspected of a crime can be held for 12 months in Laos. However, recent reports from Laos indicate the situation is unclear. Some statements indicate the Danes will have to go to court and other reports indicate they have already been convicted. Laos, which has been under a communist regime since December, 1975, opened the country up to foreign investments in 1989. Many foreign investors still complain of too much red tape and a lack of understanding about the need for private ventures to make profits. Undoubtedly, this latest incident will not assist in creating new gemstone ventures inside Laos.


American and Russian Gem Smugglers
In January, Russian police arrested a US national and his Russian accomplice at the Moscow airport for allegedly trying to smuggle US$100,000 dollars worth of sapphires illegally into the country. The Russian citizen, a high-ranking official at the airport, tried to help the American get in the 2,000 gemstones, weighing 1,368 carats. The two men were arrested and charged with smuggling contraband on a large scale, which carries a penalty of up to 15 years in prison. The two had been involved in trafficking gemstones from India and the gemstones were then sold on the Russian black market.

Constipated Jewel Thief
A suspected Scottish jewel thief who swallowed his goods to avoid being arrested lost his four-day fight against constipation and allowed police to recover the stolen loot. The bungling burglar swallowed the jewels after being disturbed while robbing a first-floor apartment in Perth. He then leapt to freedom from an icy window-ledge, but landed awkwardly and broke his hip. Officers arriving at the apartment building to investigate the break-in discovered an injured man lying in agony beneath an open window. X-rays revealed he had a broken hip as well as some items in his gut. Pity the unfortunate officer who had to sift through the evidence.

New Jersey Jeweler
In January, two men led police to $26,000 in gems that they allegedly stole from a jeweler's home safe. The gems included emeralds, rubies, topaz, alexandrite, and a pearl bracelet and necklace. The men sold the gems to a store in West New York. They were both charged with four counts of burglary and theft, and one count of conspiracy.

American in Rome Has Jewelry Stolen
In February, Florence D'Urso, a supermarket heiress and philanthropist from New York was in Rome for the elevation of New York's new cardinal by Pope John Paul II. After D'Urso returned from dinner to her suite at the five-star Hotel Regina Baglioni, she discovered her 20-carat emerald necklace and other jewelry missing from the safe in her room. The jewelry was valued at $1 million. Police confirmed the reports but refused to give any additional information other than to say there have been no arrests.

Detroit Diamonds Returned
Michael Esshaki, 33, substituted for his mother at her job at the Antwerp Jewelers on Oct. 31, 2000. Minutes after another worker noticed $750,000 in diamonds were gone, Esshaki announced he was going out for a bagel. After interviews and polygraph tests, Esshaki was named in a criminal warrant on Dec. 5. He was arrested in New York City after failing to surrender to police. He was released on a $60,000 bond after posting 10%, and on Feb. 1 appeared in court and turned over the missing diamonds on an agreement reached by his attorney with the prosecutor's office. He now faces a maximum of 93 days in jail. Campaign finance records reviewed by The Detroit News show Oakland County Prosecutor David Gorcyca received more than $10,000 in campaign contributions during the last four years from Esshaki's relatives but deny any impropriety.

Kansas City Robbery Conviction
A Kansas City businessman, his son and two other men were convicted by a federal jury for their roles in a 1997 conspiracy to rob Tivol Jewels and other businesses of about $4 million in diamonds, jewelry and cash. A fifth man was acquitted of charges that he was part of the conspiracy, however, is serving a life sentence for the 1998 robbery of a Northland bank. The daylight robbery of $2.5 million in diamonds and merchandise from the Tivol store on Oct. 30, 1997 was the largest jewel robbery in Kansas City history.

Angelo Porrello, 77, and Joseph Anthony Porrello, 30, were convicted of seven counts of conspiracy, armed robbery, money laundering and firearms violations. Michael Hatcher, 44, was found guilty of five counts of conspiracy, armed robbery and firearms violations. Nathaniel Kenny, 33, was found guilty of one count of conspiracy, armed robbery and carrying a firearm in a crime of violence. The Porrellos were accused of encouraging others to rob jewelry stores in 1996 and 1997 and then buying the stolen diamonds. Defense lawyers focused much of their case in the 3 1/2-week trial on attacking the credibility of the prosecution's star witness, Clarence Burnett, a 26-year-old convicted cocaine dealer who masterminded the robberies. The defense's primary weapons were audio recordings of more than 5,000 telephone calls Burnett made to friends and family members while he has been held at a jail for federal prisoners in Leavenworth.

Frankel Update
Almost 2 years after he fled to Europe with millions of dollars in diamonds, Marty Frankel stood before a federal judge in Connecticut and pleaded not guilty. In February, he lost his bid to stay in Germany and was extradited to the United States. The 46-year-old is accused of stealing $200 million from the cash reserves of insurance companies under his control before fleeing to Europe with diamonds and two female friends. Federal agents said they are trying to recoup the money he spent on mansions, luxury cars, and girlfriends who he met through the Internet and newspaper ads. Agents have seized about $30 million in bank accounts in Europe, mostly in Switzerland.


Blue Zircon

Zirc.gif Natural blue zircon was an extremely popular gemstone in the 1920's. A relatively new find of Cambodian zircon recently entered the marketplace. It is discovered brown and heated in Thailand to create a bright blue color. This is similar to heating the brown crystals of tanzanite to create blue tanzanite. Top blues should look like the color of "London blue" topaz. The stones range from 6/12 to 7 in hardness, but you should watch out for abraded facets. Zircon also occurs in green, red, yellow, and orange. The gemstone suffers in the market because its name is close-sounding to cubic zirconia, the laboratory-grown diamond imitation. Only a small group of collectors seem to understand zircon is a natural stone often found in Cambodia, Sri Lanka, Thailand, Myanmar, and Australia. Zircon has a high refractive index which is responsible for its diamond-like appearance. Zircon is a heavy gemstone, which means that it will look smaller than other varieties of the same weight. Zircons usually are eye clean and can reach $400 per carat wholesale for 10 carat stones.


Millennium Sapphire
The world's largest carved sapphire has been on display recently in Texas. The "Millennium Sapphire" weighs 61,500 carats, or roughly 27 pounds. The gem was mined in Madagascar in 1995 and bought by a Hong Kong consortium. The football-size gem is carved with the images of approximately 130 people, places and events. The stone will be displayed in other US cities and then sent on a world tour. Many early promoters projected the gem might sell for as much as $500 million. However, a minimum price of $5 million has been established, or about $98 per carat.

Hong Kong Toilet
Jeweler Lam Sai-wing spent US$4 million to create the world's most expensive toilet, complete with solid gold walls and a jewel-encrusted ceiling. The ceiling is decorated with ruby, sapphire, emerald and amber. Many items are made of 24-karat gold, from doors to toilet paper holders. Pure gold bars are embedded in the floor. Mr. Sai-wing, 45, says he was inspired after learning Lenin had once dreamed of making gold toilets for the public. Customers can use the extravagant Roman inspired bathroom if they spend more than $100 in the shop.

Arkansas Diamonds
In January, Star Resources Corporation of Houston began searching for diamonds near the Crater of Diamonds State Park in Arkansas. They plan to remove 60 feet of soil on the Black Lick portion of its 600-acre claim. The company will search 10,000 tons of dirt looking for diamonds, costing the company about $500,000. They hope to find 30-40 carats of diamonds and prove the project is commercially viable.

Colored Stone Magazine Survey
Top Ten Sellers

1998 1999 2000
Blue Sapphire Blue Sapphire Blue Sapphire
Ruby Ruby Ruby
Emerald Tanzanite Emerald
Tanzanite Emerald Amethyst
Amethyst Pearl Tanzanite
Tourmaline Tourmaline Tourmaline
Pearl Amethyst Garnet
Fancy Sapphire Garnet Fancy Sapphire
Garnet & Blue Topaz Opal Pearl
Citrine Blue Topaz Blue Topaz


Each year Colored Stone Magazine (January/ February, 2001) interviews retail jewelers regarding what colored gemstones they have sold in the previous year. For the last few years, blue sapphire has been the number one selling colored gemstone, followed by ruby. Emerald and tanzanite continue to vie for third place. Garnets are a rising gemstone, probably due to the fact they are not treated and the new African production.

Paris Exhibition
An exceptional collection of diamonds will be shown at the Museum National d'Histoire Naturelle until July 15. It encompasses over 400 diamonds, including the ice-blue ring that Marie Antoinette slipped off her finger and gave to her one remaining loyal friend before her execution. Also, highlights for collectors include the Rainbow collection of vividly colored diamonds, featuring the 407.48 Canary Diamond. Co-curator, Hubert Bari, spent two years putting together the exhibition. For the first time in 400 years the small and large Sancy diamonds, part of the French crown jewels, are shown. He also traced a 1609 Moghul necklace, its diamond inscribed with the name of Emperor Shah Jahan, from a fuzzy photograph to its current owner in the Middle East. The Star of South Africa was slipped anonymously into his pocket in a Paris hotel. He found the Tiger's Eye, a whiskey-brown diamond from the Kimberley mines in South Africa, set in 1934 in a turban for the Maharajah of Nawanagar by Cartier. For the first time, the Portuguese royal family has loaned its diamond diadem and its golden fleece badge with its diamond encrusted pendant. Also included is the necklace of Empress Marie Louise, the second wife of Napoleon I. It went back to her native Austria, through the hands of Harry Winston in 1960, and then to Marjorie Merriweather Post in the United States, who left it to the Smithsonian Institution. Also, the show has the elongated, pear-shaped, Purple Heart diamond, the fabled Excelsior diamond, and two flawless pear-shaped diamonds from Golconda, one of which belonged to Empress Farah of Iran. Both weigh around 56 carats.




Is Your Source a Gem Doctor?
Putting True Sparkle Into the Market
By Richard A. Davies
for Office.com

"Cap Beesley, president of the American Gemological Laboratory, New York, knows how serious the gem business can be. When Colombian drug dealers came to him to verify the quality of their emeralds, he told them the truth. The gems were cheap and filled with glass. They were comparatively worthless. And for his troubles, he received death threats. "Yeah, we had DEA agents and FBI crawling all over this place," Beesley says with his characteristic take-no-prisoners cadence.

"We've been in tense situations. The emerald and ruby business are both tied to the drug business. In Colombia, stones have become the vehicle for laundering money. Of course, we weren't looking at it like that. We were looking at it to define and quantify the fillers. A year ago they wanted to kill us, now the Colombians come here. And they're coming here because what we said was correct. We give them a mechanism for selling stones legitimately."

The bottom line for Beesley and those who buy top quality stones, for whatever reason, is the quality of the stone. And short of a laboratory analysis, you are rarely sure of what you are buying. "When we did analyses for 20/20 and for Dateline we went through six retail operations with each program and looked at emeralds and rubies and not one of the retailers revealed that their gems were treated. Not one," says Beesley.

Robert Genis, president of the National Gemstone Company, Tucson, Ariz., agrees that many stones are doctored and that is why most collectors look for stones from a mine with an established reputation. "There is a brand awareness amongst collectors. Sources like Burma have been around for 500 years. So everybody knows about Burma rubies and everybody knows that Burma rubies are the best. Everybody wants a Burma ruby. You go to the auctions, such as Sotheby's, and you will find that everybody wants Burma rubies."

Once in a while, a new source of gems crops up. Genis notes that these new mines must fight for reputation. Rarely does a new mine have the same quality of gem. The randomness of nature says that the quality may be anywhere along a sliding scale. Until the world gets some idea of the quality and the quantity, it will not garner quality prices. "The new sources, because nobody has ever heard of them, they sell for a discount. It may take decades, even generations, before it becomes established," Genis notes.

For anyone buying gems, both Genis and Beesley recommend that the gems be verified as containing no fillers and as not heated of irradiated. "Most of the gems you see at auction will have AGL (American Gemological Laboratory) papers which identify the source," Genis says. "But that is not always the case."

Beesley has no qualms about selling treated stones, as long as they are noted as such. He would like to see dealers extend the same standards they expect from their sources to the stones they sell at retail. "If the retailers compromise their reputation, then they are compromising the long-term stability of the business. That's really unfortunate.""

The information provided in this newsletter has been derived from research and sources believed to be reliable. However, no guarantee is expressed or implied as to their validity. Opinions included herein are subject to change without notice. The gem market is speculative and unregulated. Certification does not eliminate all risks associated with the grading of gems. Recommendations are meant for those who are financially suited for the risks involved. Past performance is not a guarantee of future performance. Neither NGC nor The Gemstone Forecaster guarantee a profit or that losses may not be incurred as a result of following its recommendations. They may also hold positions in areas they recommend. Subscribers should not view this publication as investment advice, nor is it intended as an offer or solicitation with respect to the purchase or sale of any security.