Vol. 23, No. 1
Spring, 2005

TABLE OF CONTENTS

Tucson Rocks with Gem Shows
by Robert Genis

The 51st annual gem show extravaganza took over Tucson for about two weeks. It started on January 27th and ended on February 13. The shows are made up of about 40 different venues where artists, wholesalers, retailers, international dealers go searching for beads, jewelry, gems, fossils and minerals over a 20 mile radius. The shows vary from the latest upscale resorts to mini-tent cities that spring up along the freeway. It is estimated 50,000 people including 4,000 dealers attend these shows and it brings over $75 million to the city. The entire city is filled to capacity during the gem shows. Restaurants are packed and many stated business doubled. Parking is becoming more of a problem. All the lots close to the downtown shows were full by opening time. Of course, hotels are booked at least a year in advance.

Bizarre Events
A man was killed during a bizarre chain of events that ended in a car explosion in the GJX Show. It all started at the freeway when a driver was stopped at a light. According to the passenger, someone tried to get into the van. The driver took off and the person trying to car jack the van started shooting from the street, hitting the driver Jesus Chacon. He managed to pull into a parking lot, but the van collided into the GJX show tent, starting a fire. Chacon died at a Tucson hospital and the shooter is still on the loose.  Also, a man accidentally ran over his wife on his birthday, bringing the Canadian couple's trip to Tucson Gem Shows to a tragic end. A former bus driver, Charles Craver , 71, was pulling his RV into the motel parking lot when he ran over his wife killing her. His wife had been standing in front of the RV trying to guide her husband into the parking space.

Main Wholesale Shows
The main shows for wholesalers are the the American Gem Trade Association (AGTA) show at the Tucson Convention Center, the Gem and Jewelry Exchange (GJX) in the tent next door and and the Gem & Lapidary Dealers Association (GLDA) new show which debuted at the brand new Starr Pass Marriott Resort & Spa in the western foothills. Many GLDA dealers abandoned the show and moved into the expanded tent at the GJX.  For those who made the trek to Star Pass, the $200 million property is an amazing venue. Majestic saguaros line the mile-long road to the resort. Starr Pass offers stunning mountain views on one side of the resort and sparking city views on the other side. Although most dealers at the GLDA thought the show was “slow”, maybe this is to be expected for the first year of any new show.

Centurion
The La Paloma Resort was the home to the high-end by invitation only Centurion Jewelry trade show for the fourth year. This is truly a world class venue nestled on 250 acres in the Sonoran Desert foothills of the Santa Catalina Mountains with picturesque mountain, desert and golf course views. This is a unique show in that it is 50% owned by the exhibitors. The show used to be four days but has now been reduced to three days. The show has approximately 120 exhibitors. The 218 buyers were carefully preselected and “comped.” The show pays for these buyers’ airfare, rooms at La Paloma, food, drinks and entertainment. Another 100-150 have day passes, which allow buyers to come for a day at their own expense. These “day” buyers need the approval of four of the exhibitors to be allowed into the show. There is no minimum required purchase, but each buyer is rated, and after the show the exhibitors vote on which buyers should be invited back.  According to a major New York colored diamond dealer, “This is the hottest show in the world. We are not here to sell but to meet people to do business with later. It is very difficult to get someone to buy something between $500,000- $1 million at the show. Most people want to see the goods in their own lights.”

Many dealers stated this show is their favorite show. It is laid back and many now find Las Vegas too overwhelming. Here everyone is happy and doing business.  Bill Sprague, National Sales Director, of Sierra Jewelry, Los Angeles, CA, said, “This show is the wave of the future. There are so many shows now, how can you differentiate your company? Being a member of the Centurion show is one way. We each put up 20-25k but we get to know all the buyers. It is a process and this is a classy environment.  This is a much more civilized way to buy and sell than other shows.

This show is a great way to make new contacts and saves the sales staff from having to travel to out of the way places. From a marketing standpoint, a major company cannot afford to not do this show. In the long run, it is less expensive than taking out four color ads in major magazines. We have made some sales at the show but not enough to make a profit or break even. You must look at this show from a long term perspective.”

AGTA
The AGTA had more than 400 exhibitors filling the Tucson Convention Center. Last year, the AGTA show drew 10,600 buyers. Preliminary figures showed the attendance was down slightly. In an effort to expand from solely loose colored gemstones, the new addition for 2005 was the Spectrum of Design. This was a design jewelry section featuring designers who work in colored stones.  The consensus of the show was most dealers had better shows than last year. Some dealers reported gains of 30% or more. Goods less than $5000 sold well the first couple of days and tapered off. Goods above $5000 were stronger later in the show. Colored diamonds in the six figures were sold at the show to retailers. Dealers also sold large quantities of goods to tv shopping channels and manufacturers.

Hot Stones
Untreated and un-enhanced stones remain the most sought after item at the shows. Buyers are looking for untreated sapphires and rubies and are willing to pay the premiums. Buyers wanted proof the stones were not treated. Regretfully, unknown foreign labs seemed to dominate the paper game. Pink Sapphires were hot stones and buyers continued snapping up fancy-colored sapphires. Rubellite and pink tourmaline were strong. Spessartite garnet was also hot.

Special Stones
A two carat fancy intense blue green diamond. that looked like a paraiba tourmaline priced at under $500k. Also seen was a clean 5 carat “windex blue” Brazilian paraiba for $20,000 per carat. Another 5 carat Brazilian paraiba that was deemed important because it was Gems and Gemology was mounted and priced at $300,000.

Conclusion
A gem dealer commented, “ Imagine being an alien and being dropped in Disneyland. Where would you go first? This is how the Tucson gems shows are becoming.” Despite the continued expansion of the shows, Tucson remains the one show everyone in the colored gemstone business attends. This year, the colored gemstone market reaped the rewards of the economic recovery.

Collecting Padparadscha Sapphire
by Robert Genis

The rarest and most valuable fancy sapphire is the padparadscha (also spelled padparadschah) (pronounced padpa-rad-scha), or commonly called “pad” or “pod” in the trade. These extremely rare and prized sapphires are light to medium-toned orange-pink or pink-orange stones usually found in Sri Lanka. Padparadscha sapphire is probably rarer than fine Burma Ruby.

Brief Gemology
With a hardness of 9, sapphires are extremely tough and durable and suitable for use in any kind of jewelry. It is the hardest gemstone type known except diamond. Sapphires have a relatively high refractive index, which provides sparkle and brilliance. It is believed the unique color of the orange-pink padparadscha sapphire is from both iron and chromium impurities.

Famous Pad
The most famous padparadscha is the 100.18 carat stone in the Morgan collection at New York’s American Museum of Natural History. The stone has been criticized for being too orange and not possessing enough pink color.

Burma and Other Sources
Gem quality padparadscha are rare, but fine specimens have been reported from Viet Nam and more recently Burma. The new Nayar or Nanyar area in Burma is producing a few orange/pink padparadschas. Of course, these stones are rarer than the Sri Lankan material and possess the sought after Burma pedigree.

How to Define Color
The definition of padparadscha sapphires has become a matter of debate within the gemstone trade since the discovery of orange brown sapphires in Africa about 25 years ago. A true padparadscha must display a combination of both orange and pink colors. These colors should blend so that it is difficult to see where the pink stops and the orange begins. Others say the orange and pink should mix proportionately and favor the pink. Dealers with goods from new sources want to expand the definition, as having this name brings a price premium. You can get a great deal more if a stone is labeled padparadscha vs. orangish brown sapphire. Traditionalists want to keep the definition limited to a few gemstones to keep the stones rare and valuable.

Tone and origin are crucial factors in determining what truly defines this gem. Most dealers believe the term should be limited to the light to medium tones of Sri Lankan sapphires with a color that is similar to salmon. The color is not vivid but pastel. The Umba Valley, Tanzania gems often sold as padparadscha have too much brown and dark tones. With a few exceptions, the new Madagascar and Tanzania material does not have the same attractive color/tone appearance as the Sri Lankan material.

Japanese Padparadscha Problem
The Japanese have always had a love affair with padparadschas. A few years ago, large quantities of low quality corundums were found in Madagascar.  A Thai treater finally turned the corundum into padparadscha colors with beryllium. Regretfully, many of these first new stones were sold by Thai dealers and were graded as simply “natural” or sometimes "heated" by Japanese laboratories and sold to Japanese consumers.  It has been estimated between 50,000 and 100,000 stones worth millions were imported into Japan. Eventually, the trade became aware of the new treatment and trading in these goods as natural padparadscha came to a halt.  The real issue is disclosure. Many feel that if the stones are properly priced and disclosed, people will still buy the stones. In essence there are two markets for these stones; the heated or unheated pads represent the pinnacle of a collector gemstone and the bulk diffusion or beryllium treated gemstones occupy a much lower niche. Of course, the dealers and consumers who first bought the bulk diffusion or beryllium treated gemstones for natural prices got the short end of the stick.

The Myriad of Treatments
You must assume that all sapphires are treated. Most padparadscha sapphire in the market is subjected to heat and and unheated gemstones command a substantial premium.  Although the heating of sapphires is acceptable in the trade because the process is permanent, it must be disclosed to consumers. Some dealers claim their padparadscha sapphires are cooked with" low" heat. A gemstone is either heated or not, although low heat is preferable to the "super-fried" treatments of today.  Of course, bulk diffusion or beryllium treated padparadscha remains a major concern. Immersing the goods in methylene iodide often reveals color zoning in beryllium-diffused sapphire. According to Ted Themelis of Gem Lab,Bangkok, Thailand, “Be advised that the second generation of the Be-treated corundums is already in progress. The aim is to reduce/eliminate the "ring-around-the-color" present in some Be-treated stones. The process to some extent has succeeded and the situation is still in progress.” A new detection method for beryllium-diffused sapphire is Laser Induced Breakdown Spectroscopy or LIBS. According to Cap Beesley, President of American Gemological Laboratories, New York, New York, “The beauty of LIBS is that it is a focused laser, striking the surface of a sample, creating concentrated and localized micro-plasma, and only leaving a shallow micro-crater that approximates the width of a human hair. A Fiber Optic collection device transfers the data to a compact spectrophotometer. Within seconds the signal is translated into a full spectrum analysis revealing all the elements contained within the sample.”  Due to the potential treatment issues with the material, it is critical to have a major independent lab report when buying/selling an expensive padparadscha sapphire.

Prices
The bulk diffusion or beryllium treated gemstones sell for low prices. They can be found in the hundreds of dollars per carat range. Only the natural Sri Lankan and Burma padparadscha sapphires sell at a premium, nearing the price of a Kashmir sapphire. An unheated gem padparadscha will range between $4000-$10,000 per carat. Large gems can exceed these prices and may be priced at over $20,000 per carat.

Summary
Gem quality fancy padparadscha sapphires are rare, especially the unheated Burmas and Sri Lankans. Despite all the potential pitfalls with this market and the overabundance of treatments, to hold a natural padparadscha in your hand is truly a wonder. It doesn’t matter if it reminds you of a salmon or a tropical sunset, these stones are truly remarkable.  They are simply hard to find, like the proverbial needle in the haystack. Natural untreated padparadschas are hot collector items and are bought up as quickly as they are found.

Sri Lankan Gem Market Escapes the Wrath of Tsunami
by Robert Genis

According to Wijitha Paranagama, President, Sri Lanka Natural Gems, Tokyo, Japan. “The tsunami was the largest, most destructive event to ever happen to my country. Although the huge waves hit only the coastal towns and the villages of the country, the death rate and the number of homeless people is unbearable even to a large country.” According to an American gem dealer who specializes in Sri Lankan gemstones, “The latest estimates are that one million people in a country of approximately twelve million are homeless, hungry and in mortal danger of disease.” Gorgen Bleck, a gem dealer in Ratnapura Sri Lanka states, “This is the worst calamity to befall this island nation during its entire recorded history. When the numbers are finally tallied, just in Sri Lanka, you will find more dead from one hour of raging tsunamis than from 20 years of civil war. The death toll is near 50,000 so far and that's a conservative number. Bodies bloated with water are still being collected and will be for days or weeks to come. The number will surely approach 75,000 and could very well exceed that as they clear away all the debris of buildings, hotels, trains and buses that were once full of people and are now inaccessible under tons of rubble. There are some remote villages and towns completely washed away, and no longer in existence, where the number of missing is still unknown.”

On The Ground Report
Bleck has lived in Sri Lanka for over 20 years. He reports, “I have returned from the far side of the island after a very comprehensive overland recon adventure through the jungle, across rivers and bays. I witnessed such vast destruction reminiscent only of photos I have seen of blanket bombed cities and towns from World War Two. The damage penetrated inland up to 3 kilometers (nearly 2 miles) in some areas. The psychological shock suffered by tens of thousands is starting to wear off and the realization of and grieving for, what was lost is starting to sink in. Most families have lost immediate members. Some families were totally wiped out. Very few were spared. The suffering and misery is like a thick fog you can smell, taste, see, hear and feel. It permeates every where, every thing and every one.”  Bleck continues, “All the coastal waterways have been polluted with corpses and sewage. Bodies are still washing ashore on most beaches. They are finding bodies already too decomposed for identification. Qualified personnel are taking DNA samples before disposing of the bodies of tourists in mass graves along with the locals. The local military and police along side local residents that survived and volunteers from all over the country are trying desperately to clean up the stench of rotting flesh before it becomes a major health hazard. Unfortunately, there is a lack of heavy machinery needed for much of the clean up. Backhoes, cranes, bulldozers and such are in short supply around the more populated areas needing extensive clearing.  Main roads and bridges to these areas are still out. I have spent time in these remote areas and some of the most beautiful beaches I've ever seen no longer exist. The natural beauty and abundant wildlife has always amazed me. It's all history now.”
 
Gem Industry Affected
Paranagama states, “The gem industry will not be hurt because of the tsunami. The most damage was to the gem and jewelry outlets which sell their exclusive jewelry lines to foreign tourists in the major hotels along the coastal belt. They are completely washed out in many cases.  However, this proportion is small as far as the gem industry is concerned.”  Bleck concurs, “None of the well known, established or major gem producing areas have been affected by the tsunami.” The gem industry is primarily located in the districts of Rathnapura, Kandy, Matale and Badulla. Most of the processing, cutting and jewelry manufacturing occur in Colombo. These areas escaped the brunt of the tsunami.  Paranagama continues, “The Gem and Jewelry Authority in Colombo has not been affected. The mine level people are also well away from the damaged areas and their operations are taking place without any interference.” Of course, the present monsoon rains slow down mining production this time of year anyway. The tsunami damage and press coverage may cause international buyers to cancel trips to Sri Lanka and this may affect the gem business. Sri Lankan Air Lines and most of the other international flight services are operating. Most of the buyers from Japan, USA and Europe as well as from Middle East and Eastern Asia will probably continue to buy goods as usual. Sri Lankan dealers who sell their gems outside the country should be able to operate without any trouble.

Increasing Prices
Prices have increased for Sri Lankan goods recently but it really has nothing to do with the tsunami. Production has been steady but the gemstone market is rising due to the high demand-especially for non heated gemstones. Prices will probably increase further and expect some tightening in 3-6 months. The reason prices will increase is the entire country is focused on helping the people who have been devastated by this disaster. Obviously, gem production will probably suffer and this should increase prices.  Bleck concludes, “Unfortunately, the prices I'm being quoted seem to be on the high side.  The tsunami did not affect these prices as they were high before the disaster.  The general shortage for better stones has been driving prices up.”

Conclusion
Bleck sums up the horrific situation, “ There are also nearly 2 million homeless local refugees. The rural areas seem to be suffering the most as the limited resources are deployed to the more populous areas. Although massive foreign aid of all sorts is pouring into Sri Lanka in unprecedented amounts, the situation is dire and getting worse in some areas. The infrastructure of this country is totally incapable of
handing a calamity of this proportion and effectively dispersing what is needed to where it is needed. Due to the large scale destruction spread out over 70% of the country's coastline and a stumbling bureaucracy where one hand doesn't know what the other hand is doing, a lot of the aid is not reaching it's intended target. The sparser populations and many remote villages and towns have received nothing. ” The people of Sri Lanka need the assistance of the diamond and gemstone industry to help lift them out of this horrible catastrophe.

To Contribute To Sri Lankan Tsunami Victims
Gordon Bleck Fund
www.bluefirelanka.com


Recent Auctions Update
Colored Diamonds-Sotheby’s
A square .91 purplish red, SI1, sold for approximately $616,000 per carat. A round 1.01 vivid purplish pink, VS2, sold for $224,000 per carat. A round 1.23 fancy intense purplish pink, SI1, sold for about $143,000 per carat. A pear shaped 4.08 vivid purple pink, IF, sold for $480,000 per carat. A pear shaped 10.62 vivid blue, VVS1, sold for $403,000 per carat.

Colored Gemstones-Sotheby’s
A 1.75 Burmese ruby sold for $17,000 per carat. A cushion 12.11 Kashmir sold for almost $35,000 per carat. A step cut 13.12 Kashmir sapphire sold for over $30,000 per carat.

Colored Diamonds-Christie’s
A matching pair of .84 round fancy intense pinks sold for slightly over $160,000 per carat. Two pear shaped fancy intense blues weighing 2.36 and 3.02 , both SI1, sold for $212,000 per carat.

Colored Gemstones-Christie’s
A cushion 5.27 Colombian emerald sold for over $31,000 per carat. An 8.03 oval Burma Ruby sold for $142,000 per carat.

In The News

Top 10 Gemstone Sellers
Colored Stone Magazine
January/February 2005


1-Blue Sapphire
2-Fancy Sapphire
3- Ruby
4-Tanzanite
5-Emerald
6-Pink Tourmaline
7-Amethyst
8-Blue Topaz
9-Peridot
10-Pearl

Color Profile Exposes Faked or Stolen Gems
New Scientist Print Edition
March 14, 2005
by Anna Gosline


Jewelers say that every gemstone is unique, and soon they may be able to prove it. That will make it easier to recover lost or stolen gems, even after they are cut or altered.  The jewelry industry has long looked for ways to establish a gemstone's type and quality, and to spot fakes. But identifying individual stones is difficult because there are so many, and the good ones are quite similar.  Now a technique dubbed "microspectrometry" could change that, by mapping the unique color patterns of each gem. Mike Eyring of the Arizona Department of Public Safety and Paul Martin of CRAIC Technologies in Altadena, California, both in the US, measured the spectra of the ultraviolet and visible light absorbed by three sapphires and three spinels, often used in place of rubies. Sapphires get their blue color from charge transfer between iron ions. Spinels, like rubies, glimmer red from chromium impurities.

Ultraviolet "fingerprint"
The researchers recorded the spectrum emitted by a 10-micrometre-wide point on each stone's surface and found that every one, even those of the same type, had a different spectrum. The differences were particularly marked in the ultraviolet range. "That could be your fingerprint," says Martin, who presented his results at the American Academy of Forensic Sciences meeting in New Orleans, US, last month.
George Rossman, a mineralogist at the California Institute of Technology, US, is skeptical of the claim that every gem's spectrum will be different. But mapping the variations in color, he says, could provide useful information. "The question that needs to be researched is whether this tool adds enough to what is out there already," he says.

Gemstone Therapy - Using Pious Stones for Curing Ailments

February 25,2005
Health Care Guide ExpressNewsline.com

Gemstones for illness or to improve one’s emotional life is an emerging trend in the colored gemstone marketplace. ED

Gemstone therapy is a form of alternative medicine based the idea that gemstones carry certain properties, or vibrations that can be beneficial to the body in varying ways. Some stones may help alleviate a physical ailment, but more commonly, stones are used to help with emotional issues. The methods in which one may use gemstones vary, but each seems to serve their own purpose. Therapy using gemstones is often used in correlation to the chakras, auras, the wearing of jewelry, or usage of touchstones and more. It is believed that chakras are located at several points through the body; the exact number is debated by tradition. Seven seems to be the common number. Each of these seven chakras are associated with a particular human trait and color. When these chakras fall out of alignment, stress, irritability, and physical illness can set in. By using gemstones associated with a particular color of the chakra, balance can be restored. The person to be treated could lie down, place a stone on the correlating chakra, and rest quietly in order to restore harmony.  Auras are also believed to carry certain properties, and when out of alignment, a particular energy will become deficient. It is believed that gemstones can restore these energies. The process is very similar to chakra gemstone therapy. Examine what property is out of alignment and repair it.

A popular trend is to wear beads around the wrist or neck. You can walk into many stores and find a little basket on the counter full of beaded bracelets with tiger’s eye, amethyst, or about any other stone you could want. You might be experiencing high stress, so wear a hematite ring. Perhaps you need to feel grounded, so wear an amethyst pendant, or carry a touchstone in your pocket. It is no secret that gemstones help us to feel better.  If you are not sure where to begin, look at this short list for an idea of stones and their properties. Do not take the listed properties as absolute. Each person carries their own vibrations that make them unique. What works for one individual may not work for another.  Experimentation is the best approach. Take a trip to a lapidary shop and dig through the baskets of stones. Does a particular shape grab you? A particular stone? A color? Through this process, you will discover what brings you joy and balance.

- Amethyst: meditation, healing and protection.
- Emerald: to eliminate negativity and to bring prosperity and harmony into one's life.
- Garnet: grounding and stimulation.
-  Jade: wisdom, courage, protects, instills courage.
- Quartz: purity, grounding, amplifying and channels energy.
- Ruby: the stone of passion and devotion, enhances sensory awareness plus integrity.
- Sapphire: Promotes loyalty and love, helps you bring about the fulfillment of dreams.
- Spinel: Calms, alleviates stress, depression. mental rejuvenation.
- Yellow Sapphire: Personal power, social identity, influence, authority, self-control, energy, peace, radiance, inner harmony, vitality and inner strength.

Gemstone Price Trends: 1975-2004


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