Until recently, most investors or buyers would never have thought about Canada being an important producer of diamonds. Most people's knowledge of diamonds was fixed on mining operations in Africa and the diamond trading centers in Europe – notably the
Antwerp Diamond District in Belgium.
But things started to change in the early 1990’s when two geologists, Chuck Fipke and Stewart Blusson, discovered evidence of diamond-bearing
kimberlite pipes about 320 kilometres north of Yellowknife in the Northwest Territories – a rough, remote area to say the least. One of these pipes was developed by BHP Billiton into the
Ekati Diamond Mine which produced Canada's first commercial diamonds in 1998.
(Ekati Diamond Mine – note 3 open pits in foreground. Airport far left, with another pit just above it in the distance. Image provided by Wikimedia Commons.)
A Brief Timeline
BHP commenced collection of baseline environmental data for the NWT Diamonds project area – which later became Ekati – in 1993. It submitted an environmental impact statement (EIS) for the NWT Diamonds project to the federally-appointed Environmental Assessment Review Panel in 1995. The Canadian Government approved the development of the NWT Diamonds project in November 1996.
Construction of the mine began in 1997, after reaching an environmental agreement with the Canadian Government and the Government of the Northwest Territories.
The NWT Diamonds project was renamed the Ekati Diamond Mine project in 1998. Open pit mining operations began in August 1998 at the Panda pipe, which continued up to 2003.
Fast-forward 25 years with opening of Gahcho Kue – one of the 10 biggest diamond mines in the world and Canada’s sixth operation. The mine began commercial production in March 2017. The $1-billion project is expected to produce about 4.5 million carats, or 900 kilograms, of diamonds a year.
De Beers owns 51 per cent of the mine, with the rest belonging to Mountain Province Diamonds (
TSX:MPVD).
Diavik was the second diamond mine in Canada to produce diamonds. Rio Tinto PLC owns a 60 percent stake in the mine through their Diavik Diamond Mines subsidiary. Dominion Diamond Mines ULC owns the remaining 40 percent stake in the mine through their Dominion Diamond Diavik Limited Partnership. Operations at the mine are managed by Diavik Diamond Mines.
Despite the growth in mining operations (cumulative production to January 2017 has totalled approximately 67.8 million carats) there’s no guarantee of success. Out of the six diamond mines that have opened, two have had to shut down ahead of schedule.
De Beers closed its Snap Lake mine late last year because of operational problems after spending more than $2.2 billion on it. Tahera Diamond Corp. was forced to shutter its Jericho mine in 2008 because of budgetary and mining issues.
Despite the bumps in road for the industry, last year, Canada was the fifth largest diamond producer in the world by volume and third largest by value out of 21 countries tracked by the
Kimberley Process – an organization that monitors the industry.
Other Canadian diamond miners have instead focussed their attention towards mining operations in more traditional diamond mining jurisdictions – like South Africa.
Kelowna BC-based
Diamcor Mining Inc. (
TSX-V:DMI,
OTC:DMIFF,
Forum) recently brought on a new operational team to refine the processing facilities at its Krone-Endora project in South Africa. As part of an evaluation of the plant, the team processed historical tailings and previously stockpiled material, identifying areas for improvement. The company reports new operating procedures are being implemented as a result.
The Company sold 6,055.28 carats of rough diamonds, generating total gross proceeds of just over US$693,000, resulting in an average price of US$114.51 per carat. This brings the total rough diamonds delivered and tendered thus far in the Company’s third fiscal quarter, ending December 31, 2019, to 10,088.29 carats, generating over US$1.1 million in revenue.
That’s a lot of bling. And a lot of potential upside for investors looking to get in on the ‘shine’.
FULL DISCLOSURE: Diamcor Mining Inc is a paid client of Stockhouse Publishing.