Diamond hunt on in Kimberley

DIAMOND exploration in the Kimberley region has taken another leap forward with Flinders Diamonds Limited planning to spend $900,000 over the next two years searching for the precious gem in the Skeleton Flat area, 200 kilometres south-west of the Argyle Diamond mine.

To finance the project, Flinders Diamonds hopes to raise up to $8 million in one of Australia’s largest diamond floats since the early 1990s.

The offer, which opens on July 30, includes the issue of 40 million 20-cent shares with a minimum subscription of $5 million.

The Skeleton Flat exploration project will form part of a proposed $4.3 million exploration program which includes an area north-west of Alice Springs and four sites in South Australia, all contained within 20 exploration tenements covering a total area of 14,600 square kilometres.

“We have built up a highly prospective portfolio of diamond tenements and are hopeful of establishing a new commercial diamond mine in Australia,” Flinders Diamonds managing director Kevin Wills said.

“While the Skeleton Flat project area is the smallest holding within our tenement package, it is one of the most prospective.”

Dr Wills said previous exploration had located kimberlitic indicator minerals, diamonds and at least nine small kimberlite sills and dykes.

The announcement caps of a busy period for the diamond industry.

In June, the Kimberley Diamond Company NL gained the Ellendale Mining Area from Argyle Diamond Mines after the State Cabinet gave it a tick of approval.

Under the agreement with Argyle, Kimberley Diamond will pay $23.5 million by the end of the year for the tenement.

Kimberley Diamond director Karl Simich said Argyle Diamond had been sitting on the area for the past 20 years. He said the tenement was of a scale which was too small for a major player such as Argyle Diamond.

Another player, Conquest Mining Limited, commenced a major sampling program on the company’s Lower Smoke River tenement, which is adjacent to Bow River and Argyle along with joint venture and farm-in partner Astro Mining NL.

George Savell, chief executive of the Association of Mining and Exploration Companies said vast advancements in technology like the adoption of the BHP falcon system has opened the door for more companies to take another look at their tenements, although the risks were still high.

He said while it was possible to find pipes holding diamonds, in many cases the pipes did not hold enough diamonds or lacked the quality to make mining viable.

Mr Simich said substantial changes were taking place in the diamond industry with De Beers losing some of its grip on the market and some miners vertically integrating so that they controlled the diamonds from production to the retail store.

He said typically if a miner received a dollar for a diamond, by the time it hit the streets it would be worth $10. Many miners were now cutting, polishing and selling their own diamonds and keeping more money in their own pocket.

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