About 30 years ago, the Ellendale diamond prospects in the West Kimberley launched Australia’s first diamond boom.
About 30 years ago, the Ellendale diamond prospects in the West Kimberley launched Australia’s first diamond boom.
Now, after many years of relative neglect, the area is once again playing a crucial role in a second wave of diamond industry growth.
It’s also the area where Australia’s only locally-owned diamond producer is pinning its hopes.
Industry analysts are watching with interest the activities of West Perth-based Kimberley Diamonds, which secured rights for the area after placing a claim on the Ellendale tenements in 1993.
CRA Diamonds discovered the first Ellendale economic pipes in the late 1970s.
However, upon the discovery and development of the Argyle Diamond mine, the company shifted its focus away from Ellendale, which then remained under explored, until Kimberley placed a claim on the tenements.
Following a legal dispute with CRA, Kimberley gained control of the tenements in 2001 and began exploration and development in the Ellendale field.
Kimberley, which listed on the Australian Stock Exchange in 1993, also bought all of Argyle’s exploration data for $25 million – a debt that was fully repaid earlier this year.
Kimberley managing director Peter Danchin said the company was now mortgage free and debt free and was focused on developing the Ellendale diamond field, particularly its Ellendale 9 pipe.
The company is also conducting feasibility studies on its Ellendale 4 pipe with results due in August.
Further, in May this year, Kimberley announced that bulk sample results indicated that its Kimberley 28 pipe could be mined economically.
Although relatively small, the Kimberley 28 pipe has an estimated grade of 5.07 carats per 100 tonnes and an average value per carat of around $US300.
Kimberley also owns a 55 per cent share in Blina Diamonds, which it has spun-off into a separate exploration company and is hoping to raise $10.4 million.
Blina is looking to issue up to 34.7 million shares at 30 cents a share to fund exploration at the Ellendale diamond field.
Blina managing director (and Kimberley’s former exploration manager) David Jones said Blina’s tenements covered at least 50 known lamproite pipes.
Kimberley is now nurturing a reputation for producing small, premium-quality diamonds, particularly yellow ‘fancy’ diamonds.
The good news for the company is that the stones produced so far are exceeding early valuations.
Research provided by brokers Patersons indicates a weighted average diamond price for Ellendale 9 of $US220 per carat, whereas the average prices estimated to be received for stones from Ellendale 4 is $US79/carat. Patersons research analyst Alex Passmore said the stones from Ellendale 4 were, on average, 78 per cent smaller than those from Ellendale 9, which was the major cause of the disparity in the diamond prices.
Kimberley’s Peter Danchin was lured to WA from his native South Africa (where he worked for many years at South African diamond miner Trans Hex) by the excitement of opening a new diamond mine.
“The diamond business is a very hard business. It is very traditional and very tight,” Mr Danchin told WA Business News.
“To open up a mine in a new diamond field is a once in a life time opportunity; it’s very exciting.”
