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New player set to sparkle in Kimberley diamond stakes

LAST week’s announcement that a new diamond mine could be operating in WA’s Kimberley region within two months will put an end to the local dominance of Argyle Diamond’s owner Rio Tinto.

The diamond industry has been undergoing somewhat of a renaissance, particularly in the Kimberley region, since the WA Government first indicated it would excise part of the land holding that had been sitting idle for more than 20 years as part of the Argyle Diamond tenements.

Kimberley Diamonds agreed to compensate Rio Tinto $23 million for the Ellendale tenement and, after sinking little more than $2.6 million into exploration and plant, will be facing the healthy prospect of generating $63.4 million in revenue per annum based on the newly-released completed feasibility study.

The study, undertaken by Snowden Mining Industry Consultants Pty Ltd showed that an increased processing rate of 715,000 tonnes per annum could be achievable with minimal cost. Stage one of the operation, which targets Ellendale Pipes 4 and 9 to a depth of three metres, could recover an estimated 227,194 carats and an average value of $US99.51/carat, with prices varying considerably between the two pipes.

Armed with a project that

is viable for exploitation, Kimberley Diamond chairman Miles Kennedy is already knocking on potential buyers’ doors.

“Our marketing team is currently conducting a valuation marketing program in major international diamond centres, and the feedback has been most encouraging – suggesting that the 10 per cent increase in values for Pipe 9 diamonds referred to in the feasibility study is achievable,” Mr Kennedy said.

“The value differential between Pipe 9 and Pipe 4 diamonds (average US$132/ carat compared with $US79/ carat) is mainly due to the smaller size distribution in Pipe 4. However, the Pipe 4 grades are higher, at 20.4 carats per hundred tonnes (cpht), com-pared with 10.3 cpht in Pipe 9.”

When the project moves ahead in May it will be the first Australian hard-rock diamond mine since Ashton Mining’s Northern Territory Merlin Mine, which started production in 1999.

But Kimberley Diamond is not the only one pushing for-ward. Striker Resources NL and joint venture partner AKD Limited also have been taking a stake in the industry.

AKD and Striker Resources last month announced that an agreement had been struck to provide South African diamond conglomerate DeBeers with a 12-month right to explore for diamonds within exploration licence E80/1590 at the Seppelt Range diamond project in the Kimberley.

Striker Resources has entered into a joint venture agreement with Canada’s Citation Re-sources Inc over tenements that hosts the Ashmore and Seppelt kimberlite pipes, about 80 kilometres northwest of the Berkeley joint venture.

Investors also have taken an interest in new offerings. Late last month, South Australian company Flinders Diamond Limited, with exploration tenements in the Northern Territory, South Australia and WA, successfully completed a $3 million initial public offering.

Thundelarra Exploration has entered into a joint venture with BHP Billiton on the Phillips Range Diamond Project in the Kimberley, giving BHP-Billiton a 60 per cent stake in future earnings if it proceeds as sole funder of the project.

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