Diamond explorers are flocking to the Kimberley as sparkler sales recover
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The number of junior ASX-listed explorers on the hunt for diamonds in Western Australia is on the rise as global sales of the sparkling gems picks up.
A government diamond report released earlier this year sparked a flurry of new exploration for diamonds in WA’s Kimberley region, says the State’s mining minister Bill Johnston.
The Kimberley is well-known for its diamonds and is often called Australia’s diamond exploration “hot-spot”.
The Geological Survey of WA recently reviewed data from more than 88,000 diamond exploration samples and 30,000 high-quality mineral chemical analyses — which explorers are now poring over, Mr Johnston says.
And their timing looks good.
The world’s leading diamond miner, Russia’s Alrosa, is reporting a turnaround in diamond jewellery sales.
Polished diamond prices were last year on a downward trend reflecting soft consumer demand in key markets.
But Alrosa says polished diamond sales grew 7 per cent in the first three months of 2018 “as all key markets enjoyed rising sales on the back of a stronger consumer sentiment and a better macro environment”.
The trend continued in the most recent quarter “in particular in the USA, Europe and China”, Alrosa reported last week.
Focus on the Kimberley
One of the first ASX explorers to move on the new data was Perth-based DevEx Resources (ASX:DEV) which bought a plot of land based on the government report and applied for eight exploration licences.
The licences span 2700 sq km between Rio Tinto’s Argyle mine and the former Ellendale mine once owned by Kimberley Diamonds.
Rio’s Argyle mine is one of the world’s largest suppliers of diamonds — and the world’s largest supplier of natural coloured diamonds.
Until its closure in 2015, Ellendale produced more than 50 per cent of the world’s fancy yellow diamonds.
At one stage Argyle and Ellendale together accounted for a third of global annual production.
DevEx’s landholding also lies to the south of Lucapa Diamond’a (ASX:LOM) Little Spring Creek prospect, where diamonds were discovered in drilling earlier this year.
DevEx believes there is a good chance that its “Oscar” project could host a system similar to the Ellendale mine.
The resurgence of interest in the Kimberley also follows encouraging exploration by India Bore Diamond Holdings and POZ Minerals (ASX:POZ).
POZ recently expanded its Blina diamond project with the acquisition of 285 sq km of new ground surrounding the former E9 diamond mine at the Ellendale operation.
The company has granted mining and exploration leases over 40km of diamond-bearing alluvial channels.
POZ says its Terrace 5 prospect has previously produced a significant number of highly prized “fancy yellows”, up to 8.43 carats.
Diamonds aren’t forever
Australia desperately needs to develop more diamond mines.
By the end of 2016, the country’s diamond reserves had fallen by a huge 45 per cent, according to the federal government.
Aussie diamonds would be exhausted within eight years at current production rates.