What makes a diamond exploration company happy? “Finding diamonds” is the obvious answer, but reality is rarely this simple. A new piece on Resource World explains some basic concepts in diamond mining.
Economically viable diamond mines, Resource World explains, “are generally small even though they are commonly shallow deposits mined by open pits”. Larger diamonds are naturally much more valuable than smaller diamonds. Consequently, “two diamond deposits with the same grade, which contain different proportions of large stones, will vary significantly in their value per tonne of ore”.
As a general rule of thumb, 1 carat/tonne of ore is viewed as “high-grade”. Diamond pipes, usually comprised of a rock called kimberlite which gushed up from deep in the earth carrying diamonds, can be mined by open pits. Then, if the grade is high enough, they can also be mined from underground. The diamonds that are carried in the pipes are found in what are called “diamond stability zones”.
Another rule of thumb is to have a minimum of one diamond per kilogram sample. “In early stage diamond exploration, values are presented as a diamond count rather than a grade”, for example: Diamonds North Resources reported results of 551 diamonds in an 81.75 kilogram sample, for a diamond count of approximately seven diamonds per kilogram sample. If we apply the rule of thumb mentioned above – this is seven times greater, and the company’s stock naturally soared a day after the news came out.