- Rough Diamond Prices have rebounded strongly in the aftermath of the Global Financial Crisis as global mined production continues to decrease at a compound annual growth rate (CAGR) of 3.7 % since peaking in 2005.
- The geological requirements for diamond formation have restricted the mined production of rough diamonds to a handful of countries. Canada has geopolitical, regulatory, and infrastructure advantages over other large producers for exploration enterprises.
- In general, the reputation of Canadian diamond deposits--especially in the Slave district, NWT--is one of above average grades containing good quality gems. Zimtu expects diamond exploration & development to materially increase over the medium term time horizon.
All hell for a basement?
Diamonds, crystallised carbon, are the hardest naturally occurring material. The optimal environment for the formation of diamonds requires consistent heat and pressure, which is found beneath stable thick parts of the earth’s crust known as cratons. Most primary (non-alluvial or coastal) diamond discoveries are hosted within rock formations older than 2.0 billion years. Diamonds form at depths greater than 160 km below surface and are brought to the surface through violent volcanic activity that has occurred at various intervals through geologic time. During ascent through the lithosphere (upper mantle and crust), the potentially diamond infused magmas accumulate minerals known as KIMs (kimberlite indicator minerals). Kimberlite, an ultrabasic igneous rock made up of at least 35% olivine, form as their volatile rich magmas cool upon their emplacement into the surface and near-surface environment, commonly in the shape of a pipe or champagne flute, and sometimes in the shape of a champagne coupe (as in Saskatchewan).
Kimberlites occurring in the Canadian tundra have been affected by the erosion dynamics of continental glaciers during the period of Pleistocene glaciation, which only receded over the last twenty thousand years. These erosion dynamics have in effect smeared these KIMs hundreds of kilometers from their source kimberlite intrusions, distributing evidence of that source as a ‘mineral train’ of fragments that follows the movement of the ice away from the intrusion. Exploration geologists attempt to delineate and follow the KIMs back to the kimberlite by pattern sampling of soil and till (glacial deposits), and recovering the KIMs by laboratory processing of the samples.
Since not all kimberlites are diamond bearing, geologists refine their searches by analysing the KIM grains for their chemistry, which they then assess using industry standard mineral chemistry plots so as to rank those KIM trains to increase their chances of discovering kimberlites that may host diamonds. Kimberlites tend to occur in “clusters” of intrusions of similar geologic age, with multiple proximate clusters referred to as a kimberlite field. A good primer on kimberlites may be found on the Natural Resources Canada website.
There are many reports that focus in depth on the chemistry of indicator minerals. However, the simple fact is that the odds of discovering an economic diamond deposit are low, even when kimberlites are being found. Globally, approximately 20% of kimberlites are diamondiferous (i.e. containing some diamonds, including microscopic diamonds that the industry refers to as micro diamonds), with roughly 1% of all kimberlites discovered hosting an economic diamond deposit. The odds in Canada, though still poor, are materially above the world norm. As of 2002, over 50% of kimberlites discovered in Canada were diamondiferous; while Lac de Gras had recorded a prodigious 5% of all kimberlites discovered to host an economic diamond deposit. Clearly, diamond exploration is not for the faint of heart and presents significant risk for even the most seasoned geologist.