Even though prospecting for diamonds in Canada no longer elicits the electrifying buzz of the 1990s when juniors were uncovering the country’s first diamond mines, the rationale for exploration is just as strong today, according to veteran explorer Grenville (“Gren”) Thomas.
“There’s hardly anyone out there exploring for diamonds and there aren’t any large deposits that have been discovered in the past 10 years that can feed even average demand,” said the chairman of North Arrow Minerals (TSXV-NAR) from his hotel room in London, where he was attending The Northern Miner’s Canadian Mining Symposium in April. “We’ve discovered a few things that under normal circumstances would have generated a lot of ink. But investors’ minds are elsewhere.”
The 77-year old Thomas is referring to North Arrow’s discoveries of kimberlite on the Loki project in the Lac de Gras mining camp of the Northwest Territories, rare and valuable yellow diamonds at the Naujaat project in Nunavut where a preliminary economic assessment (PEA) is ongoing, a new diamondiferous kimberlite field at the Mel project, also in Nunavut, and 10 discrete kimberlite bodies at the Pikoo project in Saskatchewan.
Thomas became a legend practically overnight when his company, Aber Resources, discovered the Diavik diamond mine under Lac de Gras in 1994. His daughter Eira — now a rock star in her own right but a newly minted geologist at the time — was supervising the last drill hole on the frozen lake before spring break-up when the drillers pulled a kimberlite core with a 2-carat diamond embedded in it, an extraordinary exploration outcome.
Thomas is pleased with his daughter’s career trajectory since then, including her founding of Stornoway Diamond (TSX: SWY) — now in production with the Renard mine in Quebec — and her recent appointment as CEO of Lucara Diamond (TSX-LUC).
“There was a foreignness and romance to diamonds in Canada when the industry first started 25 years ago. Now they are part of the Canadian fabric. She was there at the beginning and has grown along with (the industry),” said Thomas, who expects his daughter’s leadership role at Lucara, owner of the Karowe diamond mine in Botswana, will present interesting new challenges as the producer adopts cloud and blockchain technologies to modernize the diamond supply chain.
The Diavik mine opened in 2003 and continues to produce 6-7 million carats of predominantly large, white gem-quality diamonds for Rio Tinto (NYSE-RIO) (60%) and Aber descendant Dominion Diamond (40%). In a surprise move, private conglomerate Washington Companies purchased Dominion — which also owns 90% of the Ekati diamond mine — last year when the company was rudderless and vulnerable, having lost its CEO Bob Gannicott to leukemia.
Thomas did not mask his disappointment about the takeover of the company he founded with Gannicott so many years ago.
“Dominion is the third largest diamond company in the world and the largest in Canada, so it didn’t make me very happy when it became an American private company,” said the PDAC’s 1999 Prospector of the Year, who began his career as a 16-year old coal miner is his native Wales, but has been exploring in the Canadian tundra for decades since landing here in the 1960s.
Thomas believes the diamond industry has changed fundamentally over the past 15 years because of a combination of factors, including the creation of lab-grown diamonds that are difficult to distinguish from natural ones, the dismantling of the De Beers cartel that maintained both mystique and market price, and changes in fashion as some millennials shun material possessions. A cash crunch caused by currency reforms in India, where 90% of the world’s rough diamonds are cut, polished or traded, has also disrupted the market.
Still, De Beers and Alrosa — the two largest producers of natural diamonds — collectively sold almost $10 billion worth of the stones in 2017, according to diamond analyst Paul Zimnisky.
“People are still buying diamonds and the market is starting to firm so we view the industry quite optimistically,” said Thomas. “We’ve got some brand new areas to explore. Who knows what we’ll find there.”
— This article originally appeared in the June 2016 issue of Diamonds in Canada magazine.