Desmond’s Canadian diamond investment adds 50pc
MOUNTAIN Province Diamonds, the Canadian gem explorer backed by Dermot Desmond, has said its biggest asset — a stake in the world’s largest new diamond mine, Gahcho Kue — is on track to enter commercial production by the first months of 2017.
Mountain Province has 49pc of Gahcho Kue, which is located in the Canadian Northwest Territories. The remaining 51pc is owned by De Beers gem group, the world’s biggest producer.
“Successful plant commissioning and the start of ramp up to production at the world’s largest new diamond mine is a major achievement for the Gahcho Kue joint venture and a tribute to the operating partner De Beers Canada,” said chief executive Patrick Evans.
The company’s share price has risen by about 50pc in the year to date. Financier Desmond owns around 23pc of the company, according to Bloomberg. He also owns around 23pc of Kennady Diamonds, which controls 100pc of the nearby Kennady North diamond project.
Mountain Province also reported the finding of the two gem quality “special” diamonds at Gahcho Kue during preparations for commercial production.
A 12.10 carat diamond was recovered on July 29 and a 24.65 carat diamond recovered on August 1. The company’s first diamond sale is expected to take place before the end of 2016.
Gahcho Kue is projected to produce an average of 4.5m carats a year over a 12-year lifespan. There has not been a major new diamond mine in almost two decades.
Diamond prices appear to be on the up. In April, De Beers raised them for the first time in more than a year in a sign the industry may be recovering from its biggest slump since the 2008 financial crisis. Prices fell 18pc in 2015, pushed down by China’s slowdown and an industry-wide credit crunch. That prompted big producers such as De Beers and Russia’s Alrosa PJSC to choke off supply to the market to try and bolster prices.
Turning to exceptional gems, the biggest diamond found in more than 100 years recently proved too rich for even the deepest wallets at an auction in London.
The 1,109-carat diamond called Lesedi la Rona, or “our light” in the Tswana language spoken in Botswana where it was found, was expected to sell for about $86m, based on a diamond sale in May. That would have made it the most expensive rough gem on record. Instead, the highest bid of $61m didn’t clear the so-called reserve price at a Sotheby’s auction in June, leaving it unsold.