Massive 68-carat Diamond Found at Gahcho Kue Mine

The gem is the largest found since the mine opened six months ago.

massive diamond

Just six months after beginning to ramp up production, workers at the Gahcho Kue diamond mine have discovered a large 68-carat diamond, the biggest found since the mine opened.

The mine, located about 280 kilometers east of Yellowknife in Canada’s Northwest Territories, launched in September last year and is the world’s highest-grade new diamond operation in the last 13 years.

Mountain Province Diamonds (TSX:MPV,NASDAQ:MPVD) holds a 49-percent stake in the mine and is its co-owner along with top diamond producer De Beers, owned by Anglo American (LSE:AAL).

“The recovery is very encouraging,” said Patrick Evans, Mountain Province’s president and CEO, in a press release. He added that the mine is on track to achieve commercial production during the first quarter of 2017 “despite some recent disruptions caused by extremely cold conditions.”

Discovered in 1995, Gahcho Kue took more than $1 billion to develop, and is estimated to be one of the world’s 10 biggest diamond mines. It is also the sixth precious rocks operation to open in Canada in the 18 years that the country has mined diamonds.

So far the mine has provided a $341-million boost to the economy of the Northwest Territories, and has contributed a further $272 million to the rest of Canada, according to De Beers.

“Canada is very important, as it’s the most stable jurisdiction for diamond miners (with) considerable exploration potential,” said Evans, adding that Gahcho Kue produces about 10 percent of world diamond output by volume, and some 15 percent of value.

Gahcho Kue could become De Beers’ only producing diamond mine in Canada in early 2019. It is slated to produce about 4.5 million carats a year over its estimated 12-year life span.

The mine is expected to be an asset for both Mountain Province and De Beers in the coming years. As De Beers CEO Bruce Cleaver said late last year, “[a]s millions of new consumers enter the middle classes in the coming years, consumer demand for diamond jewellery is set to see continued medium to long term growth. Gahcho Kué, our largest ever mine outside of southern Africa, will help to meet this increasing demand.”

In January, approximately 49,420 carats were sold at an average price of $127 per carat at the first Gahcho Kue diamond sale. The company’s second sale of diamonds will take place in Antwerp from February 20 to March 1.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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