1992 — A LOOK BACK — Year of the diamond hunt

Without doubt, 1992 will be remembered within the industry as the year diamonds gripped the imaginations of prospectors and investors alike.

Slow to react at first, junior companies staked millions of acres to the north of Yellowknife, N.W.T., after partners Dia Met Minerals (TSE) and BHP Minerals Canada announced the discovery of 81 small diamonds at the Point Lake project in November, 1991.

Soon, more international heavyweights, including Kennecott, Monopros and Australia’s Ashton Mining joined the play. The fever spread to Ontario, Quebec, Saskatchewan and Alberta, where both kimberlite and an associated diamond host, lamproite, are known to occur.

In early spring, a 160-ton bulk sample taken from the Point Lake pipe by the Dia Met-BHP team yielded diamonds weighing a total of 101 carats. A quarter of these were reported to be gem quality and some of the larger stones weighed 1-3 carats.

The news reignited the play and by November, the Northwest Territories land grab had swelled to 32 million acres (including claims yet to be recorded), or an area roughly the size of England.

On Nov. 9, Dia Met — which traded as a Vancouver penny stock in 1991 — listed on The Toronto Stock Exchange at $25 with 9.95 million shares issued and outstanding.

But as Canadian companies crept up the learning curve, mistakes were inevitable. The first one was a real doozer. After announcing that “canary yellow” diamonds with perfect crystal structure had been recovered from a hole on their Tenby claims near Lac de Gras, the

Aber-Commonwealth-SouthernEra consortium had to retract its statement when the stones turned out to be synthetic diamonds loosened from the drill bit. It seems the caustic solution used to separate the diamonds from the rest of the rock had turned the synthetic green diamonds to yellow and removed all trace of the drill bit rind.

But all was not lost.Three of the microdiamonds — two clear white and one bluish-green stone — turned out to be natural.

As if to close the year on a high note, Dia Met truly dazzled the investment community when it announced that all nine of the kimberlite pipes found during its summer drill program had returned diamonds, including the all-important macrodiamonds. Two of the pipes look to be richer than the Point Lake pipe.

Between them, the Dia Met-BHP joint venture and the Aber team have confirmed the presence of 17 kimberlites near the shores of Lac de Gas. Monopros is rumored to have found two.