Karelian clears hurdle for EU’s first diamond mine

Karelian Diamond Resources (LSE: KDR) has registered its Lahtojoki mining concession in the Finnish land registry, advancing its plan to develop what could become the European Union’s first diamond mine.

This registration, handled by the Finnish mining authority TUKES, allows the company to proceed with further development plans for the Lahtojoki diamond deposit, which is known for its high-quality gem diamonds. 

Shares in Karelian Diamond Resources more than doubled on Thursday to 1.2 pence apiece in London, valuing the company at £1.97 million.

A legal hearing concerning compensation issues (to landowners or impacted parties) has been postponed until this fall, potentially affecting the timeline for full-scale operations, according to Karelian. 

TUKES had previously approved the concession and is also responsible for issuing the mining certificate.

High quality

The project’s 2017 preliminary economic assessment identified about 2.11 million carats of recoverable diamonds over a 9-year mine life, with an estimated in-situ value of $211 million. Based on 95% plant recovery, this totals about 2.11 million carats.

The estimate was based on a non-JORC / non-NI 43-101 resource, meaning it has not been classified using the formal standards required for public reporting in many jurisdictions. It remains indicative only unless later updated via a compliant resource report.

Lahtojoki samples have shown rare pink and coloured stones that can fetch up to 20 times more than typical colourless gems. The company says the diamondiferous kimberlite pipe has the potential to support a profitable, low strip ratio, open-pit operation.

The Dublin-based company is simultaneously exploring and advancing other assets in Finland, containing nickel, copper and platinum group elements. It is also advancing exploration at a site in the Kuhmo region where it aims to discover the source of a rare green diamond it found in 2022.