Baffin island in Canada's north- the site of many diamond discoveries

By Leia Michele Toovey- Exclusive to Diamond Investing News

Canada has become a hot bed of diamond mining activities in recent years. Not only are diamond mines in Canada finding top quality gems, Canadian diamonds are increasing in popularity due to the stigma of “conflict diamonds” attached to the gems that come from overseas.

To step up to the plate, Canada’s diamond industry has launched an initiative to establish the country’s first diamond bourse. A working group consisting of members of the Canadian Jewellers Association and the Diamond Manufacturers Association of Canada has been established. This group initiated a feasibility study to examine the viability of establishing a bourse in Canada at this time. The study will look at-setting up a diamond industry database consisting of potential members of the bourse, establishing efficient communication channels within the industry, the economic viability of the bourse, and an implementation plan outlining a recommended model to establish the bourse.  To find out more of the study, interested parties can visit the website www.boursestudy.ca.

Discovery of diamonds in Canada continues. Peregrine Diamonds Ltd (TSX:PGD) announced this week, a new diamond discovery at the estimated six hectare CH-1 kimberlite on the Chidliak property in Baffin Island, Nunavut, Canada. An upgraded discovery by the way of a second outcropping kimberlite, estimated to be three hectares in size, was discovered 1.5 km from CH-1.

Representative surface samples from two different CH-1 kimberlite units, were processed for diamonds by caustic fusion at the Saskatchewan Research Council Geoanalytical Laboratories. The first sample weighed 94.9 kg and returned 146 diamonds larger than the 0.075 mm sieve size, including 10 diamonds larger than the 0.600 mm sieve size; an indication of a very favourable coarse diamond size distribution. The second sample weighed 100.0 kg and returned 44 diamonds larger than the 0.075 mm sieve size including two diamonds larger than the 0.600 mm sieve size.

The recent developments at Chidliak have been extremely encouraging.  This new discovery helps cement Chidliak as a valuable new Canadian diamond district. The coarse diamond size distribution in the samples indicates the potential for large commercial-size diamonds in CH-1 and by inference, other kimberlites in the district.

Globally, the diamond market continues to look strong. Diamond Trading Company (DTC), a marketing arm of De Beers, has increased its supply of diamonds in August as compared to the  previous month. The August supply is valued at an estimated US$725 million. This new calculation makes August the largest month of the year when it comes to De Beer’s diamond sales. Just last week, DTC  reported on how it had raised the roughs prices by an average 5 per cent in July, and that it had increased prices by a cumulative 16 per cent on average for the year including the August sight. Some purchasers responded that the use of the word “average” was misleading and that larger, better quality goods were up 25 per cent to 30 per cent for the year. The company saw no softening in negotiations or in demand, noting, “Sight holders were still asking for more goods.” DTC expects demand to remain strong for the rest of the year as weakness in the US would be offset by other aggressive markets, said a company spokesperson.

August advance in purchases is likely to signal the start of manufacturers gearing up for the Christmas season. Sight holders in India have approximately one month of manufacturing left before they close for holiday.  Purchases for the Christmas season are also likely to be reflected in September’s calculations.

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