It’s a political border, not a geological one, that puts the two great diamond discoveries on the Karelian craton on the other side of the frontier from Finland.
Karelia itself is a region which straddles the Finland-Russia border, and thus far, the really major diamond discoveries have been on the Russian side.
But there have been smaller diamond discoveries in Finland too, one of which, Lahtojoki, is now in the hands of Karelian Diamond Resources PLC (LON:KDR), a company run by well-know resources entrepreneur Professor Richard Conroy.
Professor Conroy’s had success in the past in the Irish zinc space as well as in oil and gas, and he’s just cut a very interesting-looking deal on a potential gold district in Ireland that could host more than eight million ounces.
But amongst all these activities, he’s also had a long-standing interest in Finland that dates back to the times when it was almost impossible to go exploring there. A relationship with Finnish mining giant Outokumpu goes back decades, and the Professor has long had a deep respect for the abilities of the Finnish geological survey, the work of which has in turn elucidated the decisions that Karelian has made.
In addition, Karelian had for many years a confidentiality agreement with back in rights with Rio Tinto.
All of which means that Karelian has acquired a long-term knowledge base that’s second to none when it comes to diamond juniors operating in Finland, and one which the Professor is hoping to turn to good account in the months and years ahead.
After all, the precedent is there for all to see.
“The Lomonosov and Grib kimberlite pipes are coming into production just across the border,” points out Conroy.
“And there’s nothing to say you couldn’t have the same situation in Finland. The area in question is a similar size to the famous Slave Lake district in Canada, but the amount of exploration that’s been done here compared to Slave Lake is minimal. We’re confident it’s an area where you could find a world class diamond mine.”
That’s the long-term vision – to find a major diamondiferous and economic kimberlite pipe that’s analogous to Grib or Lomonosov.
In the more immediate term though, the focus is on Lahtojoki, which is known to contain around two million carats, and which may also contain a useful amount of coloured stones.
“It should make a small, but profitable mine,” says the Professor.
He reckons the percentage of pink diamonds at Lahtojoki could sit at around 3% and, given the desirability of coloured stones in the market today, that could make a useful impact on the economics of any potential mine.
The price tag for such a mine wouldn’t be prohibitive – the Professor reckons that it would take between US$25mln and US$30mln to get into production. In project finance terms, that’s a fairly small amount, although it still looks a big heft for Karelian. But consider the deal the Professor has just done with his other company Conroy Gold (LON:CGNR). There, he’s managed to draw in a company with significant cash resources to help work up what’s at present a relatively small resource.
Could that pattern be repeated again? If it was, Lahtojoki would be the first diamond mine in Europe outside of Russia, so it would be a trailblazer on that score alone. A big hit on the wider exploration effort would really take the company up a tier. But for now, there’s plenty to be getting on with. A mini-bulk sample at Lahtojoki is planned, and newsflow is likely on that shortly.