Australia's Gibb River Diamonds is preparing to restart the mothballed Ellendale diamond mine in the West Kimberley after being granted three key mining leases.
The permits mark a significant step in reviving production at Ellendale, which until its closure in 2015 was one of the world's largest diamond mines, producing more than 50% of the world's fancy yellow diamonds.
According to Gibb River, the leases cover the main portions of the historic workings at the E4 and E9 pipes, as well as the extensively bulk-sampled E12 alluvial deposit and access roads.
A heritage clearance survey is scheduled for early June. The company is also studying financing options for the project, including debt, equity, earn-in partner, joint venture partner, a North Australian Infrastructure Fund (NAIF) partnership, or other government funding schemes available.
The exploration and development company became the sole owner of Ellendale in March last year after acquiring the project from Burgundy Diamonds. The company's shares soared on the news, closing 48% higher. This will give Gibb River Diamonds a market capitalization of $4.4 million.
Opened in 1976, Ellendale, located 135km east of Derby in the western Kimberley, was once the world's largest manufacturer of fancy yellow diamonds and had an exclusive supply agreement with Tiffany & Co. Since the early 2000s, 1.3 million carats have been produced there. After the closure of Ellendale, during exploration by Gibb River Diamonds in 2017, an unusual canary-colored stone weighing 8.43 carats was discovered. It became one of the largest of its kind mined in the country.
At the end of March 2021, Gibb River sold the mine to Burgundy Diamond Mines for A$6.7 million and 4 million ordinary shares. However, two years later, in March 2023, Burgundy Diamond Mines decided not to pursue an option to explore several existing leases covering the former E9 and E4 hard rock pits and the previously mined alluvial deposits known as Terrace 5 in the western part of the Ellendale deposit, and handed back all rights to these leases to their previous owner, Gibb River Diamonds. Plans to begin mining the previously abandoned Terrace 5 alluvial deposits have been delayed pending further evaluations by Gibb River Diamonds.
Hélène Tarin, Editor in Chief of the Asian Bureau, Rough&Polished
