Pink and red diamonds are among the most special gems in the world. The value of these highly sought-after natural stones speaks for itself, but their rarity has arguably increased since the closure of Rio Tinto’s (ASX:RIO,LSE:RIO,NYSE:RIO) Argyle mine.
The asset, which ceased mining activity on November 3, 2020, had been in operation since 1983. In that time, 865 million carats of rough diamonds were produced.
The unique geological chemistry of the Western Australia location birthed the rarest hues, including champagne, cognac, blue, violet and of course, the coveted Argyle pink and red diamonds. Millions of carats of white diamonds were produced at the prolific property as well.
After 37 years of output, Argyle’s closure came at a time of flux for the diamond market. The sector has been dealing with reduced demand caused by the COVID-19 pandemic, as well as shifting demographics.
While mining activity has concluded at the source of 90 percent of the world’s pink gems, diamond analyst Paul Zimnisky noted that Rio Tinto is likely still processing ore from Argyle.
“So (Argyle) diamonds will probably still be ‘produced’ this year,” he said. “Also, Rio may have some rough inventory overhang following all of the supply chain disruptions last year. But by the end of this calendar year or early next year, I think most of the primary market Argyle rough goods will be off the market.”
Colored diamonds, especially pink and red, are among the most valued gems on Earth. Prices can range from US$10,000 per carat for less intensely colored stones up to US$70,000 per carat for vivid hues.
Ahead of the Argyle closure, pink diamond prices were on the rise. According to the Fancy Color Research Foundation (FCRF), the value of pink diamonds rose 116 percent between 2010 and 2020. That’s more than any other colored diamond segment, including the extremely rare blue diamonds.
Even 2020’s disruptions and closures didn’t dent the rosy outlook for colored stones.
“The prices of all pink diamonds overall remained without a change in Q4 2020, with fancy and fancy intense categories presenting a slight increase,” a FCRF report states. “Although 2020 was challenging in terms of logistics and travel, contrary to market expectations, fancy color diamond prices proved to be resilient, with minor price decreases across the board.”
With as much as 95 percent of global pink diamond supply now removed, there is some anticipation that prices for the gems will continue to increase, perhaps at a faster rate.
“I think there are speculators out there making that bet,” said Zimnisky. “I believe Rio will be hosting one final pink diamond tender this year; I would imagine that demand will be fairly strong.”
There is already a growing buzz around pink diamonds. Earlier this year, American rapper Lil Uzi Vert had a 10 carat pink diamond surgically implanted in his forehead. The gem, which reportedly cost US$24 million, took the singer five years to pay off.
The musician took to Twitter (NYSE:TWTR) in late January to explain the purchase. “I’ve been paying for a natural pink diamond from Elliot for years now. This one Stone cost so much I’ve been paying for it since 2017. That was the first time I saw a real natural pink diamond. A lot of M’s in my face,” he wrote.
I’ve been paying for a natural pink diamond from Elliot for years now . This one Stone cost so much I’ve been paying for it since 2017. That was the first time I saw a real natural pink diamond. ♦️ A lot of M’s in my face 🤫 💰 💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰
— Uzi London 🌎☄️💕® (@LILUZIVERT) January 30, 2021
The rapper isn’t the only person taken by the rare pink gems. Rio Tinto’s last 2020 tender saw the gems experience double-digit price growth as participants from eight countries submitted bids.
“We are delighted with the results of the 2020 Argyle Pink Diamonds Tender, a testament to the unique Argyle ore body and its place in the history of the world’s most famous diamonds,” said Patrick Coppens, general manager of sales and marketing for Rio Tinto’s diamond business.
The interest has continued into 2021 as auction house Christie’s prepares to sell the Sakura diamond in Hong Kong. The centerpiece of an upcoming late May auction, the 15.8 carat Sakura stone is the world’s largest internally flawless purple-pink diamond.
The gem is expected to draw a large crowd, and sell for $195 million to $300 million Hong Kong dollars.
The Sakura diamond will be auctioned in Hong Kong on May 23, 2021. Image courtesy of Christie’s.
The heightened attention, paired with Argyle’s closure, is expected to bolster interest in the pink gems in the years to come.
“The effects of the closure of the Argyle mine will take some time,” explained fancy colored diamond analyst Yaniv Marcus. “I estimate it will take at least a year, there is another tender next year.”
He continued, “Only after that tender will we see a slowing surge in demand and price increase. For now, there are still many Argyle diamonds available.”
Argyle’s end of life was well publicized, spurring heightened interest in Rio Tinto’s pink diamond tenders. But Zimnisky stopped short of saying the inherent value of the mine’s gems has increased.
“It’s tough to say given how nuanced the rough market is, but it seems as if the rarest, most-desired Argyle goods have fared well in recent years,” said the diamond analyst.
For Marcus, it will take time for the mined goods to reach their full value.
“The value of the Argyle diamonds will take some time to really appreciate,” he said, referring to Rio Tinto’s December 2020 tender, which has been described as “record breaking.”
The Argyle Pink Diamonds Signature Tender 2020 “hero collection.” Image courtesy of Rio Tinto.
“Most of the buyers of the last tender really bid high prices, and therefore will have to wait for a real surge in demand before being able to sell their inventory for a profit,” he said.
Pink diamonds aren’t the only segment that has seen growth in the diamond sector. Challenges in the first half of 2020 saw demand dwindle, but there has been a steady uptick since July 2020.
“A strong recovery in diamond demand that was first seen in the second half of 2020 has continued into 2021,” said Zimnisky. “The Chinese New Year season, an important demand catalyst for the industry, was quite good, which has in part kept a bid in diamond prices in recent weeks.”
The sector’s bounceback is indicative of investment potential, according to Marcus.
“Although the Argyle mine produced some of the rarest pinks in the world, other investment opportunities exist,” he said. “Remember that even though pinks are rare, it is all about creating financial value over time, and there are opportunities right now that make more financial sense.”
Stay tuned for part two of this article, which will look at the other two diamond mines in Australia and what their future means for the market.
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network. All readers are encouraged to perform their own due diligence.
Pink and red diamonds are among the most special gems on earth. The value of these highly sought-after natural stones speaks for itself, but their rarity has arguably increased since the closure of Rio Tinto’s (ASX:RIO,LSE:RIO,NYSE:RIO) Argyle mine.
The asset, which ceased mining activity on November 3, 2020, had been in operation since 1983. In that time, 865 million carats of rough diamonds were produced.
The unique geological chemistry of the Western Australia location birthed the rarest hues, including champagne, cognac, blue, violet and of course, the coveted Argyle pink and red diamonds. Millions of carats of white diamonds were produced at the prolific property as well.
After 37 years of output, Argyle’s closure came at a time of flux for the diamond market. The sector has been dealing with reduced demand caused by the COVID-19 pandemic, as well as shifting demographics.
While mining activity has concluded at the source of 90 percent of the world’s pink gems, diamond analyst Paul Zimnisky noted that Rio Tinto is likely still processing ore from Argyle.
“So (Argyle) diamonds will probably still be ‘produced’ this year,” he said. “Also, Rio may have some rough inventory overhang following all of the supply chain disruptions last year. But by the end of this calendar year or early next year I think most of the primary market Argyle rough goods will be off the market.”
Colored diamonds, especially pink and red, are among the most valued gems on Earth. Prices can range from US$10,000 per carat for less intensely colored stones up to US$70,000 per carat for vivid hues.
Ahead of the Argyle closure, pink diamond prices were on the rise. According to the Fancy Color Research Foundation (FCRF), the value of pink diamonds rose 116 percent between 2010 and 2020. That’s more than any other colored diamond segment, including the extremely rare blue diamonds.
Even 2020’s disruptions and closures didn’t dent the rosy outlook for colored stones.
“The prices of all pink diamonds overall remained without a change in Q4 2020, with fancy and fancy intense categories presenting a slight increase,” a FCRF report states. “Although 2020 was challenging in terms of logistics and travel, contrary to market expectations, fancy color diamond prices proved to be resilient, with minor price decreases across the board.”
With as much as 95 percent of global pink diamond supply now removed, there is some anticipation that prices for the gems will continue to increase, perhaps at a faster rate.
“I think there are speculators out there making that bet,” said Zimnisky. “I believe Rio will be hosting one final pink diamond tender this year; I would imagine that demand will be fairly strong.”
There is already a growing buzz around pink diamonds. Earlier this year, American rapper Lil Uzi Vert had a 10 carat pink diamond surgically implanted in his forehead. The gem, which reportedly cost US$24 million, took the singer five years to pay off.
The musician took to Twitter (NYSE:TWTR) in late January to explain the purchase. “I’ve been paying for a natural pink diamond from Elliot for years now. This one Stone cost so much I’ve been paying for it since 2017. That was the first time I saw a real natural pink diamond. A lot of M’s in my face,” he wrote.
I’ve been paying for a natural pink diamond from Elliot for years now . This one Stone cost so much I’ve been paying for it since 2017. That was the first time I saw a real natural pink diamond. ♦️ A lot of M’s in my face 🤫 💰 💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰💰
— Uzi London 🌎☄️💕® (@LILUZIVERT) January 30, 2021
The rapper isn’t the only person taken by the rare pink gems. Rio Tinto’s last 2020 tender saw the gems experience double-digit price growth as participants from eight countries submitted bids.
“We are delighted with the results of the 2020 Argyle Pink Diamonds Tender, a testament to the unique Argyle ore body and its place in the history of the world’s most famous diamonds,” said Patrick Coppens, general manager of sales and marketing for Rio Tinto’s diamond business.
The interest has continued into 2021, as auction house Christie’s prepares to sell the Sakura diamond in Hong Kong. The centerpiece of an upcoming late May auction, the 15.8 carat Sakura is the world’s largest internally flawless purple-pink diamond.
The gem is expected to draw a large crowd, and sell for $195 million to $300 million Hong Kong dollars.
The Sakura diamond will be auctioned in Hong Kong on May 23, 2021. Image courtesy of Christie’s.
The heightened attention, paired with Argyle’s closure, is expected to bolster interest in the pink gems in the years to come.
“The effects of the closure of the Argyle mine will take some time,” explained fancy colored diamond analyst Yaniv Marcus. “I estimate it will take at least a year, there is another tender next year.”
“Only after that tender will we see a slowing surge in demand and price increase. For now, there are still many Argyle diamonds available.”
Argyle’s end of life was well publicized, spurring heightened interest in Rio Tinto’s pink diamond tenders. But Zimnisky stopped short of saying the inherent value of the mine’s gems has increased.
“It’s tough to say given how nuanced the rough market is, but it seems as if the rarest, most-desired Argyle goods have fared well in recent years,” said the diamond analyst.
For Marcus, it will take time for the mined goods to reach their full value.
“The value of the Argyle diamonds will take some time to really appreciate,” he said, referring to Rio Tinto’s December 2020 tender, which has been described as “record breaking.”
The Argyle Pink Diamonds Signature Tender 2020 “hero collection.” Image courtesy of Rio Tinto.
“Most of the buyers of the last tender really bid high prices, and therefore will have to wait for a real surge in demand before being able to sell their inventory for a profit,” he said.
Pink diamonds aren’t the only segment that has seen growth in the diamond sector. Challenges in the first half of 2020 saw demand dwindle, but there has been a steady uptick since July 2020.
“A strong recovery in diamond demand that was first seen in the second half of 2020 has continued into 2021,” said Zimnisky. “The Chinese New Year season, an important demand catalyst for the industry, was quite good, which has in part kept a bid in diamond prices in recent weeks.”
The sector’s bounceback is indicative of investment potential, according to Marcus.
“Although the Argyle mine produced some of the rarest pinks in the world, other investment opportunities exist,” he said. “Remember that even though pinks are rare, it is all about creating financial value over time, and there are opportunities right now that make more financial sense.”
Stay tuned for part two of this article, where INN will look at the other two diamond mines in Australia and what their future means for the market.
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network. All readers are encouraged to perform their own due diligence.
Highlights:
Comet Resources Ltd (ASX:CRL) is pleased provide an update on ongoing test work on natural flake graphite from its Springdale Graphite Project (Springdale) located in Western Australia. Both excellent grade and recoveries were achieved on initial tests, leading to commencement of work to produce a bulk sample for further testing. Importantly, the graphite concentrates previously produced demonstrated a unique and potentially very valuable characteristic in its small size distribution, with two-thirds of the product passing the 38 µm size fraction screen. Generally, this small size fraction of graphite is a by-product of processing of larger flake fractions, which produces smaller size graphite, but in doing so also damages the smaller flake material in the process, reducing their performance and value. Deposits that contain high quality ultra-fine graphite are uncommon and are potentially suitable for supplying the expanding battery anode market, which continues to grow as the sales of electric vehicles (EVs) increase. Graphite suitable for battery anode production also achieves premium pricing in graphite markets, making it a highly sought-after product.
Once the bulk sample of Springdale graphite concentrate is produced it will be forwarded to a specialist lab in Germany where they will assess, among other properties, the performance of the graphite during purification, micronisation and spheronisation. These are the key steps for the processing of natural graphite products for EV battery anode specification markets. Comet’s German lab partners will simulate these to test Springdale’s product suitability to meet industry standards in all of these areas.
Comet Managing Director, Matthew O’Kane, commented, “The results of this ongoing test work will determine the suitability of the natural flake graphite from Springdale for use in the manufacture of battery anodes for electric vehicles. Earlier tests have demonstrated the graphite from Springdale is quite a rare product due to its very small flake size, which could make it ideally suited for anode production. This next stage of specialised testing will hopefully confirm this.”
Further test work on the bulk sample of float concentrate in Germany is designed to assess the ability of the concentrate obtained by flotation to be converted into highly valuable, readily saleable products.
Three different processes are to be tested:
These test work streams are designed to confirm the suitability of Springdale graphite as a precursor material for these high value-added products. We look forward to receiving the results from these work streams and will provide updates as soon as the information is available.
This announcement has been authorised by the Board of Comet Resources Limited
For further information please contact:
MATTHEW O’KANE
Managing Director
(08) 6489 1600
comet@cometres.com.au
cometres.com.au
Suite 9, 330 Churchill Avenue Subiaco WA 6008
PO Box 866 Subiaco WA 6904
About Comet Resources
Santa Teresa Gold Project (Mexico)
The Santa Teresa Gold Project is comprised of two mineral claims totalling 202 hectares located in the gold rich El Alamo district, approximately 100 km southeast of Ensenada, Baja California, Mexico; and 250 km southeast of San Diego, California, USA. The Project is prospective for high grade gold. In addition to the two claims of the Project, two additional claims totalling a further 378 hectares in the surrounding El Alamo district are being acquired from EARL.
Barraba Copper Project (NSW)
The 2,375ha exploration license that covers the project area, EL8492, is located near the town of Barraba, approximately 550km north of Sydney. It sits along the Peel Fault line and encompasses the historic Gulf Creek and Murchison copper mines. The region is known to host volcanogenic massive sulphide (VMS) style mineralisation containing copper, zinc, lead and precious metals. Historical workings at Gulf Creek produced high-grade copper and zinc for a short period around the turn of the 19th century, and this area will form a key part of the initial exploration focus.
Springdale Graphite Project (WA)
The 100% owned Springdale graphite project is located approximately 30 kilometres east of Hopetoun in south Western Australia. The project is situated on free hold land with good access to infrastructure, being within 150 kilometres of the port at Esperance via sealed roads. The tenements lie within the deformed southern margin of the Yilgarn Craton and constitute part of the Albany-Fraser Orogen. Comet owns 100% of the three tenement’s (E74/562 and E74/612) that make up the Springdale project, with a total land holding of approximately 198 square kilometres.
Forward-Looking Statement
This announcement includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Comet Resources Limited’s planned exploration programs, corporate activities and any, and all, statements that are not historical facts. When used in this document, words such as “could,” “plan,” “estimate,” “expect,” “intend,” “may”, “potential,” “should” and similar expressions are forward-looking statements. Comet Resources Limited believes that its forward-looking statements are reasonable; however, forward looking statements involve risks and uncertainties and no assurance can be given that actual future results will be consistent with these forward-looking statements. All figures presented in this document are unaudited and this document does not contain any forecasts of profitability or loss.
No New Information
To the extent that this announcement contains references to prior exploration results and Mineral Resource estimates, which have been cross referenced to previous market announcements made by the Company, unless explicitly stated, no new information is contained. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.
Medallion Resources Ltd. (TSX-V: MDL; OTCQB: MLLOF; Frankfurt: MRDN) “Medallion” or the “Company”) announces completion of a suite of diagnostic test work at the Australian Nuclear Science and Technology Organization (ANSTO) in Sydney, to extract rare earth elements (REE) from mineral sand monazite. The monazite was sourced from an Australian mineral sand mine. Discussion is ongoing with additional prospective suppliers.
Mineral sand monazite is an abundant REE-rich feedstock, that can be accessed as a by-product from global mineral-sand mines that target zirconium and titanium, without the need for additional mining. Medallion’s business model is centered on the Medallion Monazite Process , a transferable and scalable technology designed to accept multiple mineral-sand monazite feedstocks and extract high-value REEs with high efficiency, high recovery and zero liquid waste.
Current and ongoing test work is focused on correlating low cost “diagnostic” mineralogical and chemical data from “run of mine” monazite, sourced from operating mines and prospective producers, with extraction results from the Medallion Monazite Process . This growing data bank will ensure optimal process conditions can be anticipated for all monazite sources and optimal sites identified for a Medallion Monazite Processing hub.
The diagnostic test work builds upon research completed by Medallion over the past 5 years in Saskatchewan, Canada. ANSTO’s deep experience in REE-processing and mineral sand monazite makes it an unrivaled research partner for Medallion’s ongoing work.
Medallion utilizes Life Cycle Assessment (LCA) as a tool to help reduce the environmental and CO 2 impact of REE production wherever possible. Processing mineral-sand monazite close to source presents the most sustainable solution versus long distance transport. As Australia, South East Asia and the Indian Ocean region are the dominant global sources of mineral sand monazite, expanding research networks in this region, with partners like ANSTO, is highly relevant for future business opportunities.
“The study we have just completed at ANSTO enables us to be increasingly predictive toward REE- extraction and separation process conditions,” said Mark Saxon, CEO and President. “By acquiring a simple set of data from monazite suppliers, we can be predictive on the process conditions, costs and quantity of market-ready REE products.”
Techno-Economic Assessment (TEA) Update
Utilizing independent consultants, Medallion is presently finalizing a Techno-Economic Assessment (TEA) and Life Cycle Assessment (LCA) for the Medallion Monazite Process (see press release dated November 10 2020 ) and January 5 2021 . These studies draw together Medallion’s engineering, financial and environmental impact data and will become the foundation of Medallion’s technology execution strategy.
Delivery of the TEA has unfortunately been impacted by COVID-19 staffing restrictions within consulting service providers. Results are now anticipated by mid-May 2021.
Mark Saxon further commented, “while reporting delays are never ideal, we acknowledge the current challenges and restrictions faced by consultants and researchers in the execution of their business. The financial and LCA model is a far-reaching study that will allow us to compare and prioritize operating locations and feedstocks to ensure the most profitable and lowest-environmental impact decisions are made.”
About Medallion Resources
Medallion Resources has developed a proprietary process and related business model to achieve low-cost, near-term, rare-earth element (REE) production by exploiting monazite. Monazite is a rare-earth phosphate mineral that is widely available as a by-product from mineral sand mining operations. Furthermore, Medallion has recently licensed an innovative REE separation technology from Purdue University which can be utilized by Medallion and sub-licensed by Medallion to third-party REE producers.
REEs are critical inputs to electric and hybrid vehicles, electronics, imaging systems, wind turbines and strategic defense systems. Medallion is committed to following best practices and accepted international standards in all aspects of mineral transportation, processing and the safe management of waste materials. Medallion utilizes Life Cycle Assessment methodology to support investment and process decision making.
More about Medallion (TSX-V: MDL; OTCQB: MLLOF; Frankfurt: MRDN) can be found at medallionresources.com .
Contact(s):
Mark Saxon , President & CEO
Donald Lay , Director & VP, Corporate Development
+1.604.681.9558 or info@medallionresources.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Medallion management takes full responsibility for content and has prepared this news release. Some of the statements contained in this release are forward-looking statements, such as statements that describe Medallion’s plans with respect to the completion of additional tranche(s) of the Offering and the intended use of the proceeds. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties, including the risks related to market conditions and regulatory approval and other risks outlined in the Company’s management discussions and analysis of financial results. Actual results in each case could differ materially from those currently anticipated in these statements. Also, in order to proceed with Medallion’s plans, additional funding will be necessary and, depending on market conditions, this funding may not be forthcoming on a schedule or on terms that facilitate Medallion’s plans. These forward-looking statements are made as of the date of this press release, and, other than as required by applicable securities laws, Medallion disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise.
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