By Alastair Ford
“It really is the culmination of many years work”, says Professor Richard Conroy, after news broke that Karelian Diamonds had identified a new kimberlite on its Finnish ground.
The company is already well established, sitting as it does on top of the largest kimberlite body in Finland at Seitapera, in the Kuhmo district.
The new find is also in the Kuhmo district, raising hopes that what the company has long thought may yet be realised: that its ground in eastern Finland covers not just one or two pipes, but a whole field.
After all, across the border in Russia, on the same geological craton, lie some of the world’s largest diamond mines.
But finding a kimberlite is never easy. As the professor says, in Karelian’s case the new find was the result of years of work. What’s more, the Karelian find is the first kimberlite discovery to be made in Finland in ten years. Even at the height of the boom, when money was pouring into mining, new kimberlites remained elusive. Nowadays, the discovery of a new kimberlite is not rare only in Finland, but globally.
Work will now get underway to demonstrate whether the new pipe is economically viable or not, even as the company redoubles its efforts to discover yet more kimberlite pipes in the region.
“We’ve already announced a number of indicator trails”, says the Professor. “They’re certainly not all coming from this one pipe. There could be a cluster. This new find means that in Kuhmo two kimberlite bodies have now been found. Seitapera was I suppose somehow thought of as aberrant.”
No longer. When news of the new find broke, shares of Karelian shot up, from 095p to 1.525p, although they’ve since slipped back a bit.
The market is now giving more credence to what the Professor has been saying for some time.
“It’s always been difficult to believe that the major Russian discoveries weren’t replicated on the Finnish side of the border”, he says. “But why shouldn’t there be some on the Finnish side? We’ve been working for years gradually tracing back these kimberlite trends.”
At the new find itself the plan now is to undertake significant further work. “We’ll be doing a combination of geophysics and magnetics to trace the actual kimberlite body to establish its full extent. But this was found in a pit so we’ll now obviously be considering trenching.”
The good news is that, notwithstanding hard times in the equities markets, the money to pay for all this is already in hand.
“We’re comfortably funded”, says the Professor. “We raised quite a lot of funding just over a year ago. The only reason for further funding would be if we might like to accelerate the whole process.”
And longer-term, there’s the possibility of development funding from a major. “Should we make a major discovery”, says the Professor, “we have an agreement with Rio Tinto”. Rio originally owned the Karelian portfolio, and retains back in rights if a big enough discovery to get them interested can be found.
Karelian is certainly one step closer to that now, and it will be interesting to watch as work progresses on the new find.