Kelsey Lake Diamond Mine
Encyclopedia
Kelsey Lake Diamond Mine is a defunct diamond
mine
in Colorado
, USA
. It is located in the State Line Kimberlite District, near the Wyoming
border, and consists of nine kimberlite
volcanic pipes
, of which two were open pit mined
.
At the time it was operating, it was the United States' only modern diamond mine, and only the second commercial diamond mining operation in North America, the first being in the Crater of Diamonds State Park, Arkansas
which was mined in the early 1900s.
graduate Howard Coopersmith headed the Diamond Company L.N. which was formed in 1995 to excavate diamonds at the Kelsey Lake site. The same year Australian firm Redaurum acquired controlling interest in Diamond Co. and proceeded to lease mining rights for the land around Kelsey Lake. After mining and selling approximately 200 carats worth of diamonds, Redaurum was sued by Union Pacific who had originally sold the land in 1896 but claimed that it held on to the mineral rights
. The two parties settled the lawsuit but Redaurum closed the mine in September 1997 to concentrate on exploration.
The mine was operated sporadically until the operation was sold to McKenzie Bay International Ltd. in 2000. McKenzie bought the mine management firm Diamond Co. from Chapter 11 bankruptcy, transferred all its assets to a subsidiary, Great Western Diamond Co., and invested $2 million in new equipment for the mine. In 2001, McKenzie tried to sell the mine to focus on mining vanadium
after the price of that metal rose dramatically. However due to a dispute with the landowner over royalty payments, the sale fell through and McKenzie was unable to find another buyer. The mine ceased operations in 2001, and the site was fully reclaimed
by 2006.
, and 25-30% of those were 1 carat (0.2 g) or larger.
While Redaurum ran the operation, the mine ran at half-capacity and produced almost 12,000 carats in total, of which about half were gem quality and one-third were larger than one carat
. Due to Redaurum's African operations taking most of their time and capital
, during their tenure the mine was unprofitable. In addition McKenzie Bay estimated that due to Redaurum's outdated equipment only 40% of the mined ore yielded diamonds, on the order of 1.5 cpht.
When McKenzie Bay first acquired the mine, they estimated with their equipment improvements that they could recover 3.5 cpht from the ore
. They also estimated that each of the two pipes being mined had about 340,000 carats worth of gems and could be profitably mined for about 10 years. The previous owners had a marketing agreement with local Denver diamond dealers to sell them Kelsey Lake diamonds for $115 per carat. If production had risen to the expected levels of 60,000 carats per year, McKenzie Bay expected to make $6.9 million annually. However with the rising prices of vanadium
McKenzie Bay shifted their focus away from Kelsey Lake and began mine reclamation procedures in 2003.
, color
, clarity
, cut
. Because of this pricing system large gemstones are worth more than a comparable mass of smaller stones. For this reason a successfully diamond mining operation can't rely solely on the mass of carats recovered. The Kelsey Lake mine has produced some large stones.
In 1996 the largest diamond found at the mine was discovered. Named the "Colorado Diamond," it was a 28.3 carats (5.7 g) yellow stone and at the time the fifth-largest diamond found in North America
. The gem was cut and polished by legendary New York diamond cutter Bill Goldberg
which yielded a 5.39 carats (1.1 g) faceted stone that sold for $87,500 USD
.
In addition, in 1994 a 14.2-carat, gem-quality white diamond was recovered and in July 1997, the company found two gem-quality stones weighing in at 16.3 carats and 28.2 carats.
Diamond
In mineralogy, diamond is an allotrope of carbon, where the carbon atoms are arranged in a variation of the face-centered cubic crystal structure called a diamond lattice. Diamond is less stable than graphite, but the conversion rate from diamond to graphite is negligible at ambient conditions...
mine
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
in Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
, USA
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. It is located in the State Line Kimberlite District, near the Wyoming
Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...
border, and consists of nine kimberlite
Kimberlite
Kimberlite is a type of potassic volcanic rock best known for sometimes containing diamonds. It is named after the town of Kimberley in South Africa, where the discovery of an diamond in 1871 spawned a diamond rush, eventually creating the Big Hole....
volcanic pipes
Diatreme
A diatreme is a breccia-filled volcanic pipe that was formed by a gaseous explosion. Diatremes often breach the surface and produce a tuff cone, a filled relatively shallow crater known as a maar, or other volcanic pipes.- Word origin :...
, of which two were open pit mined
Open-pit mining
Open-pit mining or opencast mining refers to a method of extracting rock or minerals from the earth by their removal from an open pit or borrow....
.
At the time it was operating, it was the United States' only modern diamond mine, and only the second commercial diamond mining operation in North America, the first being in the Crater of Diamonds State Park, Arkansas
Arkansas
Arkansas is a state located in the southern region of the United States. Its name is an Algonquian name of the Quapaw Indians. Arkansas shares borders with six states , and its eastern border is largely defined by the Mississippi River...
which was mined in the early 1900s.
History
Geologist and Colorado State UniversityColorado State University
Colorado State University is a public research university located in Fort Collins, Colorado. The university is the state's land grant university, and the flagship university of the Colorado State University System.The enrollment is approximately 29,932 students, including resident and...
graduate Howard Coopersmith headed the Diamond Company L.N. which was formed in 1995 to excavate diamonds at the Kelsey Lake site. The same year Australian firm Redaurum acquired controlling interest in Diamond Co. and proceeded to lease mining rights for the land around Kelsey Lake. After mining and selling approximately 200 carats worth of diamonds, Redaurum was sued by Union Pacific who had originally sold the land in 1896 but claimed that it held on to the mineral rights
Mineral rights
- Mineral estate :Ownership of mineral rights is an estate in real property. Technically it is known as a mineral estate and often referred to as mineral rights...
. The two parties settled the lawsuit but Redaurum closed the mine in September 1997 to concentrate on exploration.
The mine was operated sporadically until the operation was sold to McKenzie Bay International Ltd. in 2000. McKenzie bought the mine management firm Diamond Co. from Chapter 11 bankruptcy, transferred all its assets to a subsidiary, Great Western Diamond Co., and invested $2 million in new equipment for the mine. In 2001, McKenzie tried to sell the mine to focus on mining vanadium
Vanadium
Vanadium is a chemical element with the symbol V and atomic number 23. It is a hard, silvery gray, ductile and malleable transition metal. The formation of an oxide layer stabilizes the metal against oxidation. The element is found only in chemically combined form in nature...
after the price of that metal rose dramatically. However due to a dispute with the landowner over royalty payments, the sale fell through and McKenzie was unable to find another buyer. The mine ceased operations in 2001, and the site was fully reclaimed
Mine reclamation
Mine reclamation is the process of creating useful landscapes that meet a variety of goals, typically creating productive ecosystems from mined land...
by 2006.
Production
Of the nine volcanic pipes found, three were reported to contain diamonds, and two (KL-1 and KL-2) were mined. These two pipes are each approximately 10.5 acres (4.2 ha) in area, are at least 350 feet (106.7 m) deep, and are situated 0.5 miles apart. Bulk sampling during exploration in 1990 and 1991 recovered grades of 3.4 to 4.5 carats per hundred tons (cpht) for diamonds larger than 2 millimetre (0.078740157480315 in). Of the diamonds recovered, 50-65% were gem qualityDiamond (gemstone)
A diamond is one of the best-known and most sought-after gemstones...
, and 25-30% of those were 1 carat (0.2 g) or larger.
While Redaurum ran the operation, the mine ran at half-capacity and produced almost 12,000 carats in total, of which about half were gem quality and one-third were larger than one carat
Carat
Carat or karat may refer to:In the gem business:* Carat , a unit of mass for gemstones, equal to 0.2 gram* Carat or karat, a unit of purity for goldIn Judaism:...
. Due to Redaurum's African operations taking most of their time and capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
, during their tenure the mine was unprofitable. In addition McKenzie Bay estimated that due to Redaurum's outdated equipment only 40% of the mined ore yielded diamonds, on the order of 1.5 cpht.
When McKenzie Bay first acquired the mine, they estimated with their equipment improvements that they could recover 3.5 cpht from the ore
Ore
An ore is a type of rock that contains minerals with important elements including metals. The ores are extracted through mining; these are then refined to extract the valuable element....
. They also estimated that each of the two pipes being mined had about 340,000 carats worth of gems and could be profitably mined for about 10 years. The previous owners had a marketing agreement with local Denver diamond dealers to sell them Kelsey Lake diamonds for $115 per carat. If production had risen to the expected levels of 60,000 carats per year, McKenzie Bay expected to make $6.9 million annually. However with the rising prices of vanadium
Vanadium
Vanadium is a chemical element with the symbol V and atomic number 23. It is a hard, silvery gray, ductile and malleable transition metal. The formation of an oxide layer stabilizes the metal against oxidation. The element is found only in chemically combined form in nature...
McKenzie Bay shifted their focus away from Kelsey Lake and began mine reclamation procedures in 2003.
Diamonds
The price of diamonds depends mainly on the 4 C's of diamonds - caratCarat (mass)
The carat is a unit of mass equal to 200 mg and is used for measuring gemstones and pearls.The current definition, sometimes known as the metric carat, was adopted in 1907 at the Fourth General Conference on Weights and Measures, and soon afterward in many countries around the world...
, color
Diamond color
A chemically pure and structurally perfect diamond is perfectly transparent with no hue, or color. However, in reality almost no gem-sized natural diamonds are absolutely perfect. The color of a diamond may be affected by chemical impurities and/or structural defects in the crystal lattice...
, clarity
Diamond clarity
Diamond clarity is a quality of diamonds relating to the existence and visual appearance of internal characteristics of a diamond called inclusions, and surface defects called blemishes. Clarity is one of the four Cs of diamond grading, the others being carat, color, and cut...
, cut
Diamond cut
A diamond cut is a style or design guide used when shaping a diamond for polishing such as the brilliant cut. Cut does not refer to shape , but the symmetry, proportioning and polish of a diamond...
. Because of this pricing system large gemstones are worth more than a comparable mass of smaller stones. For this reason a successfully diamond mining operation can't rely solely on the mass of carats recovered. The Kelsey Lake mine has produced some large stones.
In 1996 the largest diamond found at the mine was discovered. Named the "Colorado Diamond," it was a 28.3 carats (5.7 g) yellow stone and at the time the fifth-largest diamond found in North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
. The gem was cut and polished by legendary New York diamond cutter Bill Goldberg
William Goldberg (diamond dealer)
William Goldberg was an American diamond dealer and the founder of the William Goldberg Diamond Corporation.-Biography:Goldberg was born December 22, 1925 in Brooklyn, New York City. He started cutting diamonds in 1948, but found that his aptitude lay with buying and selling diamonds rather than...
which yielded a 5.39 carats (1.1 g) faceted stone that sold for $87,500 USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
.
In addition, in 1994 a 14.2-carat, gem-quality white diamond was recovered and in July 1997, the company found two gem-quality stones weighing in at 16.3 carats and 28.2 carats.
External links
- UpFront - JCK-Jewelers Circular Keystone, November 1997
- Diamond Co. digs into Chapter 11 bankruptcy - The Business Report, 28 Jan 2000
- Searching for Placer Diamonds - Wyoming State Geological Survey
- McKenzie Bay International News Releases from the Internet ArchiveInternet ArchiveThe Internet Archive is a non-profit digital library with the stated mission of "universal access to all knowledge". It offers permanent storage and access to collections of digitized materials, including websites, music, moving images, and nearly 3 million public domain books. The Internet Archive...