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Almazy Zapolyarya: “We managed to acquire diamond assets of absolutely unique quality”

13 february 2023
pavel_shelkov_xxn.pngPavel Shelkov, Chief Geologist of the Almazy Zapolyarya (Polar Diamonds) group of companies, is engaged in prospecting and evaluation work on developing new diamond deposits in Russia with a wide geographical coverage, from Karelia to Yakutia.

In this interview with Rough&Polished, he speaks about the current projects the geologists are implementing and their prospects.

A few years ago, you told Rough&Polished about the most interesting prospecting and exploration projects carried out by the Almazy Zapolyarya company. What are their results?

In general, all the projects announced have been implemented, all the applications have been submitted and licenses have been obtained. Today, 18 licenses have been issued to five of our companies, 17 of them are in the Oleneksky District of Yakutia, and one license is given to carry on the work in the Medvezhyegorsky District of Karelia - in the area of the Kimozero kimberlite pipe.

Almost all of these licenses are very interesting, and there is a very high probability that primary or placer diamond deposits are within the licensed areas. In Yakutia, in particular, large-scale diamond placers are in our licensed areas in the basin of the Malaya Kuonamka river. Except for placers in the area of the Kuonamki river, the placers on its tributaries can be distinguished, including the Delingde and Usumun rivers as well as the Luchakan river where we expect the discovery of deposits with total reserves of more than 10 million carats. The placers on the Omonos and Ukukit rivers are very interesting where the rough diamonds characteristic of the kimberlite pipes of the West Ukukit kimberlite field located here prevail in the 10-km sections of the valleys. And in the valley of the Ukukit river (in the 80-km section), the diamond grades of 0.3 to 0.8 ct per cu.m were achieved from alluvial small-volume samples during the testing made by the Amakinskaya Geological Survey Expedition.

A very interesting paleo placer deposit on an area of about 4 sq. km was discovered earlier within our licensed area at the origin of the Kuogas-Uluybut-Motorchuna river in the Lower Jurassic Domerian stage deposits near the Aerogeologicheskaya and Sestra-19 kimberlite pipes. This placer deposit is characterized by low-nitrogen diamonds that prevail in these pipes, and very rare pink diamonds are present, which was a big surprise to me. Similar fancy-coloured and super-large-sized type IIa diamonds are characteristic of kimberlite deposits where low-nitrogen diamonds predominate that formed in the lower mantle over billions of years of slow growth at great depths. These deposits include the Letseng, Motae and Kao pipes in the Republic of Lesotho, as well as the famous Premier pipe where the largest Cullinnan (Star of Africa) diamond weighing 3,106 carats was found in South Africa, and the Karowe pipe in Botswana, each of which contained 600 type IIa diamonds weighing 900 carats and more.

Such unique diamonds of super-large sizes and fantasy colours are also characteristic of placer deposits formed during the destruction of kimberlites from such pipes like the Lulo placer in Angola where a 170-carat pink diamond of the first water was mined in 2022. The Lucara Diamonds company that owns the license has been searching for the pipe that formed the Lulo placer for over 15 years in the valley of the Lulo river, but with no success. Among our licensed areas, the Aerogeologicheskaya and Sestra-19 pipes located in the Republic of Sakha (Yakutia) and the Kimozero pipe in the Republic of Karelia are the kimberlite pipes with low-nitrogen diamonds where we expected to find giant diamonds and fancy-coloured ones. While studying the materials obtained in previous works, we became convinced that we were right and pink diamonds were present in these pipes. This was one of our first discoveries.

Also, low-nitrogen diamonds are found (although in a smaller amount) in the Svetlana, Lorik, Leningrad and Ruslovaya pipes, and the study of unpublished reports confirmed our prediction about the presence of large-size rough diamonds in these kimberlites because during the recovery of the geological samples from the Svetlana pipe, a gem-quality rough diamond larger than 4 carats was crushed into many smaller stones!

This is the second discovery and it means that large-size type IIa diamonds present not only in the kimberlites of these pipes but also in the placers on the Ukukit and Omonos rivers. These placers were formed by the destruction of these pipes, which can significantly increase the value of rough diamonds in the placers.

The third discovery relates to the Kimozero pipe in Karelia discovered by the Canadian Ashton Mining company that left the pipe in 2012. The area of this largest pipe is 2,000 m by 800 m. When I began to study the material, the first kimberlite sample taken by the Ashton Mining geologists in 1993 from blocks of the kimberlite almost in the bed of the stream (called Almazny by geologists) was the richest one with the average grade about 15 carats per tonne. The sample was taken 40 m from the place where the Ashton Mining’s discovery was made, and the sample showed a higher content of pyropes that are practically absent in diamond-poor kimberlite samples.

And the last sample of kimberlite taken by the Ashton Mining geologists in 2012 at the end of their work on the project also showed 15 carats per tonne. According to the conclusion of the mineralogist of the laboratory in Arkhangelsk, the rough diamonds were crushed into dozens of fragments during the processing of the sample, and they were initially 1-2 large rough diamonds weighing up to 1 ct. And although both samples rich in rough diamonds were not representative in terms of volume (10-18 kg only), these finds confirmed that in the Kimozero pipe with huge reserves of kimberlite ore, there were also kimberlite ores much richer in rough diamonds (in addition to diamond-poor kimberlites) with an ore grade of 1-2 carats per tonne and higher. In slightly eroded kimberlite pipes, the upper part of the kimberlite body is a crater deposit, where the ore grade is rather low, economically unviable, but there can be diamond-rich kimberlites under it, as in many pipes in Yakutia or Angola, and the samples with a lot of rough diamonds and pyropes.

And third, we have three licenses in the Tyung river area and one in the Chimidikyan river area. The Tyung river is closer to the Udachny mine.

They were looking for diamond pipes there, weren’t they?

It’s an amazing story, diamond pipes were searched for there, but they were not found as it is quite difficult to find them. Almost all rough diamonds in this area are concentrated in the first five centimetres of the alluvium, another 20 cm is an alluvium-enriched layer, and there are no diamonds below this depth. That is, they are at the top, and in some areas, they are up to 9 carats per cubic metre, and there are almost no rough diamonds at the bottom. Usually, the opposite happens and they fall down. No one can explain why it happens so. About a decade ago, the Amakinskaya expedition carried out their work there, they searched for bedrock bodies but did not find them, and the placer deposits were assessed as P2. So, 3.5 million carats were found, but to a depth of 20 cm. In the early 1950s, a very large-scale work was carried out there, ditches were dug and a 27-carat rough diamond was found that was called “Lucky Find”. But nothing was found nearby. There is a term “alluvial” diamonds: when the water level rises in high water periods and diamonds rush from some place, and sometimes their content is up to seven carats per cubic metre, which is a very high one. That is, these are placers that need to be explored to a depth of 20 cm. There are such alluvial diamonds in the placers of the Congo, and there, at high water, local residents put small nets to catch them and even, according to various accounts, place them in buckets - so many of them are washed. In the 2010s, a lot of diamonds of a very good quality were found there; their price was up to $200 in 2015, and now it could be $400. It turns out that somewhere, there is a very rich pipe that has not yet been found yet, but when high water flows along the tributaries in the upper reaches, the diamond-bearing rocks are eroded and brought to the Tyung and Chimidikyan rivers. This is a unique geological phenomenon.

And the fourth discovery: we figured out where the diamonds came from to the Malaya Kuonamka river where we have licensed areas. There is a Malaya Kuonamka river valley about 3 km wide, but the most diamond-rich areas explored by the Almazy Anabara company are located downstream the confluence of its right tributaries (the Maspaky and Delingde rivers, etc.). And as you move away from the tributaries, the diamond content in the placer drops and the placer width decreases to 40 metres. It turns out that almost all the diamonds were brought to the Malaya Kuonamka river valley by the tributaries whose upper reaches are eroded by intermediate reservoirs of the Cretaceous age and where the content of the ‘Ebelyakh type’ diamonds even today is up to 0.2 carats per cubic metre.

Today, diamond-bearing Cretaceous deposits, from which diamonds are brought, occupy very small areas in the upper reaches of the Maspaka and Delingde rivers that carry diamonds to the Malaya Kuonamka river. But in the pre-Quaternary time, diamond-bearing deposits were almost everywhere, and due to rapid destruction, huge amounts of diamonds were released that formed rich placers on the Maspaka river (12 mn carats) and the Malaya Kuonamka river (4 to 4.5 mn carats) that were included on the books and records by the Almazy Anabara company as it operates near this area.

It is characteristic that the placer on the Maspaka river has larger reserves, diamond content and the width of diamond-bearing placer channels of 140 m compared to the placer on the Malaya Kuonamka river. In its upper reaches, the average grade per mountain line was 2.4 carats per cu.m, which is several times higher than the average grade in the placers in the middle reaches of the Maspaka and Malaya Kuonamka rivers. So, 2/3 of the diamonds released during the erosion of intermediate reservoirs remained in the valleys of the rivers that drained them, and a smaller part of them was brought to the Little Kuonamka river. We predict a placer with reserves of more than 12 mn carats - similar to the placer on the Maspaka river - in the valley of the Delingde river that flows in parallel with it and has the same sources of rough diamonds. There is another geological phenomenon - before the Quaternary uplift that formed rich diamond placers, the Malaya Kuonamka river flowed into the Olenek river, i.e., it flowed in the opposite direction. The Usumun river where we have a licensed area and that features the areal ‘contamination’ with diamonds (like in the Malaya Kuonamka area) was its paleochannel in the past! This explains that the most diamond-rich areas in the valley of the Malaya Kuonamka river are located not down the river, but up the today’s river current, according to its paleocurrent!

‘Ebelyakh type’ diamonds are also brought to our areas, as well as from the Malaya Kuonamskaya pipe -where the diamond quality is rather high, according to the current price list, and the price for rough diamonds is $400 to $500 per carat.

How has the lockdown due to the Covid pandemic affected your plans?

We had a preparatory period at this time. But we managed to conduct a positive examination of all licenses; under the license agreements, we have a year to attract investments. We are currently negotiating with several investors, gold mining and oil companies, but the negotiations are not easy as everyone is in tension due to the current political situation and the Western sanctions.

What can you say about the general problems in exploration?

Everyone is having a hard time now. The situation is not easy in terms of attracting investment to implement projects. It hits everyone. At such times, investors are trying to withdraw capital and not invest it in anything. Only very brave investors can invest in such projects; for example, these can be gold mining companies that also have a very difficult time now because everything has risen in price, including     explosives, fuel and lubricants ...

If the ore grade at the gold mines is below 4 g per tonne, the production becomes unprofitable; for example, one of our potential investors was at a loss. Unfortunately, we also faced this situation.

In addition to investment, there are also other problems. As for Yakutia, of course, it has a very poorly developed infrastructure, which also requires fairly large investments. For example, there is a magnificent Malokuonamskaya pipe - you can practically call it a deposit, although it has not yet been included on the books and records, but exploration was carried out there with pits and wells, in fact, in category C1-C2. In a rich block, the ore grade is 0.46 ct per tonne but we believe that after processing the bulk samples, which makes it possible to extract large diamonds, it will be, at least, higher than a carat per tonne. The quality of diamonds is absolutely fantastic: the cost of rough diamonds in one tonne of ore, for example, can reach $150-$200 in the 2017 prices and $300-350 in the 2022 prices. It means, that the price of rough diamonds in a tonne of kimberlite ore should be from $180 to $300, which is a very high figure. But at the same time, a bottleneck is the lack of any infrastructure; the distance to the Udachny mine is 400 kilometres along the winter road, which practically brings all the advantages to nought.

Placers can be developed on a rotational basis, which also increases the cost, but the development of any primary deposits located far from the areas with developed infrastructure is an extremely difficult task for private investors. We held meetings with different companies, made our offers and had discussions... People seem to show some interest in the placers, but as for a primary deposit, they hesitate because there are no roads, which actually means that it is necessary to build an airport. And the airplanes are required...

When you start calculating all the costs of creating the infrastructure, you understand that if it would be a pipe, for example, like Mir or Udachnaya ones, it would pay off. And it would be very difficult to implement such a project now because earlier, the USSR state could afford such expenditures. Now, of course, developing and putting primary deposits into operation in undeveloped areas requires the same efforts as a flight to Mars.

How long can it take to implement projects like yours, for example?

As for placers, 2-3 years are required to include a deposit on the books and records, if funding is normal, and 2-3 years are required for exploration, and after that, 3-4 years are required for the production, so in the best scenario, a project can take 7 years.

I don’t have a very good idea of how to include alluvial diamonds on the books and records, they are just on the surface, it is possible to carry out sampling in one summer season, and start mining - even not on a large scale. We really hope for the alluvial diamonds from the Tyung deposit. And in the Malaya Kuonamka and other areas, serious mining work is required as blasting through permafrost is an expensive and time-consuming work.

And it is unknown what will happen tomorrow. For example, people would start working on tractors in mines, in placers. And in the spring, they can be mobilized to become tank operators, and all the work can stop at our project.

As a result, what feeds your optimism and helps you continue your work?

I just understand that we managed to collect diamond assets of absolutely unique quality - both in placers and in primary deposits. This, of course, is cause for optimism. Five years ago, I had never even dreamt of that. That is, we managed to obtain licenses and defend our projects.

Really, inherent optimism, probably, and love for diamonds are just a matter of life for me. It gives me strength when I look at magnificent diamonds shining with all their facets, and when I imagine what kind of rough diamonds will be in the Aerogeologicheskaya pipe, Sister-19, Kimozero - yellow, red, pink, green stones... And by the way, in the Malokuonamskaya pipe, there are absolutely unique sea-green diamonds, as the colour of a sea wave, such diamonds are almost never found anywhere. But they are typical of these pipes. When I look at them, they invigorate me.

This is enthusiasm, we can say that there is a little material component in this, in general. Enthusiasm and belief that in the long run, I will be able to do it all, despite all the great difficulties that exist now.

I ‘fell in love’ with diamonds when I studied at the institute. When I joined the army in 1985 at my third year of the Moscow State Institute of Natural Resources, I took the book “Diamond Geology of the USSR”. I was interested in geology since childhood, as I brought stones home when I was a child.

Even now, around my house, near Moscow, kimberlites are put all around, they were brought from Yakutia, from the Kimozero pipe, and other places.

I would also like to add that in Karelia, we are on the verge of discovering a new kimberlite pipe. That is, kimberlite has already been found, it was proved that this is not a single outcrop, this kimberlite differs from the Kimozersky kimberlite in thin sections, and we will explore it for diamond potential ... And, most likely, another pipe is ten kilometres away - that is, there is a whole kimberlite field. This is very interesting and, of course, important when some new kimberlite bodies are found. Moreover, this is Karelia, it is easier to get there thanks to good roads. But in general, I am full of optimism, of course, I realize that these are magnificent diamond assets. In practice, there are diamonds everywhere - of course, the diamond content may vary, but in principle, everything was very well planned.

It remains to include it all on the books and records, which is not easy in our time.

But I think that our project will be the third private one after the AGD Diamonds and ALMAR companies, in terms of resource potential, may be, we are in the next place after the Grib pipe. Our potential is huge.

And one more thing: we have two licensed areas - near the Delingde river opposite the Zhilinda village and near the Usumun river, and both areas along these watercourses have a very high gold content in samples that amount up to 500 small gold particles (less 1-3 mg) for an 8-litre stream-sediment placer sample. And it is up to 3.5 g per cu.m in small-volume samples from the Usumun river area. That is, in addition to diamonds, placer gold can also be an important mineral to be mined in these areas. And between these two watercourses, there are, most likely, primary sources because when surveying in the Usumun river valley area, gold-sulfide veins were detected that are, probably, gold-bearing. In addition to gold, there is also halenit characteristic of Kuranakh-type gold deposits in dolomites with horizons of carbonaceous matter that is a natural sorbent of gold. By the way, gold in diamond-bearing placers on the Malaya Kuonamka and Bolshaya Kuonamka rivers comes from such deposits, it is extracted today along with rough diamonds. Such deposits can have fantastic reserves amounting to hundreds and thousands of tonnes. And this is the 5th discovery, although it is no longer related to diamonds and kimberlites, that shows another interesting potential. In general, Yakutia is a very cold region but fantastically rich in resources, and I am sure that the people of Sakha Yakutia, will properly manage their wealth and have a very prosperous life.

Galina Semyonova for Rough&Polished