Big potential for diamonds in Ontario.

The discovery of diamond-bearing kimberlites and other significant indicator minerals in Northern Ontario has sparked increases in diamond exploration.

Finding a kimberlite is like finding a needle in a haystack says Janet Reid, former geologist with the Ministry of Northern Development and Mines. She oversaw a reconnaissance exploration program for the Ontario Geological Survey (OGS).

Finding a diamondiferous kimberlite is even more rare and requires patience, time and money.

If world-renowned geologist Dr. Charles Fipke is accurate, diamonds will double in value by 2010. This will drive demand at a time when supply will be short.

Over the last three years, uncut diamond prices have risen by about 50 per cent, with more increases expected for the future, Ago-racom announced. Diamond Trading Co., the sales arm of De Beers, raised its prices a total of 9.5 per cent for 2005. Another two per cent increase was announced in February.

A projected shortfall in production versus demand has produced record price increases.

Mines in South Africa and Botswana are coming to their life's end. No new discoveries have been found.

"There are diamond mines producing quality stones (internationally), but not enough of them," Reid says.

Canada is the third-largest diamond producer in the world and our standing may improve as hungry junior mining companies eagerly scout for high-quality commercial diamonds.

The OGS indicates a significant number of kimberlite clusters are thought to have the potential of hosting diamonds. These clusters lie in a broad regional trend extending from near Attawapiskat in the Far North, where De Beers Canada is opening Ontario's first diamond mine, to the Belleville area and beyond. The length is marked by a number of major structural features including the Lake Timiskaming Structural Zone, which hosts kimberlite clusters along the Attawapiskat, Coral Rapids, Matheson, Kirkland Lake, Timiskaming, Cobalt, Picton and Syracuse, New York line.

The Timiskaming-Kirkland Lake area is considered the heart of exploration territory.

"That is why there is such a rush of exploration in that area because that zone allows for kimberlite in placement," Reid says.

In the reconnaissance program, the goal was to provide information to junior mining companies interested in continuing exploration programs.

Micro-diamonds or diamonds with noncommercial value were present in the OGS exploration discoveries, along with an abundance of G10 and G9 indicator minerals.

"If you find those, then typically the G10s are associated with kimberlites that have diamonds," Reid says.

"It depends on the chemistry of the garnets."

Northern Ontario possesses a huge potential to become a diamond resource hub, but accessibility is an issue, she says.

"There is a lot of area that has not been touched with respect to exploration just because access is difficult."

Juniors often do not have the financial resources to tackle the more advanced stages of prospecting.

Either larger companies will need to acquire properties or a small group of companies will need to pool their resources to progress further, she says.

mndm.gov.on.ca/mndm/mines/ogs/Default_e.asp

By KELLY LOUISEIZE

Northern Ontario Business