Those familiar with the diamond industry know that few mineral discoveries can reap larger fortunes than an economic diamond mine.

A case in point is the Ekati diamond mine discovered in the Northwest Territories in 1991. Dia Met Minerals, which had a 29 per cent stake in the project that would become Ekati, saw its shares soar from $0.65 to $65.00 in the 18 months following the discovery.

Dia Met eventually sold its interest in Ekati for $800 million in 2001. To give you a sense of how lucrative the mine has been, consider that, despite having a capex of $900 million and being located in the Canadian barren lands, it paid back that total in just 18 months.

The discovery of Ekati set off a diamond rush that would put Canada on the map as a diamond destination.

But as analysts pore over the world’s current and future diamond production, it’s projected that demand will grow faster than supply. A recent Bain report forecasts that demand will grow by 4% annually while rough diamond production will only grow by 1% or less.

Clearly, more diamond mines need to be found to meet demand, but where will they come from?… CLICK for the full article