Ellendale Mine to be Acquired by Goodrich Resources
Goodrich Resources has announced its plans to acquire the Ellendale Mine, which is owned by Gem Diamonds Australia Holdings Pty Limited. The deal is expected to be completed by January 2013. The Ellendale Mine produces mostly Fancy and Vivid intensities and is responsible for an estimated 50% of the world’s Yellow Diamond production. With an estimated 18 months of mine life remaining, the Ellendale Mine’s potential still looks quite promising.
As it stands, the market demand for Yellow diamonds is rapidly increasing. A purchase like this could prove to be extremely fruitful for Goodrich Resources.
About the Mine
The Ellendale Mine is located in the West Kimberly Region of Western Australia, approximately 120 kilometers east of Derby. The mine covers 123.9 square kilometers and operates from a single diamond bearing lamproite pipe known as E9. Ore from this pipe is extracted and processed. E4 is a second pipe that is currently under care and maintenance together with its processing plant. There are an additional 47 lamproite pipes that are known to exist within the Ellendale Mining Lease, besides for the E9 and the E4. However, only about half of these pipes are believed to be diamond-bearing. Furthermore, since a small amount of sampling has been conducted, there are high hopes for further diamond resources over the next year.
The Mine’s Diamonds
Renowned for its spectacular Yellow Diamonds, the Ellendale Mine supplies diamonds for some of the largest jewelry companies in the world. During the January to June 2012 period, Kimberley Diamond Company managed to generate $57.6 million in sales revenue from the Ellendale diamond operation. Overall, the mine recovered 78,881 carats of diamonds.
The transaction between the two companies will be finalized in the beginning of the year 2013. An upfront payment has already been accounted for and the remaining cost will be paid off in twelve installments. The deal as whole is based on the due diligence inquiries conducted on behalf of Goodrich Resources. This is a significant acquisition and therefore a notable sale in the diamond and color diamond industry.