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Field of Schemes

A gem of a story about diamond mines--real and fake!

Still, I kept pushing and promoting and trying to keep the project going. But it didn't work. We'd had a lot of technical successes--we found a lot of kimberlite and we found a lot of diamonds, up to a carat in size. I believed very simply that the job wasn't finished. I couldn't write off the area because I hadn't explored all of it yet. There were still holes.

George Tikkanen: It's quite common for a geologist to say, "Just a little more work and we'll be there." But we had decided the diamond business really wasn't one we wanted to be in. We had done a lot of work and not come up with anything of interest.

In addition, the diamond business is extremely difficult. Even after you've found diamonds, you don't know what they're worth--it depends on the quality of the stone, the size and the flaws and so on.

And then there's the market. Zinc and copper have commodities exchanges and are publicly traded on the open market. But diamonds are an extremely specialized market, controlled by one company, De Beers, which buys up surpluses to control prices. They have an absolutely staggering ability to support the market when prices are weak. It makes it very difficult to figure out what your product is worth.

Besides, we were looking for something quite large. There was a kimberlite pipe found recently in Botswana. De Beers poured $800 million into it to develop the site--and it paid off in three months. That's the kind of thing we were after.

Howard Coopersmith: In the summer of 1986 the company told me, "That nice salary you've been enjoying isn't coming anymore." You could see it coming every day. I'd made trips to Vancouver, trying to convince them to stay. But they'd made up their mind.

So that summer I went out on my own. And I found the first kimberlite at Kelsey Lake that fall. I just went out one day and found it. I had good suspicion I should be looking there. It was just me and the cows. In the spring of 1987 I went up and discovered the second large kimberlite on the ranch, a couple thousand feet away.

Malcolm McCallum: I get a kick out of Howard's stuff. I think he's started to believe his own press. The pipes he "discovered" had been known to us since the early 1960s. That's when a colleague of mine actually had pinpointed those things. Once, when Howard was doing work up there, after he'd "found" the pipes, I went up with some of our research maps showing him that we'd located some of these things fifteen years before.

He did refind them, I suppose, but it was hardly original. To say he discovered them is not quite right.

Dan Hausel: Howard's "discovery"? Yeah, it's puzzling. I've got a map with all the locations of kimberlite in the district from about 1967. And it shows the Kelsey Lake kimberlites.

Howard Coopersmith: There are only a few hundred diamond geologists in the world, and only a few dozen with significant experience. Soon after I discovered those pipes I got a call from a colleague in Australia. He said he was forming a new diamond mining company and wanted me to handle the North American part.

I said, "That sounds good. I got a couple of new kimberlites; let's put them into the company." I couldn't really do anything on my own with them. I just didn't have enough money.

I also started talking to the family that owned the ranch where I found them. They're an old ranching family, and they weren't really sure they wanted a mine on the area. It took months and months of negotiation, explaining what we wanted to do. I'm sure that if I hadn't persisted, they sure wouldn't have come chasing after me.

But I wasn't about to give up very easily now. We got the lease done at the end of 1987.

Rancher who owns the land where diamonds were discovered: I don't want to talk about that.

Malcolm McCallum: Howard's principal contribution to all of this was that he did go out and do some detailed work up there, and he did convince the owners of the land to allow it to be exploited. For a long time they didn't want anybody on their land.

But Howard became very good friends with them--I think he even got married up on that ranch. And I heard that the family also ran into economic problems, which changed their mind about mining there.

You gotta give the guy credit for hanging in there.
Howard Coopersmith: The next few years we spent testing and fundraising. It was always a struggle to keep it alive. We had a hard time interesting people in this country; many of them simply said, "There are no diamonds in the United States." So we had to go to areas where diamonds are understood to look for investors: South Africa, Australia, Europe.

We also hadn't found anything big yet. In the two pipes, the biggest diamond we'd found was two-tenths of a carat, so we had to use that to sell the mine.

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