The Colorado Diamond Mine

Ray-LundinDiamonds are forever, so says the DeBeers Diamond Industry’s advertisements. Diamonds are considered the premier mineral, the ultimate proof of a man’s love; while gold, the coin of the realm, comes in a distant second.

The first diamond in Colorado was found accidentally at a U.S. Geological Survey lab in Lakewood in 1975. Some kimberlite, the ore that contains diamonds, was being ground flat for a thin section when a small diamond in the rock scratched a carborundum-charged grinding plate. Soon headlines announced the exciting diamond discovery. Geologists began a systematic search for diamonds in that year narrowing down geological formations that could produce diamonds. Confirmation of diamond occurrence in the state came in 1987 when diamonds were recovered from volcanic structures located northwest of Fort Collins in the Kelsey Lake area on the Colorado/Wyoming state line. Miners had walked over the site as they headed for Colorado’s gold rush in the 1800’s. “There was no gold in northern Colorado, and nobody was looking for diamonds,” a geologist said.

Mining companies had rejected that region as too expensive to develop. Then a company called Redaurum, a diamond mining company with producing mines in South Africa and Zimbabwe, began production at the site in 1996. Redaurum acquired controlling interest in Diamond Co. and proceeded to lease mining rights for the land around Kelsey Lake.

When Jack Murphy, the curator of geology in the Dept. of Earth and Space Sciences at the Denver Museum of Natural History, first heard the report of diamonds in Colorado, he thought it was just another diamond hoax. There had been a scandalous hoax in 1872 that had upset the financial world for a short time and put Colorado in the headlines. It began when two “prospectors” showing off a bag of diamonds and other gems in San Francisco had convinced the president of the Bank of California that they had found a rich diamond field in the little known western interior of the nation. This mystery occurrence later turned out to be in Moffat County in northwestern Colorado, where the prospectors had “salted” the area with gemstones. At that time, millions of dollars were invested in the venture, only to have the hoax unraveled by famous geologist Clarence King.

When Redaurum ran the Kelsey Lake operation, the mine ran at half-capacity and produced almost 12,000 carats in 1996 and 9,000 carats in 1997. In 1997, Redaurum uncovered a 28.3 carat yellow diamond at the Kelsey Lake mine, which sits at 8,000 feet on a rugged mountain about 45 miles northwest of Fort Collins. It was the fifth largest stone found in the United States. The largest was the “Uncle Sam,” a 40.23 carat gem recovered in Arkansas in 1924 and cut into a 12.4 carat gem. The Kelsey Lake diamond that was cut into a 16.87 carat cushion shape was sold in New York for over $40,000. Redaurum had uncovered a 14.2 and a 9.4 carat stone before selling the mine to McKenzie Bay International Ltd. Gary Westerholm, president of the company, estimates that the mine’s kimberlite ore, a gray rock, hides between 60,000 and 250,000 carats of diamonds. There are less than 20 kimberlite diamond mines in the world.

Under Redaurum’s ownership, the mine was operational only for a few years, between 1995 and 1997. The mine’s new owners estimate about half the Kelsey Lake diamonds are gem quality, and some rough stones could be larger that 100 carats. The mine has already trademarked the name “Colorado Diamonds.” These diamonds are found less than 100 miles from Denver.

Colorado diamonds probably have a leg up on the only other place in the U.S. where diamonds are found – Murfreesboro, Arkansas. The Kelsey Lake mine was an active operating mine with the potential of mining thousands of carats of diamonds. Whereas the Crater of Diamonds State Park in Murfreesboro is a stop for hobbyists and tourists, who, for a fee, can hunt through the grounds for diamonds.

The Kelsey Lake Diamond Mine is now a defunct diamond mine in Colorado. The mine ceased operations in 2001, and the site was fully reclaimed by 2006. It is located in the State Line Kinberlite District, near the Wyoming border, and consists of nine kimberlite volcanic pipes, of which two were open pit mines. At the time it was operating, it was the United States’ only modern diamond mine, and only the second commercial diamond mining operation in North America, the first being in the Crater of Diamonds State Park in Arkansas which was mined in the early 1900s.

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