After a turbulent period, the sun finally shines on Arctic Canadian - quite literally - as the company’s reboot included the successful sale of the stunning 204-carat yellow "Dancing Sun" through a Christie’s auction earlier this month.
The Arctic Canadian Diamond Company, formerly known as Dominion Diamond Mines, took possession of a 552-carat yellow diamond uncovered in October 2018 at the Diavik Diamond Mine, located approximately 135 miles south of the Arctic Circle in Canada’s Northwest Territories. The Diavik mine is partially owned and operated by Rio Tinto's operations in Canada.
Abrasion markings on the rough stone’s surface attest to the difficult journey the gemstone underwent during recovery. Measuring 33.74mm x 54.56mm and weighing exactly 552.74 carats, a diamond of this size and magnitude was unexpected for this part of the world, a true milestone for diamond mining in North America. Following the recovery of the rough diamond in 2018, the polished diamonds made their public debut in 2021. The “Dancing Sun,” a fancy intense yellow diamond of 204.36 carats with VVS2 clarity sold at Christie’s New York Magnificent Jewels auction. The cushion-modified brilliant-cut diamond went under the hammer for US$ 4.95 million, well within the pre-auction estimate of US$3.5 million - US$5.5 million.
The Diamond Loupe sat down with Harsh Dalal, VP of Sales at the Arctic Canadian Diamond Company to find out more about their rebooting strategy and the "Yellow Sun".
By Ahalya Choksi, Editor The Diamond Loupe
The Diamond Loupe (TDL): The expertise required to polish such a magnificent diamond is rare to find these days. It took over two years of the rough stone passing through the hands of expert diamond cutters and polishers before becoming the exquisite gem it is today. Could you give us more details on the polishing process, the expertise required, and how you went about finding the right partner(s)?
Harsh Dalal: We visited NYC, Antwerp, Dubai & Surat to find a polishing partner who could enhance the beauty of this magnificent jewel. All experts we met with are world-renowned, and it was a difficult decision to select one out of the five we met with. Ultimately, we chose Pol Van der Steen after seeing his operations in Antwerp and reading about his technical innovations over the years. As per our agreement with Mr. Van der Steen, we cannot disclose the innovative equipment or proprietary methods used.
TDL: The original rough was the largest diamond to be unearthed in this part of the world. How does it feel knowing the “Dancing Sun” is also the largest polished diamond to be mined in North America to date, and what does this mean for your brand?
Harsh Dalal: We are very happy that the Northwest Territories (NWT), Canada produced a large gem of over 200 carats, and it came out unscathed in the recovery plant. Diavik’s processing machinery is not geared towards large-size diamonds, as NWT produces only a few +100 carats gemstones stones compared to other regions of the world such as Africa or Russia.
TDL: How many diamonds were cut and polished from the 552-carat yellow diamond?
Harsh Dalal: In addition to the "Dancing Sun", six other stones were cut from the same rough diamond ranging from 14.52 to 1.06 carats.
TDL: Selling a diamond, especially of this size, color, and magnitude, is always a gamble. Was it the first time Arctic Canadian (or previously Dominion Diamond) ventured into this type of vertical integration? What made you decide to sell it through an auction house?
Harsh Dalal: Arctic Canadian Diamond Company has no plans to vertically integrate. As we are miners, our expertise is in the mining and marketing of rough diamonds. We believe as there are so many expert manufacturers globally, it is best we leave manufacturing to them.
With limited in-house knowledge in marketing polished, the board decided for reasons of transparency and maximizing revenue, an auction would be the safest route.
TDL: Uncovering a rough diamond of this size was unexpected for North America. Have you made any other exceptional discoveries since?
Harsh Dalal: Yes, from our Ekati property, we had a 172 carat Type IIa discovery.
TDL: What is the CanadaMark™ brand?
Harsh Dalal: CanadaMark is not a brand but a certificate of assurance that all diamonds certified as CanadaMark are responsibly mined, in Canada’s Northwest Territories with respect for the sustainability of the natural environment and people living in the community. All CanadaMark diamonds are tracked through a third-party independent auditing process, at every stage, from the mine of origin down to the polished stone.
Since 2019, a major customer of Arctic Canadian Diamond Company Ltd. successfully launched a CanadaMark jewelry program with a leading US retailer. We have similar inquiries from our other customers for marketing CanadaMark jewelry.
TDL: The previous record for a yellow diamond sold at auction was the Graff Vivid Yellow, a 100.09-carat diamond, which set an auction record when it sold at Sotheby’s Geneva in May 2014. How does it feel knowing the “Dancing Sun” now holds the title for the largest yellow diamond to be sold at auction?
Harsh Dalal: We are very pleased to learn that Dancing Sun is the largest Fancy Intense to be auctioned. It feels great to a part of Canadian history.
TDL: In a recent investment call, another Canadian miner alluded to the changing consumer and retailer demands around provenance, making Canadian diamonds particularly interesting, including to new buyers. Have you seen a similar trend in your sales, and can you tell us more about how your company hopes to tap into this trend?
Harsh Dalal: As per feedback received from our participating customers, jewelry manufacturers, and retailers, it is true that millennials in North America and the UK prefer to buy Canadian-origin diamonds if available. They do not mind paying a small premium for Canadian polished that has been tracked and audited by an independent auditor.
TDL: Following an arduous ten months, operations at Ekati restarted in January, with plans for annual production to reach 5 million carats by 2022. Can you tell us a bit more about production updates and forecasts?
Harsh Dalal: We are back on stream and will continue to market our rough diamonds through both auctions and allocations. Our current mine life runs till 2028, but we are working on extending this beyond that, given the significant reserves and resources remaining in our land base.
TDL: In April 2021, you joined the Natural Diamond Council, and Kristal Kaye, your Chief Financial Officer joined the NDC’s board of directors. Why was joining a council such as this one important to your company?
Harsh Dalal: Dominion Diamond Mines was part of the Natural Diamond Council before filing CCAA in early 2020. The Arctic Canadian Diamond Company wanted to continue to be part of the NDC and its promotion of Natural Diamonds and the benefits that diamond mining brings to communities in which they operate.
It is very important for all miners to market ethically mined natural diamonds in the face of stiff competition from other luxury items, holidays, and Lab Grown Diamonds. The NDC provides that platform.
TDL: Looking ahead, what do you feel are the biggest challenges for Arctic Canadian Diamonds, and how do you plan to tackle them?
Harsh Dalal: In the short term, COVID remains a big challenge for us due to our remote worksite, having a large number of our workforce reside in remote communities, and our use of international third parties who may not be as advanced in the fight against the pandemic. To mitigate this, we continue to push for the vaccine and aim to have 85% of our workforce fully vaccinated by the end of July.
In the longer term, our challenge is to develop profitable mining alternatives for our remaining reserves and resources that will extend our mine life beyond 2028. There are several workstreams currently underway focused on mining development options, new technologies available, and further exploration potential.
In recent news, Diacore revealed itself to be the buyer of the record-breaking fancy intense yellow "Dancing Sun" diamond that sold at Christie's New York earlier this month. In addition to this gem, Diacore has purchased some of the rarest and most sought-after diamonds in the world including De Beers 203.04 carats "Millennium Star" and the magnificent 59.60-carat "Pink Star", a flawless fancy vivid pink diamond.
Photo: Donald Woodrow