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Putting a price on diamonds National valuation firm is Yellowknife based and aboriginal owned
Lyndsay Herman
Diamonds International Canada (DICAN) was first appointed mining royalty valuator by the federal government in 1998 after the government had issued an international tender in anticipation of the Ekati diamond mine reaching production. The company is 51 per cent owned by Aboriginal Diamonds Group, which is owned in equal parts by the Det'on Cho Corp., the Kitikmeot Corp. and the Tlicho Investment Corp. The remaining 49 per cent is owned by London-based WWW International Diamond Consultations Inc. The most recent contract was signed in 2010 for $12.3 million over two years, with the option to extend for an additional two years in 2013. In the past, the Government of Canada has always invited DICAN to extend the contract for an additional two years. Before any diamonds are removed from a mine or sold, they must be valuated by a mining royalty valuator, according to the NWT and Nunavut Mining Regulations. From these valuations, the valuator can assess the royalties owned to the Crown based on the output of the mine. "Most commodities like gold or platinum or silver, there is just one price and you look that price up in the newspapers or on the Internet at any time, "said Richard Wake-Walker, director of Diamonds International Canada and joint founder of WWW International Diamond Consultants Inc. "The difference with diamonds, with rough diamonds, is that they are all unique. Every one is different." Diamonds vary in weight, size, shape, colour and internal quality. A valuator must consider all of these aspects in addition to how the diamond could be polished to optimize its value, said Wake-Walker. "When you are judging the stone you need to think like the polisher," he said. "Will you be able to get rid of some of these imperfections? Is it worth getting rid of them and wasting weight or do you keep them within the stone? You'd have a lower value stone but you'd have a bigger stone." Valuations are conducted on diamond shipments from NWT mines in Yellowknife every five weeks, a cycle typically used by the mining industry. Within a shipment, the valuators will valuate a percentage of small diamonds which will then be used to calculate the value of the whole shipment. However, any diamonds over six carats are valued individually because of the high possible value. Since DICAN's birth in the late nineties, the valuation team has gone from six or seven Europeans to approximately two Europeans and three or four Northern Canadians trained by the company. Wake-Walker said he attributes DICAN's success to its openness and willingness to share WWW's experience and skills with the Canadian team. "Our philosophy in WWW, and therefore in DICAN, has always been to be absolutely open," he said. "A lot of diamond people are very secretive and there is no real reason for that. "We want to broadcast our knowledge to people who are interested, and why not? From our first bid we said we were very happy to pass on our skills and experience to Canadians. We want Canadians to be part of our team and I think that was a big factor in winning the very first contract." DICAN has also been diamond valuator for the province of Ontario since 2008 and will find out in 2013 if its most recent bid, submitted this year, will be accepted.
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