PINK ARGYLE DIAMONDS
Sunburst Rare Diamonds Inc.
INTRODUCTION…
At a time when other investments have suffered unparalleled chaos and uncertainty, natural fancy-colored diamonds have steadily appreciated in value. Over the last decade, Argyle pink diamonds have consistently broken records on the global auction market, demonstrating the robust nature of the diamond market and the unceasing international demand. Christies auctions have surpassed records the last few years for both the most expensive investment grade diamonds and the highest price per carat. In April 2014, Christies auctioned top quality, fancy pink, blue and yellow diamonds with prices exceeding of $1 to $2 million per carat, leading Christies to declare 2014 the year of the colored diamond. Rahul Kadakia, Head of Christies New York, states,
“A colorless D-grade diamond at auction will make about $150,000 a carat, while a pink fancy-colored diamond will make $1.5 million a carat, 10 times the price.”
He also stated, “This is where the market is. It keeps progressing as people realize how rare these stones are.”
Traded as early as the fourth century B.C., natural fancy-colored diamonds have had a legacy of continuous capital appreciation. Over the 38 years of performance prices, fancy-colored diamonds have never declined at the dealer level. In fact, they have steadily increased by between 18% to 25% annually. According to Sothebys, “yellow diamonds have doubled in value every seven years. Reds, pinks and blues have seen the greatest appreciation, having quadrupled within the last decade!” In fact on November 16, 2010, a fancy intense 24.78 carat pink diamond sold for a record $42,5 million, or $1.69 million per carat at a Sothebys auction in Geneva, Switzerland. That was a world record for a jewel sold at an auction.
The classic criteria for colorless diamonds, such as cut proportions and clarity, are not as prominent when purchasing natural fancy-colored diamonds.
The most important quality for natural fancy-colored diamonds is saturation.
The more intense the color, the rarer, the more expensive the diamond. We deal only in investment grade diamonds which grade between fancy and fancy intense to provide the very best saturation qualities and investment growth. It is universally acknowledged that natural fancy-colored diamonds are the world’s most concentrated form of tangible value. Both diamonds and gold are extremely rare, mined natural resources. Diamonds are in fact, significantly rarer than gold. Natural fancycolored diamonds are distinctively rarer.
The law of supply and demand historically drives the price of all commodities. Nowhere is this more transparent than in fancy-colored diamonds. The diminishing supply of natural fancy-colored diamonds is intrinsically correlated to their sustained rise in prices.
The global supply of such rarities is at an all-time low and experts predict that the long term trend will continue. The world’s most abundant diamond mine and the largest supplier of natural fancycolored pink diamonds, the Argyle Mine is scheduled to close in 2020. There have been no recent major discoveries of fancy-colored diamonds, and industry savants predict that no major sources of supply are scheduled to come into production in the foreseeable future.
Natural fancy-colored diamonds are measured by the standard benchmarks of beauty, rarity, and capital appreciation. Only a handful of fancy-colored diamonds achieve the deeper most valuable hues described in the industry as “fancy” and “fancy intense”. This scarcity coupled with unprecidented worldwide demand has led to accelerated price increases in natural fancy-colored diamonds.
In turbulent times, astute investors look for new ways to preserve and grow their wealth, while offering non-correlated diversification to the volatile stock market. Many private and institutional investors have discovered natural fancy-colored diamonds. They provide highly profitable portable wealth preservation. Sunburst Rare Diamonds Inc. offers some of the world’s finest fancy-colored diamonds at the best prices, anywhere.
INVESTING IN COLORED DIAMONDS
High net worth individuals across the globe are ploughing their millions into rare colored diamonds as a stable, “safe haven” asset class. “People are loving them as an alternative investment,” said James Dunston, founder of Dunston Asset Management, a high-end diamond dealer in the U.K. that supplies stones to celebrities, athletes and investment bankers. “It’s a tangible, moveable asset, so you can carry your wealth in your pocket or on your finger. Pink Argyle diamonds in particular have increased dramatically in value over the past decade.”
In 2002, the average cost per carat of a pink diamond stood at $200,000 U.S. according to Dunstson. This year it topped $1,000,000 U.S. “The majority of these increases have come over the last 5 years and is due to scarcity, high worldwide demand and the fact that the Argyle mine is due to close in 2020.”
Pink Argyle diamonds from the Argyle mine in Australia are in high demand. The mine’s owner Rio Tinto, has announced plans to close the site in 2020, driving up demand and the price of the gems.
“My business has gone mad with pink diamonds,” said Dunston. “They are being hoovered up, especially by the Chinese. I’m meeting with a group of 30 new investors on Monday and instead of buying a new house they’re putting their wealth into colored diamonds.”
One client has even put his children’s entire inheritance into the colored gems. “He spent $4.5 million in one go,” said Dunston. “It’s where he plans to store his wealth.”
According to Barclays Bank Wealth’s latest report on investment trends, 36% of the bank’s wealthy clients in the UK are holding more “treasure” assets today than five years ago. Pink Argyle diamonds is by far the most popular treasure asset type for wealthy individuals across all countries, with 70% of global respondents investing in this asset, followed by fine art and antiques.
FANCY PINK ARGYLEINVESTMENT GRADE DIAMONDS
Diamonds have long been admired for their natural beauty and emotions they conjure, but Natural Fancy Pink Argyle Investment Grade Diamonds have also become one the most highly sought after hard assets by investors of all stripes. Out of the entire family of fancy color diamonds, Pink Argyle Diamonds are the second rarest color diamond to be found. The low supply of these diamonds coupled with their popularity has significantly driven the prices of these stones up and up. Pink Argyle diamonds are often referred to as luxury items due to their extreme rarity, making them a great alternative addition for any investment portfolio.
Over the past 18 years, as indicated in the chart above, a Fancy Pink Argyle Diamond has outperformed other commodities by a very significant margin, further proof that pink diamonds are a rock solid choice for investors. Think pink when investing in diamonds.
Pink Argyle diamonds are discovered in a very small amount of mines throughout the globe. But by far, the most valuable source of pink diamonds is the Argyle Mine which operates in the remote East Kimberley region of Western Australia. The pink color of these stones from the Argyle Mine is so rare that diamond experts and jewelers can identify an Argyle diamond by simply looking at the stone. Pink Argyle diamonds and in particular, the Argyle Pink Argyle Diamonds are considered by most to be the best choice when investing in diamonds and is recommended as the best type of diamond investment.
WHAT DETERMINES THE VALUE OF A PINK DIAMOND?
The Color
Unlike with other fancy color diamonds such as blue (Boron), green (radioactivity), yellow (Nitrogen) and violet (Hydrogen), the direct cause of the main pink color in diamonds is still unknown. Based on evidence, what is known is that Fancy Color Pink Diamonds contain high pressure graining which results in a squeezed internal structure which some scientists believe is the source of the pink color. Because of this compression, pink diamonds rarely possess a high clarity grade. Typically, pink diamonds contain surface and internal graining lines, but this is expected and does not mean the diamond is lower quality or less valuable.
Color Intensity
All diamonds are evaluated by the same four main characteristics of diamond quality: Clarity, Cut, Carat Weight and Color. However, for a Fancy Color Diamond, color is the most important characteristic of all, as opposed to colorless diamonds where all of the factors together determine the quality and value.
The color intensity of a pink diamond is categorized as either Faint, Very Light, Light, Fancy Light, Fancy, Fancy Intense, Fancy Vivid. “Fancy” in higher clarity grades such as VS are highly sought after. “Fancy Intense” in clarity grade of SI2 or higher have commanded record prices at auction. “Fancy Vivid” are near impossible to find in clarity grades above SI1.
THINK PINK WHEN INVESTING
Fancy Color Pink Argyle diamonds are not only gorgeous stones, they’re statistical freaks of nature. For example in 2009, pink diamonds accounted for only 10,000 of the 160 million carats of rough diamonds mined that year. Driven by this rarity and an ever-increasing market demand led by China and India, pink diamonds have a truly astounding track record of price appreciation. Natural pink diamonds are without a doubt the most sought after colored diamonds by investors, collectors and jewelers alike.
Exceptional Pink to Red Diamonds: A Celebration of the 30th Argyle Diamond Tender
ABSTRACT
Over the past three decades, pink diamonds from Rio Tinto’s Argyle mine in Western Australia have been offered for sale at annual invitation- only events known as tenders. These diamonds from the mine’s annual production of rough, are cut and polished at the company’s factory in Perth for the tenders.
These diamonds have all been graded by GIA. This article summarizes each year’s collection and presents some pertinent statistical information on color grade and description for this group of rare colored diamonds.
Diamonds are among the rarest and most valuable of all gems. It is estimated that they make up just 0.01% of the world’s total production. Such diamonds have been celebrated throughout history as defining treasures of nobility and prized possessions of the wealthy. Of all the colors, pink diamonds are among the most alluring and sought after. For much of history they were recovered only sporadically in India, Brazil, Indonesia, and southern Africa. Even rarer was the recovery of diamonds described as red or predominantly red, of which only a handful have ever been documented.
The situation changed dramatically in the mid- 1980s with the emergence of the Argyle mine, located in a remote region of Western Australia. Argyle Diamonds Ltd. was formed by the parent company CRA Ltd., later Rio Tinto Ltd., to develop the mine and market the product. This mine became one of the world’s largest sources of diamonds, including a small production of valuable pink to red stones. This limited but consistent supply has intensified interest in these colored diamonds.
The late 1970s and 1980s were a pivotal time in the world of colored diamonds. Through a confluence of events—including the Argyle mine coming on line—colored diamonds gained much greater publicity and desirability than ever before. The late 1970s witnessed a period of unprecedented experimentation in diamond cutting. This proved beneficial to colored diamonds, as many of the proportion sets that were developed served to maximize face-up color appearance. Auction sales and museum exhibitions also drove interest, drawing widespread media coverage. For example, Christie’s New York sold the Hancock Red for almost US$1 million per carat in 1987. Andre Gumuchian’s Spectrum Collection and Eddy Elzas’s Rainbow Collection were also shown at the American Museum of Natural History in New York during these years.
With its high yield of colored diamonds, Argyle joined in this mix of activity by developing innovative advertising and marketing campaigns. These efforts, while bringing attention to their brown “champagne” and “cognac” as well as rare pink diamonds, also heightened awareness of colored diamonds overall.
THE ARGYLE MINE
The Argyle mine is in the East Kimberley region of Western Australia, 500 km (340 mi) southwest of Darwin and more than 2,200 km (1,400 mi) northeast of Perth. Systematic exploration began in 1969, following the discovery of a few alluvial diamonds in the area, but another decade of careful fieldwork passed before geologists recognized the host rock as a diamond-bearing lamproite pipe. Several more years were required to develop the site, and the mine became fully operational in late 1985. Over the next 25 years, mining was carried out from a large open pit. In the early years of the 21st century, recognition of the finite economic lifetime of this open pit led to feasibility studies of underground mining operations, which began in 2013.
This decision has been made to end the life of the mine in 2020, with an expected production of up to 20 million carats per year over the life of the underground mine. The output is dominated by near-colorless to brown diamonds, but from the beginning there has been a small but consistent supply of pinks, comprising less than 0.001% of the mine’s total annual production. This deposit supplies the best and most highly sought after pink diamonds in the marketplace, and no other source is known to produce pink diamonds of anywhere near the quality of Argyle.
ARGYLE TENDERS
The autumn of 2014 marked the 30th Argyle pink diamond tender. Each year has witnessed increasing participation and competition among investors and collectors and dealers alike for the opportunity to place sealed bids on these select goods. While most of the diamonds tendered over the years have been pink and purplish pink, a few reds (and even other colors such as blue, violet, orange, and yellow) are occasionally offered.
The first tender, consisting of 33 diamonds, took place in Antwerp in 1985.
The following year, Geneva was added as a viewing venue. As interest in these events has grown, previews have been held in New York, Hong Kong, London, Perth, and Tokyo. The number of venues continues to change over the years, as does the number of diamonds on view—some tenders have included 70 or more.
Argyle’s tender process only adds to the excitement that surrounds these diamonds. The list of invitees is not made public. Those who bid are provided limited-edition catalogs highlighting key information on each diamond. While they have ample time to review the data from the catalog, an invitation to view allows a time slot of approximately one hour in which to make bidding decisions. Despite this time constraint, the participants are seasoned professionals who know the range of pink diamond color appearances and how they relate to value. In any given city, the site remains unknown until just before the viewings. When setting up to show 30 to 80 pink diamonds in one location, security is crucial.
Upon arrival, the observer finds the diamonds displayed in small individual sealed cases. Weight and color grade are noted on each case. Loupe and other intricate equipment are supplied, but many experts bring their own. In some instances, they bring samples for comparison. As is typical in many diamond offices, desk lamps with fluorescent lights are available as well as daylight. While this arrangement does not represent the standard used in a laboratory, most dealers are comfortable with it as it resembles their own office conditions.
Following the viewing, participants make decisions about individual stones or, in some instances, the entire lot. Argyle does not publish the winning bidders or final prices; when reported in the press, it is at the discretion of the buyer.
While GIA has graded all the tender stones, the refinement of its color grading system for colored diamonds in 1995 allowed a more detailed, boundary-distinct color language for these pink diamonds than ever before. With the addition of grades such as Fancy, Fancy Intense, and Fancy Vivid, the tender diamonds were better recognized for their uniqueness and rich color appearances. Interest in Argyle pink diamonds certainly expands beyond the activity surrounding tenders. Over the past five years, GIA’s laboratory has produced custom monograph reports for exceptional diamonds, colored gemstones, pearls, and jewelry pieces. Over the years, several authors have described the gemological characteristics of pink diamonds from the Argyle mine detailing the exquisite quality of the pink diamonds discovered in Western Australia during the mine’s years of operation. Particularly noted was the Argyle mine’s dramatic impact on the world market: In 1986, one year after the mine became fully operational, Australia was the largest source of diamonds.
PINK ARGYLE DIAMOND ACHIEVES RECORD PRICE PER CARAT
According to a company press release, Rio Tinto’s 2016 Pink Diamonds Tender collection of 63 rare pink, red and violet diamonds from its Argyle mine has delivered a record result, reflecting strong global demand for these increasingly rare diamonds.
Known as The Chroma Collection, the 2016 Argyle Pink Diamonds Tender comprised the usual high quality Argyle diamonds which has been typical in the Tender’s 32 year history and was highly sought after, with winners from 10 countries including a strong representation from the sophisticated US collector market. The 2016 Argyle Pink Diamonds Tender achieved the highest average price per carat since the Tender began in 1984, although true to form the Anglo-Australian miner did not disclose the price.
Reports from the record-setting 2015 auction suggested an average price per carat of well over $1 million. Over the past 15 years the value of Argyle pink diamonds sold at Tender have appreciated over 300%.
Rio Tinto Diamonds general manager of sales Patrick Coppens said “We are delighted with the results of this year’s historic collection. Argyle’s pink, red and violet Tender diamonds are in a class of their own in terms of rarity, beauty and provenance. These natural coloured diamonds are truly beyond rare.” Argyle Pink Diamonds manager Josephine Johnson adds,
“The market fundamentals for pink diamonds strong demand as a result of extremely limited supply continue to support their significant value appreciation.“
Rio Tinto’s Argyle mine produces virtually the entire world’s supply of rare pink diamonds, with the finest from a full year’s production showcased in the annual Argyle Pink Diamonds Tender. The 2016 Tender was the first to comprise diamonds solely from Argyle’s underground mine.
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