Tiffany's? Hardly. We Pick Ours Up in Laramie

A glistening fortune lies waiting beneath the sagebrush. Or so they might have you believe.

Oct 1, 1998
Outside Magazine

Hell is paved with diamonds. So, perhaps, is Wyoming.

An aeon ago, say 1.2 billion years ago, before there was a Wyoming, layers of carbon 100 miles below the Earth's crust crystallized in the infernal heat and pressure of the upper mantle, and the Stygian darkness was salted with newborn diamonds. Merely hundreds of millions of years ago, scientists believe, boiling kimberlite magma blasted upward through this layer of diamonds at twice the speed of sound and exploded right out of the ground, tracking diamonds along its fissures like a man diving headlong through a plate-glass window. When the magma cooled, diamonds hung suspended in pipes of kimberlite.

The graphite pencil lead with which I write these sentences is almost a diamond: Both graphite and diamonds are pure carbon. But the magical arrangement of the diamond's carbon atoms is stacked more tightly and then compressed by millions of pounds of pressure in a lake of fire. Diamonds are a good sight harder to find than pencils, especially here in North America — or so everyone thought until quite recently.

There are only about 4,000 known kimberlite pipes on the entire planet. Only one-half of one percent of them have turned out to bear commercial-quality diamonds in large quantities. South Africa, of course, has been blessed with diamonds, along with Botswana, Angola, and Namibia. So have Australia, Russia, and the Congo. These seven countries produce more than 80 percent of the world's supply, with a scattering of other African, Asian, and South American nations accounting for the rest.

Never mind them. Those countries may be responsible for putting the sparkle into the $52 billion world market in diamond jewelry, but they're not the reason rash talk is sweeping from the statehouse in Cheyenne to the windscapes of the Green River Basin, where a cowboy is rumored to have plucked a gem-quality rough stone from among the cow cakes. It's not even so much that an impressive scattering of small but excellent-quality diamonds has been found in southern Wyoming over the past few years, though nowhere in quantities deemed worthy of commercial exploitation. No, the twin inspirational forces driving the great millennial Wyoming Diamond Rush are just to the south and far to the north, in Colorado and Canada.

Canada in 1998 is where Wyoming wants to be in the not-too-distant future. In the early '90s, rich deposits of diamonds were discovered at a pair of remote sites in the Northwest Territories. Two mining consortiums are now spending a total of $1.8 billion to begin extracting diamonds from the Ekati Mine, which will commence operation this fall, and the Diavik Mine, expected to be ready for production by 2002. (There are only 21 other working diamond mines in the world.) By some estimates, Canada has the potential to become the fourth-largest supplier of diamonds in just a few years' time. But northern Canada has almost run out of unstaked ground, so future North American explorations are going to have to look south.

Colorado can't boast such an enormous bonanza-in-the-making, but in a sense it possesses something better: the Kelsey Lake Mine, home of the first and only successful diamond-producing lode in U.S. history. Since it was brought into production in 1996, the modestly sized yet lucrative mine has already disgorged tens of thousands of diamonds, including a 5.4-carat gem that fetched $90,000 and a 17-carat monster recently sold at auction. The buyer was anonymous, the price undisclosed, but the minimum bid was set at $300,000.

That the Kelsey Lake Mine is only 25 miles south of Laramie, just over the Wyoming-Colorado state line, has rendered it all the more tantalizing to a growing stampede of geology-minded Wyomingites. They've also been keeping an eye on the Canadian carpetbaggers who have taken to hopping from one patch of Wyoming blueground (that's kimberlite in mining vernacular) to another in search of the next Ekati or Diavik.

Now, like the perennial bridesmaid who waits impatiently for her own glinting solitaire, Wyoming is in the mood for its piece of the rock. Rumor, surmise, and whispered tales of sure-thing claims are circulating via sagebrush telegraph, and diamond fever is spreading like Canada thistle across the Big Wonderful. It's madness, of course — except that one of the clearest heads in the state is quietly telling citizens that the long-awaited payout is just around the corner.

It's a hot summer day, and I'm bumping along a dirt road in the Iron Mountain section of Wyoming's Laramie Range, dodging rattlesnakes in a pickup truck with Dan Hausel, age 49, the senior economic geologist for the Wyoming State Geological Survey. He wants to show me a kimberlite complex he's particularly enthusiastic about. We've got the windows down, and suddenly the dry sound of an annoyed rattler echoes in the cab. Hausel, who has a bad left ear and has trouble pinpointing where the sound is coming from, goes into a mild panic, surveying the floorboards for snakes before stepping hard on the brake pedal and shifting the truck into reverse. We bounce backward 10 yards or so until the sound caroming around the cab intensifies. To Hausel's relief, we spot the coiled diamondback out there alongside the road.

I'm quickly discovering that this is about as excited as Hausel gets, even though, as Wyoming's chief lobbyist for a vision of the future bright with gem bonanzas, you might expect him to offer up loud hype. Instead, the Utah native brings an even, considered tone to his argument that Wyoming is as diamondiferous — to use the technical term — as any place on earth.

The truck stops, and Hausel ascends a steep, gully-braided hillside of blueground like a mountain goat. "Notice how the grass is taller on the kimberlite," he observes. "And no trees. Trees generally don't grow on the pipes."

He gestures at the ridge around us. "I've been telling people for a long time that somebody should pick up these Iron Mountain kimberlites," he tells me. "It's crazy they're just sitting here."

In fact, Hausel says, this whole region possesses an embarrassment of latent riches. All around us is the Wyoming Craton, the continental puzzle piece supporting Wyoming, a good deal of Montana, and small parts of Utah, Idaho, Nevada, and Colorado. In recent years, geologists have mapped more than 100 kimberlite pipes on the craton, close to 80 of them in Wyoming itself.

OK, but where are the diamonds?

Hausel's reply blends mild boosterism with a gospel of delayed gratification. "The Wyoming Craton has by far the highest potential for discovery of commercial diamond deposits of anywhere in the United States," he asserts, "but we're still in the infant stage of exploration." Even though Colorado hit pay dirt first, only a fraction of that state lies on the Wyoming Craton. Nearly all of Wyoming does. Furthermore, explains Hausel, exploration is quite painstaking; the more kimberlite, the more work. "One site might be diamondiferous and one might not be. You have to sample every one of them individually."

But in the next breath Hausel seems to be rebelling against his own predilections. "Most geologists are pessimists," he declares ruefully. "They'll say, 'If the diamonds are here, how come somebody hasn't found them?' What they ought to do is require geologists to take psychology courses taught by prospectors. Every prospector thinks, 'Just dig a little deeper.' Not geologists."

Hausel sorts through a pile of kimberlite samples the size of paperweights. "Here," he says, handing me a weathered chunk of blue rock. "Take your wife a diamond."

In F. Scott Fitzgerald's story "the Diamond as Big as the Ritz," a boy from a Mississippi River town called Hades visits an evil man who lives in a palace on a mountain in the West. The mountain, the boy comes to learn, is in fact a single massive diamond: "one cubic mile without a flaw." When the palace is threatened with destruction, the evil man tries to bribe God with a diamond as big as a calf — "some advance sample, a promise of more to follow." God doesn't take the bait.

Diamonds have always incited unseemly hopes. In the early 1870s, the vast gem fields of South Africa had just been discovered, and stories of glorious American diamond deposits "somewhere in the western deserts" began to excite interest among the world's financiers. There were rumors of an Apache, the legend goes, with a "diamond an inch long and half-as-thick as a man's thumb."

In 1871, failed Gold Rush rounders John Slack and Philip Arnold lured a San Francisco investor named Asbury Harpending to a mountain in northern Colorado they called Diamond Peak. As Harpending told the tale, Arnold informed him that he and Slack had been led by a Pima Indian to a magnificent diamond field where the two men filled their pockets with fistfuls of gems.

Harpending — who, with a rap sheet resulting from a Civil War privateering conviction, was no angel himself — caught a train to New York. Before a distinguished group of businessmen that included the unlikely triumvirate of General George McClellan, newspaper magnate Horace Greeley, and jewelry baron Charles Tiffany, he shook out a bag of diamonds, rubies, sapphires, and emeralds onto the table. Eyes widened, and according to one account, Tiffany sat hunched like a miser, poring over the gems. All real, he pronounced.

On June 1, 1872, Harpending and a half-dozen investors stepped off the train in Rawlins, Wyoming, and guided by Slack and Arnold rode a zigzag route into the badlands, then hostile Indian country. They reached the X on the treasure map in late afternoon and immediately began stabbing in the dirt with their knives as if digging breastworks for a firefight. "I had not been on the ground three minutes before I found a large diamond," Harpending said later. That day, he claimed, they bagged more than 500 gems.

"A wonderful story," gushed one local newspaper, the Laramie Daily Independent. "THE GREAT DIAMOND FIELDS OF AMERICA/FULL PARTICULARS RIGHT FROM HEAD-QUR'S/SECRET MADE PUBLIC FOR THE FIRST TIME/LARGE DIAMOND STORES/$250,000,000 WORTH FOUND." Stories circulated of diamonds in the forks of trees. Out-of-work gold prospectors arrived in droves.

Later that year, Clarence King, the founding director of the U.S. Geological Survey, caught wind of the rush and mounted an expedition to personally investigate Diamond Peak. Upon arriving at the claim site, King's group began poking around. An elderly German mule skinner was the first to confirm the near-miraculous nature of the strike. "Look, Mr. King!" he cried, holding up a partially faceted diamond he had unearthed in an anthill. "This is the bulliest diamond field as ever was! It not only produces diamonds, it cuts them!" As it turned out, Arnold and Slack, with the probable connivance of Harpending, had sown $35,000 worth of poor-quality gems on that mountain in a fraudulent scheme to sell mining-company shares to 25 investors who had ponied up $80,000 each.

The hoax put geologists and prospectors off the trail of diamonds for a century, but the irony is that the geology was there all along. Due east 180 miles from the swindlers' mountain is another Diamond Peak (a place name as ubiquitous in the West as Dead Man Gulch). In its shadow sits Colorado's Kelsey Lake Mine.

Dan Hausel owns several of Arnold and Slack's salted gems, which can still be found near Diamond Peak today. Though he hasn't had to contend with any contemporary scam of such magnitude, he has often found himself forced to offer words of discouragement to feverish ranchers, prospectors, and other citizens who believe they've won the diamond lottery. Not long ago an entire family — mom, dad, four kids — showed up at Hausel's office in Laramie with a stone, unearthed at an undisclosed location in Wyoming, that they said was the biggest diamond in the world. A jeweler had told them so. "I could tell immediately by looking at it that it was quartz," Hausel says. They didn't believe him. Picking up a tool, he easily scratched the quartz. The family became very upset that he had scratched their diamond. "If it were a diamond, it wouldn't scratch," he told them. They demanded to see another geologist and were led to the office of Ray Harris, the Wyoming Survey's uranium and industrial minerals geologist, who unfortunately dropped the rock on the tile floor, whereupon the biggest diamond in the world broke into little pieces.

Despite his staunchly circumspect manner, it is Hausel himself who has salted the minds of would-be tycoons with dreams of diamonds. Last winter, in a kind of outreach to the North American extractive industries community, he sat down and wrote a letter that was subsequently published in the Canadian weekly Northern Miner. "What really amazes me," he wrote, was that while large-scale diamond exploration was proceeding apace in Canada, "there are several proven targets in the Wyoming Craton that apparently few people are paying attention to." After enumerating a highly technical inventory of Wyoming's diamondiferous assets, Hausel concluded with this somewhat restrained stab at enticement: "The Wyoming Craton is every bit as desolate as parts of Canada, but we probably have more anomalies per square mile than Alberta and Saskatchewan with, comparatively, very little exploration effort." For good measure, Hausel then decided to send the same letter to the Bisbee, Arizona-based magazine Pay Dirt, taking care to replace all references to Northern Miner in his text with the name Pay Dirt. The American monthly promptly published the letter too.

Immediately thereafter Hausel's phone lit up, and he found himself spending much of his time office-bound, answering queries from corporate executives, amateur miners, landowners, and other interested parties. Coal miners started talking diamonds on their lunch breaks. Regulars at a Fort Bridger bar stopped leading pack mules after Shoshone gold and started hunting diamonds. Meanwhile, Hausel fielded several requests to speak before local prospectors' groups. In April, he drew a standing-room-only crowd of 150 at the Rock Springs Gem and Mineral Club. In July he spoke to what he likes to call "a captive audience" at a Fort Collins funeral home, where the Rocky Mountain Gold Prospectors and Treasure Hunters Club holds its colloquies. At first the rock hounds were very enthusiastic, but after Hausel finished telling them how difficult diamond prospecting is, they turned glum.

Your basic frozen-in-amber prospector — Geiger counter mounted to the bumper of his Willys Jeep, pulled by mules since his cache of gasoline ran dry; gray beard down to the derringer in his belt — will not be the man who cries eureka when the first Wyoming diamonds worth mining are found. For one thing, if that character still exists, no one seems to know him: The new breed of diamond hunter long since traded in his Willys for a Ph.D. and a stack of satellite survey photographs. For another, the dirty little secret of diamond exploration is that it requires a tremendous investment of time and money. It's no accident that the Canadians will have spent more than a billion dollars before the diamonds start coming to light north of the timberline past Yellowknife.

Geologist Gordon Marlatt is one of the new breed. A slim, bandy man in his 40s, he wears a sweater and tortoiseshell glasses, holds a doctorate from the University of Wyoming, and owns a custom four-wheel-drive Chevy van that serves as his geochemistry field lab.

Marlatt has the slightly tentative spring in his step of a man about to become very rich, maybe. Early last year, led to the Iron Mountain area by Hausel, he and a business partner staked the sweetest of kimberlites — kimberlites rich in eclogite, an indicator favorable to diamonds. Exciting stuff, no?

"Peel back all the smoke and mirrors, and you'll find that diamond mining is just another business," Marlatt avers. "It's inhabited by some of the dullest guys in the free world, of whom I proudly include myself. The goddamned open spaces of this state are paved with claim posts that have fallen over. If you want to get rich, find a gravel pit."

Some of that grouchiness may be strategic. Word around the campfire is that Marlatt and his partner, Casper geologist Paul Graff, want far too much up-front money — a rumored $4 million, although Marlatt says figures are negotiable — for working privileges to their Iron Mountain claims. So far they've gotten no takers. But recently some of Marlatt's rock tested in Hausel's lab turned up G-10 pyrope garnets, always good diamond indicators, and copper giant Kennecott has sent samples to its processing facility in Canada. So Marlatt waits.

A much more ebullient late-model prospector is Richard A. Boulay, president of Marum Resources, a gold-and-diamond exploration enterprise based in Calgary. Boulay is a geologist-turned-financier who has "exploration activities" underway in Alberta and Montana in addition to Wyoming. He believes that by 2010 Canada could be the world's number-one producer of diamonds, and that Wyoming could be a player by then too. He dismisses the possibility that past performance may be an indicator of future promise.

"Look," he maintains, "thanks to technology, land becomes virgin every 20 years, and that's what's happening in Wyoming. You've got all the things to make it work — all the geological elements, and they're almost perfect. Plus, it's virtually unexplored. I've been to areas of Africa that are more explored. For people in Vancouver or New York, Laramie is the end of the world. Somehow they can get to Mozambique, but they can't get to Wyoming. You don't have an EPA in Mozambique, but unlike in Wyoming it'll run you $100 to make a phone call." With that, the world's new brand of prospector paused to whip up some cappuccino.

The last time the big-time fever hit was in 1975, when a Wyoming rock sample scratched a grinding wheel at the USGS office in Denver, and close inspection with a microscope showed minute diamonds, but diamonds nonetheless. Within 48 hours geologists flew in from South Africa. A Canadian-owned mining outfit called Cominco American was the first to begin commercial exploration, and it spent millions on the Wyoming-Colorado line finding hundreds of pinhead-size diamonds and a few larger ones up to a carat in size. But not enough were De Beers quality, nor did the claim sites show much promise as producers for the industrial diamond market (90 percent of which are produced synthetically anyway). In 1986, the company pulled up stakes. That might have been the end of it but for new technologies, new kimberlite discoveries, and most of all, newly risen hopes.

Desire matters. The bottom has fallen out of the minerals industry, and Wyoming's economy needs a boom that tourists alone can't provide. Many would like to see a diamond frenzy equivalent in magnitude to the several oil booms or the halcyon days of the Cold War uranium rush, when companies, in their haste to get in on the profits, dropped claim posts from helicopters. But few minerals companies have the fat exploration budgets they once did, and one of Wyoming's problems may be that few players in the diamond business have the deep pockets to go the expensive distance from widespread searching to actually bringing back the mother lode many believe is out there. Meanwhile, those who are willing to invest in Wyoming diamonds have made a leap of faith that harks back to a prospector such as Chuck Fipke, a Canadian who, down to his last dollar, finally discovered the Northwest Territory's first big strike in 1991.

Despite the dust he's kicked up, Dan Hausel is still waging a lonely crusade. When I recently asked Wyoming governor Jim Geringer about how diamonds will figure in the state's future, he didn't have much to say. "A guy could probably sell digging rights to tourists passing by," he joked. He seemed more interested in telling me about the black granite quarried near Wheatland, his hometown, that was being used in Bill Gates's Xanadu-like house near Seattle.

In the end, Geringer referred me back to Hausel, who, perhaps surprisingly, has never considered giving up his civil service wages for a miner's uncertain payday. "I'd probably starve if I tried it," he says, laughing. "I don't have the patience."

So the glittering gems are still there; or maybe they aren't. You can believe those like Hausel, who say they will be found, or you can heed the sardonic words of one who already got his. "Wyoming has reasonable potential," says Howard Coopersmith, the ponytailed California native who found his crystalline needle in the haystack with the Kelsey Lake Mine. "But all the diamonds are in Colorado."

Or you can put your faith in Wyoming's apocryphal diamond cowboy — the one with a rock the size of the Ritz in the back pocket of his Wranglers.

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