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An Australian company, Ashton Mining Ltd, started exploring for diamonds in the Kimberley in 1972, under the Kalumburu Joint Venture (the name Kalumburu was adopted from a nearby settlement). The project commenced following a proposal from a geologist with diamond exploration experience in Africa, to explore the Kimberley region for diamonds.

The geologist was employed to devise an exploration program that was based on geology studies at the University of Western Australia. These studies suggested there were similarities between a rock known to exist in northern Western Australia (and later known as lamproite) and kimberlite, the diamond-bearing rock found in other parts of the world.

The exploration program began in 1972 and over the next few years small diamond and alluvial deposits were discovered.

In 1976 CRA Ltd (later to become Rio Tinto Ltd) took over management of the group, which became known as the Ashton Joint Venture. CRA introduced a number of specific exploration objectives, including finding a diamond that was larger than a quarter of a carat, then to find a diamond-bearing pipe and finally a diamond-bearing pipe with a diamond grade high enough to justify a mine.

The basic search method used was to collect sediment samples from the bottom of the Kimberley waterway beds. The theory was that, as the area is well watered in the wet season, if it did contain any exposed pipes, they might be crossed by creeks or rivers. As a result diamonds and indicator minerals would have been washed downstream as the tops of the pipes were eroded.

Helicopters were used extensively due to the remote nature of the Kimberley and lack of roads and infrastructure.

In 1977 testing of the diamond-bearing Big Spring No.1 pipe and others nearby found small diamonds. Big Spring contributed to the explorers' knowledge of the geology of Australian diamonds, particularly with regard to the presence of diamonds in lamproite.

Between 1977 and 1980 significant effort went into assessing a series of pipes in the Ellendale area. A central treatment plant was constructed, and 12,000 diamonds were recovered from 230,000 tonnes of lamproite. However, it was decided that the grade of the Ellendale deposits was not high enough to warrant the establishment of a mine.

In August 1979, diamonds were found in a sample collected from Smoke Creek, in the Ragged Ranges. Smoke Creek runs 35kms from the Matsu Range to Lake Argyle. Exploration crews began to work their way along the creek, finding an increasing number of stones as they progressed.

By October 1979 they had discovered the main Argyle mine pipe known as the AK1 pipe, after one of the geologists first spotted a small diamond embedded in an anthill. Following the October 1979 find, it took three years to assess the deposit.

In 1983 a decision was taken to establish a mine. The Argyle Diamond Mines Joint Venture and the Argyle Exploration Joint Venture were formed to replace the Ashton Joint Venture.

Alluvial mining commenced at Smoke Creek in 1983, and the construction of the nearby Argyle mine began in 1984. Argyle Diamonds was named after Lake Argyle, which lies to the north of the site.

The $450 million construction of the AK1 process plant and associated infrastructure took just 18 months, and the fact that it was completed on schedule and on budget was a tribute to the skills and engineering feats of the workforce.

The Argyle Diamond Mine was commissioned in December 1985.