The USBM weren't looking for things (like diamonds) that couldn't possibly be there - the geology is all wrong. They were drilling as part of a war-time effort to find lead, zinc, copper, etc. Plus, there is no "assay" for diamonds, rubies, or emeralds. You'd have to do some kind of bulk sampling, and a way to estimate carats/ton.
No, the whole story is nonsense. I simply don't understand why anyone would believe it.
Here's the last big diamond fantasy story spun up in Arizona:
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