Ammolite is composed of the fossilised shells of Ammonites. The different layers of the shell, which is formed of Aragonite, yield different colours - blues and purples are the top layers, which are the hardest to find as they are the first ones to erode or get damaged. Then comes greens and yellows, and finally reds are the deepest layer.
Ammolite is a trade name given to a thin iridescent aragonite shell material that is found on two species of extinct ammonite fossils (Placenticeras meeki and Placenticeras intercalare). 
Ammolite is a rare material. All of the world's commercial production comes from a small area along the St. Mary River in southwestern Alberta, Canada, in the Bearpaw Formation where the ammonite fossils are found.