An Ammonite was an octopus-like creature with the its top half encased in a shell. When the Ammonites died off, the empty shells would fall to the bottom of the sea. The name "Ammonite" is derived from the ancient Egyptian god named Ammon who believed these creatures were divine.
The "L" replaces the "N" in the name "Ammolite," suggesting the luminous colors of the stone.