Friday 28th October 2016

Resource Clips

Searching in Redemption

Arctic Star and North Arrow want to uncover more Northwest Territories diamonds

by Greg Klein

The circumstances seem just about right. Studies forecast diamond demand overtaking supply, Canadian diamonds enjoy special prestige for quality and ethical production, and advances in geophysics have improved the likelihood of discovery. Under these fortuitous conditions Arctic Star Exploration TSXV:ADD and North Arrow Minerals TSXV:NAR have mobilized to drill their Redemption project in the Northwest Territories’ diamond-producing Lac de Gras region. In doing so, some veteran explorers join forces again, searching for further success.

It was Lac de Gras that first brought Canada fame as a gemstone producer. The region currently hosts three of Canada’s four operating mines. The 11,493-hectare Redemption has proximity to two of them, Dominion Diamond’s (TSX:DDC) Ekati mine, 32 kilometres northeast, and Diavik (40% Dominion, 60% Rio Tinto NYE:RIO), 47 klicks east. Diavik looms large in the backgrounds of people involved in the Arctic Star/North Arrow joint venture.

Arctic Star and North Arrow want to uncover more Northwest Territories diamonds

The Redemption camp during last spring’s geophysical surveys.

Buddy Doyle, Arctic Star’s VP of exploration, got started in diamonds with Rio Tinto during the 1970s Australian rush. He eventually left Rio for Kennecott Exploration Australia and was dispatched to Papua New Guinea, where he took part in the famous Minifie gold discovery at Lihir.

“That was exciting and then Rio Tinto bought Kennecott, so I ended up back with Rio,” Doyle recounts. “The diamond rush broke out in Canada and I was one of a few people left from the Australian rush, so they transferred me to Canada.” He then led an exploration team involved in the Diavik discovery.

That was under a JV between the Rio subsidiary and Aber Resources. “But the junior gets talked about and the major doesn’t,” says Doyle. “I get a $5,000 bonus, their share price goes to 50 bucks.”

Nevertheless, “the people at Aber are good friends and now some of them are with North Arrow,” he adds. Among them are North Arrow president/CEO Ken Armstrong, adviser Eira Thomas, chairperson Grenville Thomas and director Christopher Jennings. They have, as Doyle describes it, “the Lukas Lundin machine behind them.”

Now North Arrow is funding Redemption under a 55% earn-in which would call for $5 million in exploration by July 1, 2017. This summer’s agenda entails six to eight holes totalling about 1,000 metres. North Arrow acts as project operator but Doyle will maintain a presence at the camp.

A primary focus is the South Coppermine train, described by North Arrow as the “last remaining big, unsourced Lac de Gras indicator mineral train,” a trail of glacial till containing minerals that originated in a kimberlite body that might contain diamonds.

“The targets we have now are gravity-based,” Doyle points out. “This is a fairly new technology that was exclusive to BHP [NYE:BHP] before they sold it. It’s got better and better and better. I used it 10 years ago and didn’t like it but now it’s really good.”

As the original owner of Ekati, BHP flew a gravity survey over that project and “found a dozen more kimberlites that weren’t detected by anything else,” Doyle says. “So we flew the system at the head of this indicator train. Right at the head of the train, where you’d expect the source to be, we’ve got a very nice gravity and magnetic anomaly. Then we’ve got eight other anomalies in similar positions that explain other indicator trains.”

Geochemistry, as well as diamonds within the till, confirm the kimberlites bear diamonds. “The good thing about indicators is you can diagnose them and say the source is going to be diamondiferous,” Doyle explains. “You can’t say it’s going to be economic, but you can say it’s going to be diamondiferous.”

Right at the head of the train, where you’d expect the source to be, we’ve got a very nice gravity and magnetic anomaly. Then we’ve got eight other anomalies in similar positions that explain other indicator trains.—Buddy Doyle, VP of exploration for Arctic Star

“So we’re very encouraged and there are a whole bunch of lake targets to drill as well,” he says. “We’re just drilling on land this summer, then there’s a half-dozen more to drill next winter. It’s going to be an exciting program.”

The campaign takes place at a time when money is flowing around some of the more advanced projects. Earlier this month Dominion announced its intention to buy out Ekati diamond pioneer Chuck Fipke in a deal that could bring his company $67 million.

One day previous, Stornoway Diamond TSX:SWY closed “the largest-ever project financing package for a publicly listed diamond company,” a $946-million package to put its Renard project in Quebec into production. Back in the NWT late last month, Mountain Province Diamonds TSX:MPV closed a $45.5-million private placement to help fund Gahcho Kué, a 49%/51% JV with De Beers that’s labelled “the world’s largest and richest new diamond development project.” A few days later Mountain Province announced that drilling outside the project’s Tuzo Deep resource confirmed kimberlite to a depth of 740 metres below surface.

For all the big money pouring into advanced projects, one recent acquisition suggests the NWT might still have fertile ground for early-stage exploration. Early this month Prima Diamond TSXV:PMD announced acquisition of the Godspeed Lake property immediately south of Gahcho Kué.

In more advanced work north of Gahcho Kué, Kennady Diamonds TSXV:KDI, a Mountain Province spinout, has announced a minimum 5,000-metre summer program to delineate its Kelvin and Faraday kimberlites, as well as explore other areas of the Kennady North project.


Read more about diamond mining and exploration in Canada:

  • A bourse marks its course: The Diamond Bourse of Canada wants to encourage secondary industry while enhancing our global stature

Disclaimer: Prima Diamond Corp is a client of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in Prima Diamond.

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