Wednesday 13th December 2017

Resource Clips


August, 2015

Pasinex Resources president/CEO Steve Williams explains how small-scale mining coincides with maiden resource drilling at the company’s Pinargozu zinc project in Turkey

August 31st, 2015

…Read more

August 31st, 2015

Is gold production peaking? GoldSeek
Why a Fed rate hike could be a blessing for gold prices: Brien Lundin Streetwise Reports
Seven reasons why the market has gone totally nuts NAI 500
China probing brokers, two employees of securities regulator for possible stock market offences Stockhouse
Keep your house warm with “volcanic popcorn” Geology for Investors
Will Tesla’s Powerwall succeed in Europe? Equities Canada
Chinese soda ash: Mission creep Industrial Minerals

Renowned Saskatchewan diamond cutter to shape tourist’s chance find

August 28th, 2015

by Greg Klein | August 28, 2015

It all started when a vacationer spotted a nice-looking rock lying in the dirt. That turned out to be a truly exceptional diamond that’s to be transformed by a Saskatchewan master cutter in a four-day public event. Next month Mike Botha, a renowned craftsman based in Prince Albert, travels to Little Rock to apply his skills to the Esperanza, an 8.52-carat gem found last June by Bobbie Oskarson in Arkansas’ Crater of Diamonds State Park. After setting up a mini-factory at Stanley Jewelers Gemologist he’ll offer the public “a unique opportunity to watch a master craftsman’s precision as he cuts and shapes the rough stone to bring out its inherent beauty, value and luminosity,” according to the retail store.

Renowned Saskatchewan diamond cutter to shape tourist’s chance find

Mike Botha
(Photo: Embee Diamonds)

Speaking to ResourceClips.com, Botha extolled the qualities of Oskarson’s chance find. “The stone is absolutely colourless,” he enthuses. Quite unusually, an analysis found zero parts per billion nitrogen. “So we have reason to believe this is one of the most colourless diamonds you could ever find. And the clarity is phenomenal. There are absolutely no inclusions [impurities] from what we could see.” Further analysis found no stress zones, “which is also a good indicator of it being absolutely inclusion-free. It’s a pretty pure stone.”

His craft calls for “planning, planning, planning,” he explains. “It’s like doing wood, but measure 10 times, cut once. It’s very painstaking.

“We did 3D solid modelling of the rough crystal and out of that we chose a design called the triolette that would maximize the visual appeal as well as maximize the material. It’s like an elongated teardrop but it has angles instead of being a smooth curve, unlike the briolette. But the angles are very obtuse and there’s a mixture of emerald and trapezoid configurations in the diamond.”

Could there be any risk? “Through stupidity, yes,” Botha responds. But with no apparent stress zones, “we have reason to believe it’s a very healthy diamond so we do not foresee problems with the stone breaking spontaneously.”

Renowned Saskatchewan diamond cutter to shape tourist’s chance find

The Esperanza
(Photo: ©AGS Laboratories, Peter Yantzer)

The result will inevitably weigh less than the original. But he anticipates finishing up with the “magic five” carats, considered an optimal size for jewelry.

The gem then goes to a lab for final grading before being mounted in a custom-designed pendant. It’s expected to go on sale this autumn.

Oskarson sold Esperanza to a consortium in which she retains an interest, Botha says. “We believe there’s a lot of blue sky in the project.” He’s not at liberty to discuss his own remuneration, however.

As for having an audience throughout four days of painstaking work, “it doesn’t bother me, as long as I don’t have to do the talking. We’ll have some spokespeople to do that.”

Botha began his career in South Africa and briefly worked in Russia before coming to Canada in 1997. His first contract here had him cutting some exceptionally large stones, “a 314-carat and a couple of 100-carat diamonds” from Brazil. The Northwest Territories, the world’s third-largest rough diamond producer by value, recruited him to write a curriculum and provide training, as well as do consulting work for the government.

Renowned Saskatchewan diamond cutter to shape tourist’s chance find

Bobbie Oskarson
(Photo: Arkansas State Parks)

There had been some diamond cutting in Yellowknife “but I don’t know what the status on that is,” he says. Although the territory tried to encourage home-grown professionals, “it’s not cost-effective,” Botha maintains. “Just to run an operation in the Arctic is senseless. Everything’s so expensive. You cannot compete with countries like India and China in that respect.”

Canada currently has “one outfit in Vancouver, one in Montreal, more than one in Toronto. But these are not large facilities. The largest at the moment is HRA in Sudbury.” His family business, Embee Diamonds, describes itself as a “world-class diamond cutting and polishing atelier” located in Prince Albert. “The reason we’re surviving is most of our business is with United States jewellers, so we don’t go through a middleman. It’s direct to the retailer.”

As for diamonds mined in this country, almost all go to Antwerp. “The Diamond High Council in Belgium did a phenomenal job to recruit all the mining companies to put up distribution and sorting facilities in Belgium.” From there, “probably 90% of Canadian stones go to India for cutting and polishing.”

August 28th, 2015

Why a Fed rate hike could be a blessing for gold prices: Brien Lundin Streetwise Reports
Seven reasons why the market has gone totally nuts NAI 500
China probing brokers, two employees of securities regulator for possible stock market offences Stockhouse
Keep your house warm with “volcanic popcorn” Geology for Investors
Will Tesla’s Powerwall succeed in Europe? Equities Canada
Chinese soda ash: Mission creep Industrial Minerals
China not immune to contagious quantitative easing and massive printing of cheap money GoldSeek

Looking to Lac de Gras

August 27th, 2015

World diamond production drops but Canadians compete to make up the shortfall

by Greg Klein

An almost 4% increase in global diamond production by value last year coincided with an almost 4% drop in volume. Numbers released August 25 by the Kimberley Process Certification Scheme indicate higher prices kept revenue growing despite lower output. But, should December’s optimistic forecasts hold, demand will call for new sources. Among the most promising locations is Canada, which the Kimberley Process says held its third place spot for global production by value even as Russia pushed Botswana into second place. In fact Canada owes its status to just one region of the Northwest Territories, Lac de Gras, which hosts three current mines, a soon-to-be fourth and an encouraging exploration play.

The region’s most recent entry is Zimtu Capital TSXV:ZC, which on August 25 announced exploration had begun on the Munn Lake project held by the company and a staking partner. Despite about $5.7 million of work between 1996 and 2007 that found two diamondiferous kimberlites, the 14,000-hectare property has yet to undergo modern exploration.

World diamond production drops but Canadians compete to make up the shortfall

Of four kimberlites under its focus, Kennady Diamonds plans a
2015 maiden resource for Kelvin, further infill drilling for Faraday
1 and 2, and exploration at MZ.

Yet a previous 581-kilogram sample from the project’s Yuryi kimberlite showed 226 diamonds, among them 62 macro-diamonds above 0.5 millimetres in diameter. A 42-kilo sample from the Munn Lake kimberlite yielded two macros and 12 micro-diamonds. Over 2,500 samples revealed at least five distinct kimberlite indicator mineral (KIM) trains lining the property.

Zimtu now has a crew sampling KIMs to validate historic sampling and “provide additional insight into the diamondiferous potential of each area.”

Earlier this month Arctic Star Exploration TSXV:ADD announced plans to explore its 54,000-hectare T-Rex property in Lac de Gras. Historic work found over a dozen kimberlites, most of them diamondiferous, the company stated. Historic, non-43-101 results of a 436-kilo bulk sample from the Jack Pine kimberlite reported 572 micro-diamonds.

Another 299 micro-diamonds turned up in 360 kilos of Jack Pine kimberlite drilled in 2005, according to 43-101-compliant results.

Last June Arctic Star reported an update from North Arrow Minerals TSXV:NAR on Redemption, their Lac de Gras joint venture. Initial interpretation of ground geophysics indicates a number of targets for a potential 2016 winter drill program, Arctic Star stated. Its partner also has the property’s surficial geology under analysis to better define and interpret the region’s South Coppermine KIM train.

With about 97,220 hectares of Lac de Gras turf, Canterra Minerals TSXV:CTM said in June it’s identified several areas “that warrant further detailed exploration, including drilling,” along with other areas that could undergo till sampling and geophysics.

Last month Margaret Lake Diamonds TSXV:DIA announced an agreement, subject to TSXV approval, to acquire the remaining 40% interest in the Margaret Lake property, giving the company sole ownership. The company anticipates a winter drill program to test targets identified by last year’s airborne gravity survey. The 19,716-hectare property lies contiguous to the north and west of Kennady Diamonds’ (TSXV:KDI) Kennady North project, the region’s most advanced project other than the Gahcho Kué mine-to-be, which Kennady surrounds on three sides.

With four kimberlites under assessment at the 61,000-hectare property, Kennady reported results of a 443-tonne bulk sample from the Kelvin pipe on August 26. Of 16,247 diamonds recovered from four zones of Kelvin’s “more diluted” southeast lobe, 35 weighed over one carat. The zones averaged 2.02 carats per tonne for diamonds larger than 0.85 millimetres.

The lab described the five largest as follows:

  • 4.22-carat white/colourless, transparent macle with no inclusions

  • 3.95-carat brown, transparent aggregate with inclusions

  • 2.79-carat light brown, transparent aggregate with minor inclusions

  • 2.63-carat white/colourless, transparent octahedral with inclusions

  • 2.59-carat white/colourless, transparent dodecahedron with no inclusions

The project’s winter agenda calls for another bulk sample from Kelvin’s north lobe, where a 19-tonne mini-bulk sample last year averaged 2.59 carats per tonne. Kennady has Kelvin slated for a maiden resource by year-end. The company also has exploration drilling underway at the project’s MZ kimberlite and further infill drilling planned for the Faraday 1 and 2 pipes.

Kennady closed a $4-million private placement earlier this month.

 

In operation or under development: Canada’s diamond mines

Canada’s in the forefront of countries trying to make up the diamond supply shortfall, with new mines coming online as others face depletion. Besides the NWT’s three operations and De Beers’ Victor mine in Ontario, two others are in development.

Of the three Lac de Gras mines, Dominion Diamond’s (TSX:DDC) majority-held Ekati has about five years left to its life expectancy, although development of the Jay deposit could potentially add another 11 years.

Diavik, a Rio Tinto NYE:RIO/Dominion 60/40 JV, would last to 2023 with the addition of a fourth pipe.

De Beers’ Snap Lake could last to 2028, although with declining output. In March the global giant said an amended water licence might be necessary to avert a much earlier shutdown. In June the Mackenzie Valley Land and Water Board recommended the NWT government approve the application.

Ontario’s only diamond mine, De Beers’ Victor, faces depletion in 2018. The company hopes to postpone its doom by developing the Tango kimberlite, a smaller, lower-grade deposit seven kilometres northwest.

World diamond production drops but Canadians compete to make up the shortfall

On schedule for H2 2016 production, Gahcho Kué would
become “the world’s largest and richest new diamond mine,”
according to Mountain Province.

Now building Quebec’s first diamond mine, Stornoway Diamond TSX:SWY has operations scheduled to begin at Renard late next year and commercial production slated for Q2 2017. Although potential resource expansion continues, the company estimates Renard would supply 1.6 million carats annually for 11 years, providing about 2% of global supply.

A fourth Lac de Gras operation, destined to become “the world’s largest and richest new diamond mine,” remains on track for H2 2016 production. Mountain Province Diamonds TSX:MPV and joint venture partner De Beers expect Gahcho Kué to produce an annual average 4.5 million carats over a dozen years.

In Saskatchewan’s Fort à la Corne region, Shore Gold’s (TSX:SGF) majority-held Star-Orion South underwent a spring drill program to update the Orion South kimberlite’s resource. Although the project reached feasibility in 2011 and passed a federal environmental review in December, Shore now plans a revised feasibility to reduce capex.

In addition to regions around existing and future mines, Nunavut and Saskatchewan’s Pikoo region also draw significant diamond exploration.

Disclaimer: Zimtu Capital Corp is a client of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in Zimtu Capital.

NWT retains third place for global diamond production, De Beers optimistic about 2015

August 27th, 2015

by Greg Klein | August 27, 2015

Although Russia pushed Botswana into second place, Canada remains third for global rough diamond production by value. Those are among 2014 findings released on August 25 by the Kimberley Process Certification Scheme. But, as the NWT and Nunavut Chamber of Mines was quick to point out, Canada owes its position to the Northwest Territories, where three Lac de Gras-region mines produce about 95% of the national total.

NWT retains third place for global diamond production, De Beers optimistic about 2015

Third-place Canada garnered 14% of the nearly
$15-billion world diamond production by value last year.
(Chart: Kimberley Process Certification Scheme)

Russia produced 25.75% of the world’s total rough by value, barely easing out Botswana’s 25.16%. Canada’s share came to 13.82%, ahead of Angola with 9.09% and South Africa with 8.45%. The top three producers’ revenue came to $3.73 billion for Russia, $3.64 billion for Botswana and $2 billion for Canada.

The global total came to $14.495 billion. A nearly 4% global increase in value coincided with a nearly 4% fall in volume.

At 12 million carats, Canada’s output increased more than 13% over the previous year, moving from fifth to fourth place globally by volume. Canadian diamonds brought an average $166.78 per carat, well above the world average of $116.17 but a nearly 7% drop from Canada’s 2013 performance. Nevertheless, the $2 billion paid for Canadian diamonds represents a 5% hike over 2013.

World average prices, meanwhile, rose almost 8% from $107.66 per carat according to the Kimberley Process.

Looking at diamond jewelry, De Beers estimated global sales rose 3% last year to $81 billion, Rapaport News reported. De Beer’s own rough sales for H1 2015, however, dropped 21% to $2.7 billion.

On August 26 Rapaport quoted De Beers’ head of global sightholder sales Paul Rowley expressing cautious optimism for the rest of the year. “One can’t ignore what’s happened on the financial markets in the past few days and weeks but we also see our product doing quite well in these times. We see diamonds in general bucking the trend a little. As much as consumer demand won’t meet our expectations from the beginning of the year, we still feel that it will be around flat on last year—which wasn’t a bad year.”

August 27th, 2015

Seven reasons why the market has gone totally nuts NAI 500
Haywood’s Mick Carew explains why now is an “opportune time for consolidation” in the mining space Streetwise Reports
China probing brokers, two employees of securities regulator for possible stock market offences Stockhouse
Keep your house warm with “volcanic popcorn” Geology for Investors
Will Tesla’s Powerwall succeed in Europe? Equities Canada
Chinese soda ash: Mission creep Industrial Minerals
China not immune to contagious quantitative easing and massive printing of cheap money GoldSeek

Investment equals capex

August 26th, 2015

Private equity backs Western Potash’s upwardly scalable Saskatchewan project

by Greg Klein

A new Saskatchewan potash mine should have funding in place by about September 16, assuming exchange approval and lack of an even better offer, according to Western Potash TSX:WPX. On August 24 investors approved an $80-million deal that would transfer a 51% stake in their company to Beijing Tairui Innovation Capital Management, a Chinese private equity firm. The announcement follows last month’s revised preliminary economic assessment projecting an $80.6-million capex for Western’s Milestone project. Significantly downsized from its 2012 feasibility study but believed to have considerable expansion potential, the project could begin operation in about 24 months.

Tairui’s buy-in would come through the purchase of 238.26 million shares at $0.3358 for a total of $80 million. Western shareholders also approved the $720,245 purchase of another 2.14 million shares at $0.3358 by CBC (Canada) Holding Corp, leaving it with a 10.1% stake. CBC already has an offtake agreement for the lesser of 30% or one million tonnes of potash annually for 20 years.

Private equity backs Western Potash’s upwardly scalable Saskatchewan project

Assuming a potash price of $315 per tonne FOB Vancouver and using a 10% discount rate, the new PEA projected a net present value of $56.7 million and a 25.2% internal rate of return after taxes and royalty.

The mine life now comes to 12 years, a considerable drop from the 40 years calculated in a 2012 feasibility study. But that project called for capital expenditures of $2.44 billion and assumed Uralkali/Belaruskali cartel prices around $450 a tonne. Western now attributes much of the solution mine’s reduced capex to a new approach using directional drilling to extract the deposit selectively, eliminating the need for salt tailings.

Forecast to produce 145,600 tonnes of standard grade muriate of potash per year, the new plan’s smaller but scalable, emphasizes president/CEO Pat Varas. Should additional offtake offers come in the project could expand very considerably “utilizing the same methodology,” Varas says. “This is a first step. It’s a stepping stone. And it’s a good thing for us to do in these markets. By going into a smaller operation, a pilot project, Milestone becomes a much bigger attraction for investment.”

Eminently enviable is southern Saskatchewan’s infrastructure, Varas points out. “You can see multiple sets of power lines” from the 35,420-hectare property. “There’s roads every quarter-section. There’s major highways and two railway lines. The things you’d look for to develop a project anywhere in the world are right here.” The company also has an agreement with the city of Regina, 30 kilometres away, to supply the solution mine with treated waste water. All major permits are in place.

Once financing closes, Western estimates, development would take about two years. Varas doesn’t anticipate a feasibility study, although plans call for some further engineering. “It’s not a complicated engineering exercise,” he maintains. “It’s more about execution and keeping within budget and timelines. The way things are going in the commodities sector, I think it’s a good time because there are more people available with skills.”

Western’s in-house expertise includes project director Richard Lock, a De Beers veteran who joined Rio Tinto NYE:RIO to take the Northwest Territories’ Diavik diamond mine into production. Lock also completed an Alberta oilsands project for Canadian Natural Resources and served as project director on Resolution, an Arizona engineering wonder that could become North America’s largest copper mine.

Of course Tairui’s buy-in would dilute ownership. But Varas points to the opportunity. “We can do nothing and eventually run out of money and watch ourselves die like many other companies,” he argues. “Or we can move the project forward. This is the market we have.”

We haven’t closed, so anybody could still come in and make an alternate proposal. But I also like the prospect of what these fellows want to do.—Pat Varas, president/CEO
of Western Potash

“I don’t see any other deals out there, although one could come soon. We haven’t closed, so anybody could still come in and make an alternate proposal. But I also like the prospect of what these fellows want to do. They’re market people, not miners or fertilizer people. They look at the markets, see an opportunity and invest. And I think their vision is to take this company and dual-list it in Hong Kong. I think that could offer a tremendous amount of potential to boost value for our shareholders.”

He says other parties showed interest prior to last month’s Tairui agreement, which was signed within days of the revised PEA’s release. Not to be ruled out is the possibility of an alternative transaction or additional offtake without an ownership position. “Until the money’s in the bank, obviously, we don’t know what’s possible out there.”

As for the commodity, Varas sees continued opportunity. “I think there’s always going to be demand for potash,” he says. “The markets are very well controlled by the parties that are out there. But I think the world needs projects that can produce at low cost and I believe we can do that. What we envision as our cost to produce potash will be very competitive.”

Read more about Western Potash’s revised PEA.

Disclaimer: Western Potash Corp is a client of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in Western Potash.

Canadian Nuclear Safety Commission president Michael Binder pans Quebec’s “misleading” uranium review

August 26th, 2015

…Read more

August 26th, 2015

Haywood’s Mick Carew explains why now is an “opportune time for consolidation” in the mining space Streetwise Reports
China probing brokers, two employees of securities regulator for possible stock market offences Stockhouse
Keep your house warm with “volcanic popcorn” Geology for Investors
Will Tesla’s Powerwall succeed in Europe? Equities Canada
Chinese soda ash: Mission creep Industrial Minerals
China devaluation sparks gold buying everywhere—except China NAI 500
China not immune to contagious quantitative easing and massive printing of cheap money GoldSeek