Presented by Equitas Resources TSXV:EQT | Posted with permission of Visual Capitalist | October 28, 2015
The legendary story of one of Canada’s most significant base metal discoveries happened just before the dawn of the internet era. While some investors recall the sequence of events and the value that was created by Diamond Fields Resources, there are many investors today, both new and old, who are not familiar with the story of Voisey’s Bay.
For this infographic we have turned to Jacquie McNish’s fabulous book The Big Score, which documents the history of the discovery, biographical elements of Robert Friedland’s life, and the ensuing bidding war between Inco and Falconbridge that led to one of the most spectacular takeovers in mining history. If you like these infographics, then look into buying Jacquie’s book. It’s gripping and full of information.
Part 2 on the ensuing bidding war for Voisey’s Bay will be released on October 29. Part 3 will be released in the following week or two.
By its very definition, a discovery is the breakthrough action of finding something of value that no one knew existed. Discoveries come in all shapes and sizes—but it turns out many of the very best discoveries happen in the most unsuspected conditions.
Labrador is bigger than Great Britain and has over 8,000 kilometres of coastline, yet a population of just 26,700. Caribou outnumber people by a ratio of 13:1.
In 1985, geologists of the Newfoundland Department of Mines and Energy conducted a survey of one of the most remote parts of Labrador. Voisey’s Bay is 35 kilometres from Nain, a town of 1,000 people.
The team, in a helicopter-supported survey, tested samples in the area, but were not encouraged by the low metal content of the weathered rocks exposed at surface. They left and didn’t look back.
In early 1993, Michael McMurrough of a fledgling company called Diamond Fields Resources was looking for untapped diamond properties to add to the company’s property portfolio. He had heard that a place called Labrador had ancient Archean rock formations—one of the earth’s oldest rock groups—which can hold diamonds in kimberlite pipes. While Labrador’s wealth in iron ore is well documented, no diamonds have ever been discovered in the region.
Diamond Fields geologist Rod Baker was sent to Newfoundland in April 1993 but found that the best diamond prospects had just been staked by two Newfoundlanders. Al Chislett and Chris Verbiski, and their prospecting outfit named Archean Resources, eventually convinced Diamond Fields to pay $372,000 in annual instalments over four years to acquire their claims. Diamond Fields also agreed to pay $500,000 to start an exploration program.
The two prospectors sampled throughout the summer of 1993 without much luck, but they did chip some samples of chalcopyrite, a copper-bearing mineral, from an outcrop. The samples came back with 2% copper, and they pushed for Diamond Fields to put more money into the exploration program.
At this time, Diamond Fields was a fledgling company. Running under Robert Friedland’s umbrella of Ivanhoe Capital, the company had its share of issues. Legal problems were mounting and the company had finally just raised cash in a desperate move: the company impressed investors with its idea of “vacuuming” diamonds off the seafloor near Namibia.
It was company geologist Richard Garnett who convinced the board of Diamond Fields to pursue the Labrador findings, which he had been tracking. The company eventually allocated $220,000 to Labrador—or 40% of what Chislett and Verbiski recommended for follow-up spending.
In August 1994, the prospectors received more detailed assays from the samples they collected—assays that confirmed a multi-element deposit with cobaltite, copper, magnetite and exceptionally high amounts of nickel. In fall, the team tried to beat winter by executing the next phase of exploration.
They hit on drill hole number two. The core was yellow—not from gold, but from high-grade massive sulphides. The hole was 33 metres long and signified that Diamond Fields was finally onto something.
At this point, Robert Friedland reigned in control of the company with one mission: to auction off the discovery for the highest price.
Part 2: The auction to be released October 29.
Posted with permission of Visual Capitalist.