Tuesday 25th October 2016

Resource Clips

High-grade glitter

Dunnedin Ventures surpasses historic results at its Nunavut diamonds project


Just the first bulk sample released by Dunnedin Ventures TSXV:DVI, it shows “some of the best diamond results reported in Canada,” declared CEO Chris Taylor. The November 12 announcement distinguished the Kahuna project in Nunavut as “having kimberlites with both high grades and large diamonds.” That would seem especially auspicious following the company’s first field season. But this is a project with a history, in a region that saw roughly $25 million of past exploration. And it’s getting some help from the dean of Canadian diamond exploration, Chuck Fipke.

“This is not grassroots,” Taylor emphasizes. “We know the diamonds are there. We just have to add to those we’ve found.”

Dunnedin Ventures surpasses historic results at its Nunavut diamonds project

Dunnedin CEO Chris Taylor ventures
into the Notch kimberlite last summer.

Dunnedin signed a four-year, 100% option on the property in November last year “after a lot of tire-kicking,” Taylor says. A former Imperial Metals TSX:III geologist who moved into the juniors about six years ago, he was attracted to diamonds as “the only real bright spot I could see in resources over the last couple of years.”

There was a family connection too. His Flemish great-grandfather imported diamonds into Belgium, where he had “about 100 guys cutting stones for him.” Taylor has family business heirlooms decorating his office, some from his grandfather, who worked with gems in this country.

A “contact of a contact” knew people at De Beers, where a geologist pointed Dunnedin to Kahuna.

The project, about 25 kilometres from the hamlet of Rankin Inlet on Hudson Bay’s northwestern shore, had previously been part of a regional program that included radar, airborne magnetics and electromagnetics, and ground-based EM surveys. Over 10,000 till samples revealed approximately 20,000 indicator minerals.

But the Kahuna claims lapsed after the last operators left, Stornoway Diamond TSX:SWY to focus on Renard and Shear Diamonds to tackle the ill-fated Jericho project, Taylor says. Vendors re-staked the claims and signed the option with Dunnedin late last year.

Besides finding kimberlite pipes, past explorers “found this series of kimberlite dykes, which is what our project is based around, and realized these were the sources of the indicator minerals. When they popped holes in them, they realized they had good diamond grades,” relates Taylor.

“When we looked at the bulk sample data, there seemed to be enough work done to do an initial resource, which is what we ended up publishing earlier this year.”

Announced in January, the inferred resource for the Kahuna and Notch dykes, 12 kilometres apart, provided figures for two sieve sizes over 0.85 millimetres, considered commercial sizes.

  • Kahuna (+0.85 mm cutoff): 3.06 million tonnes averaging 1.04 carats per tonne for 3.19 million carats
  • (+1.18 mm cutoff): 0.8 ct/t for 2.45 million carats

  • Notch (+0.85 mm cutoff): 921,000 tonnes averaging 0.9 ct/t for 829,000 carats
  • (+1.18 mm cutoff): 0.83 ct/t for 765,000 carats

  • Total (+0.85 mm cutoff): 3.99 million tonnes averaging 1.01 ct/t for 4.02 million carats
  • (+1.18 mm cutoff): 0.81 ct/t for 3.22 million carats

The two kimberlites are exposed at surface and remain open along strike and at depth. The project holds six other diamondiferous kimberlites, four of them between Notch and the PST dyke, location of the November 12 results.

PST’s 820-kilogram sample gave up 526 diamonds, 96 of them above 0.85 millimetres and totalling 5.34 carats. The sample grade hit 6.5 carats per tonne, nearly tripling the historic 2.18 carats per tonne. And for that, Dunnedin thanks Chuck Fipke.

“He’s an old school friend of one of our directors, Pat McAndless, and the first person I went to when we started on diamonds,” Taylor says. “Chuck’s a very open, genuine guy. He showed me some of the methods they used to make the discovery at Ekati, the characteristics of diamond deposits. It provided guidance for me to find a project that our company could work with.” An adviser to the company since July, Fipke’s “guiding us on the ongoing sample processing and exploration methods, and we’re using his lab.”

Fipke’s CF Mineral Research has developed unique methods of diamond recovery, Taylor says, accounting for dramatic improvement. Also, Fipke “can recover all the indicator minerals at the same time, which is a helluva bonus. Usually, if you do caustic fusion, which is how most companies get their diamonds out of the rocks, you destroy all the minerals that came up in that kimberlite. But we can use them to hone in on our exploration.”

Chad Ulansky, Fipke’s “right-hand man in diamond exploration,” accompanied Dunnedin’s first field season last summer. The company has its own expertise too in McAndless, recently retired as VP of exploration for Imperial Metals, and his near-namesake Tom McCandless, Dunnedin’s technical adviser. With diamond experience in Africa, Europe and the Americas, McCandless took part in the discovery and assessment of Stornoway’s Renard kimberlites and in earlier work at the Kahuna project.

Still to come are sample results for over three tonnes taken from the Notch and Kahuna dykes as well as other targets. Another 180 concentrated till samples from last summer also remain to be processed, which Taylor hopes will point to additional targets.

There’s a real efficiency in getting those diamonds because of the high grade and the location near town. It’s not going to cost us anything near what it costs other companies to do bulk samples.—Chris Taylor,
CEO of Dunnedin Ventures

But the big question remains: What are the diamonds worth? For that, Taylor would have to send a 1,000-carat package to his family’s former city of Antwerp for evaluation. The resource estimate noted a 2008 description of Kahuna diamonds “as having encouraging value characteristics, with a high abundance of colourless and near-colourless varieties with octahedral shapes being the dominant morphology.”

The PST sample reported November 12 included “an octahedral crystal weighing 0.77 carats and a polycrystalline diamond weighing 2.22 carats. A preliminary examination of the diamonds suggests approximately 50% to 60% are clear and colourless.”

In his previous work McCandless reassembled a 13.42-carat Kahuna diamond that “blew up in a jaw crusher,” Taylor says, leaving fragments as big as 5.43 carats.

Aiding the economics of the 13,000-hectare project is Meliadine, where Agnico Eagle TSX:AEM has underground development underway. An all-weather road linking the site to Rankin Inlet covers about half the 25 kilometres from the hamlet to Kahuna.

“There’s a real efficiency in getting those diamonds because of the high grade and the location near town,” Taylor maintains. “It’s not going to cost us anything near what it costs other companies to do bulk samples.”

Dunnedin has just closed a $158,000 first tranche of a $1.1-million private placement offered in August. Fipke stated his intention to participate.

The company has also held its first consultations with the Kivalliq Inuit Association. “It’s really nice to work with a community that’s knowledgeable,” Taylor says, pointing out that Rankin Inlet began as a nickel mining town and now has Meliadine 25 kilometres away. “They know how to work with mining companies, what the KIA can bring to the table and what the company can bring to the table.”

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