Thursday 21st September 2017

Resource Clips


Finland’s Arctic welcome

Arctic Star finds the Scandinavian north an hospitable place for diamond exploration

by Isabel Belger

Isabel Belger

Isabel Belger

Isabel: I would like to introduce the CEO and president of Arctic Star Exploration TSXV:ADD, Patrick Power. Hi Patrick, it is a pleasure to talk to you again.

To give the readers a chance to get to know you a bit, would you be so kind as to tell more about your background and your experiences in the mineral exploration business?

Patrick: I started in the business as a floor trader in 1984. I did that until 1990. In that period I met someone who became soon very prolific in the diamond world, Chuck Fipke. He found the Ekati mine, the first diamond mine in Canada and he got my interest up in diamonds and the exploration for diamonds. When I finished with the floor in 1990, I joined up with a company called Kelco Resources and I became a director there. That is how I got involved with the diamond world in Canada. Subsequent to that, I worked with a company called Montello Resources, and became the president and CEO. We did a lot of diamond exploration with that company from 1993 to 2000, primarily in Alberta.

We found the Legend field in Alberta with our venture partner Canaccord Canada, which is a Rio Tinto company. We didn’t have the numbers in the pipes that we wanted to. So my partner Tom Yingling and I started our own company called Arctic Star Exploration. We started with a diamond project in Manitoba with Rio Tinto. It kicked off with that project. We never did intersect in kimberlites. Shortly after that, we managed to encourage Buddy Doyle to leave Rio Tinto and he joined us on the Arctic Star board. That happened in 1996. Buddy Doyle brought over a project with him that we called Credit Lake. We spent about $25 million on Credit Lake over a period of seven to 10 years I believe. It was a long time. It just ended recently.

Isabel: Interesting! That tells already a bit of the history of Arctic Star itself. Congratulations on the news on a new member of the board and your new project in Finland. What made the connection to Finland?

Arctic Star finds the Scandinavian north an hospitable place for diamond exploration

Patrick: Thank you, we are very excited and happy about both. It was about 2006 when Buddy Doyle looked at this project we just took into the company. We made an offer for a percentage of it. But they wanted €12.5 million for 25% of it, which we didn’t have the ability to do back then. Then 2008 came and everything became really difficult for all resource companies, specifically for diamond companies. It became very, very difficult.

Roy Spencer, who you could call the father of the Cinnamon project, found the Grip pipe, 450 kilometres east in Russia as the president of Arctic Angel in 1996. That turned out to be a mine, which started producing about two years ago. But as usual in Russia, he got kicked out before it became productive. He traced chemistry trails to the Finnish border and all those trails originated in Finland somewhere.

Isabel: What makes you so excited about this project?

Patrick: No exploration was done there in historical terms. You cannot tell the quality of the diamonds from the chemistry, but usually you can tell the amount of diamonds. All that chemistry was flooding in over 80 kilometres with no answers as to the sources. In 2007, Roy drilled first in this new field. The important part of this is that fields usually have a minimum of 30 and a high of 300 pipes. The upside potential is that it is the first pipe in a new field and that is extremely important because it has good chemistry. It is a great jurisdiction, Finland. A couple of years ago, the Fraser Institute made Finland the number one mining jurisdiction in the world. Mining and exploration friendly!

Infrastructure-wise, the Black and White Wolf, which were the two first pipes discovered—they might actually be one, because they are only 48 metres apart, we will know more about this after further geophysics being done—are only two miles away from a bus stop. Compared to Canada this is amazing infrastructure and that translates right into that you would need far less grade to become a mine. You can have a lot less compared to the north of Canada in order to be still productive. That is a big point! Also it is a very stable country since it is rated a great jurisdiction to be in. We have got Roy on the board now, the man who found this particular discovery when he was with a different company. Another interesting fact: Roy was Buddy Doyle’s first boss at Rio Tinto. They were in the outback of Australia together for two years looking for diamonds. That was more than 30 years ago. And now they are reunited. So the team is back together again. This is one of the prime reasons we got this project because of this relationship between Buddy and Roy; Roy wanted Buddy to lead the project.

Isabel: What is the plan of the re-united team now?

The project offers everything if you are looking for diamonds. Great jurisdiction, great infrastructure, it is a new field, and it has got history in the same craton with productive mines in Russia.—Patrick Power

Patrick: We are going to get out there. We will go back to the Black and the White Wolf, the two pipes that he found in 2006/2007. We will do some geophysics on top of it that wasn’t done 10 years ago. We want to see if they join, get bigger, have multiple phases, do some more drilling, etc. With those two pipes, or maybe it is one, we can potentially make a mine. So there is work to do on the first two pipes of a new field. We expect to find a lot more pipes and that is exciting because the chemistry going into them is dynamic. The project offers everything if you are looking for diamonds. Great jurisdiction, great infrastructure, it is a new field, and it has got history in the same craton with productive mines in Russia.

Isabel: Let me interrupt you for a moment. Could you explain what a craton is?

Patrick: Sure. A craton is a thick, old chunk of continental plate where diamonds form. Kimberlite pipes are created when magma bubbles up through a craton, expanding and cooling on its way up.

I am really glad that we have got all that exceptional expertise within Arctic Star…. Roy was part of the team that found Orapa, the second-largest producing mine in the world that is in Botswana. So we have got lots of positive diamond experience with the two guys, plus they work together and like each other. Their records speak for themselves. They are probably the two most awesome diamond guys with that combined experience and mine-finding ability. They are pretty amazing. We’ve got the best people in the world.

Isabel: Yes, it sounds like it! So the next step is to do more work on your new project. Will you drill, and how deep will you have to drill?

Patrick: The two pipes are very close to the surface, so it is not that deep at all. We have two phases of two programs here. The first program will be carried out on Black and White Wolf, the two existing kimberlites. We will do geophysics on the ground, to determine whether they get larger, whether they come together and whether they have multiple phases. We will also put more drill holes into it to get more samples to get a better diamond count. Buddy thinks we need about 1,000 kilograms before he can make a judgement if we go ahead with it or if we drop it, so we only have a very small amount of material so far. We will take a lot more tonnage out of these drill holes.

Arctic Star finds the Scandinavian north an hospitable place for diamond exploration

Arctic Star VP of exploration Buddy Doyle collecting
float samples at the Timantti project in Finland.

And then out of a bigger concept, we have 250 hectares of mineral claim permitted; 140,000 square kilometres around it. So on that bigger puzzle we could encompass the entire field. We are going to fly EM and mag first and then we want to fly a gravity survey, which is quite expensive. It costs probably about three to four million dollars to get the gravity survey done, but it will be a tool that will be very useful. It has not been used that much in the diamond world; it is only a few years old. Gravity is a very difficult thing to produce on the ground. There are a lot of factors involved with that. This new tool that was developed by the U.S. military was re-developed into a commercial application by BHP and has been on the market for just a few years. Very expensive!

So that is what we plan to do on the big package, not just the claims we acquired, but the much bigger exploration permits that we are in the process of acquiring from the government. We think that this would give us the entire field picture. We will be able to prospect for the pipes in that field. That will be a big thing! We think there are a lot of pipes in this area. If the chemistry is good, it is suggested to have a lot of diamonds. But I repeat to state that it doesn’t tell you the quality of diamonds, but the quantity of diamonds.

Isabel: What is the time frame for that? This is not going to happen this year, is it?

Patrick: The only thing that is restricting us up there is the darkness. The latitude is pretty high, but it is not as cold as in northern Canada. So there is no temperature issue and again the infrastructure is great. It is just within the dark months that we can’t really do much.

Isabel: What is going on at your Cap property in northeast B.C.?

Patrick: In 2008 we diversified a bit from diamonds. We picked up a project from Zimtu [TSXV:ZC]. It is Jody Dahrouge [of Dahrouge Geological Consulting] who has been doing all the work on it for us. We spent only about $1 million developing a really nice niobium and rare earth target. It is probably in carbonatite; we are drill-testing as we speak. It has really good niobium numbers on surface and it is prospective. We decided with a million dollars into it, we need to drill it right now and we are crossing our fingers. It could be something really interesting. If we are successful, we are probably going to spin it out into a new company. We don’t want to mix niobium and diamonds. It will benefit the shareholders with a new share in a new company and we will staff it with people that know a lot about niobium.

Isabel: That sounds like a good plan! How much money do you have in the bank?

Patrick: We are planning to finance soon.

Isabel: How much of Arctic Star is held by the management?

Patrick: That sums up to be 25% by now.

Isabel: What do you like about the mineral exploration business?

Patrick: It is a difficult business, but it can be explosive on the upside. That is the thrill I like about it, which makes the difficult part worthwhile.

Isabel: What is your favourite commodity and why?

Patrick: Definitely diamonds! The reason for that is because it is so hard to find an economic deposit. It is very challenging.

Isabel: Good luck with the ongoing drilling in B.C. and with the new project in Finland. Thank you so much for your time and your insights. It is always a pleasure to talk to you.

Patrick: Thanks for having me, Isabel.

Patrick Power

Patrick Power, president/CEO
of Arctic Star Exploration

Bio

Patrick Power is a seasoned venture capitalist and financier with over 20 years of experience as a stock market professional and as director of public companies. He has been president and CEO of Arctic Star since its inception in 2002. Additionally, Mr. Power serves as a director of other mineral exploration companies. Arctic Star benefits from Mr. Power’s wealth of experience as a shrewd dealmaker, an adept financier and a tireless, results-driven leader of dynamic public companies. The company enjoys Mr. Power’s large network of contacts within the industry, his enthusiasm and his efforts as a member of the audit and remuneration panels.

Fun facts

My hobbies: Travelling and horse racing

Sources of news I use: Internet

My favourite airport: London Heathrow

My favourite tradeshow: PDAC in Toronto

My favourite commodity: Diamonds

With this person, I would like to have dinner: My wife

If I could have a superpower, it would be: Power for peace

Read more about Arctic Star Exploration here and here.


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