by Greg Klein | December 7, 2016
An additional 66,047 hectares brings Dunnedin Ventures’ (TSXV:DVI) Kahuna property to around 1,200 square kilometres, the company announced December 7. Acquired by staking, the ground now holds over 100 interpreted kimberlite targets, half of them already under scrutiny for diamond indicator minerals from till sampling. Drilling has confirmed 10 diamond-bearing dykes.
Till sampling has found anomalous gold in five metasedimentary belts, while drilling has found gold in an extension of the Aqpik and Aklak gold showings on Agnico Eagle Mines’ (TSX:AEM) adjacent, advanced-stage Meliadine project, Dunnedin stated. An all-season road links Meliadine with the Hudson Bay hamlet of Rankin Inlet.
Last month Dunnedin announced plans to spin out its non-diamond assets to a new company.
Kahuna has a 2015 inferred resource for near-surface deposits on the Notch and Kahuna dykes, 12 kilometres apart:
Both kimberlites remain open along strike and at depth.
Since then, an 820-kilogram sample from the property’s PST dyke revealed 526 diamonds. Ninety-six surpassed the commercial size of 0.85 millimetres, totalling 5.34 carats. A 2.32-tonne sample from Notch showed 85 commercial-sized stones totalling 1.95 carats.
While processing material from 1,100 till samples collected last summer, Dunnedin anticipates a 2017 program of drilling to test potential extensions of the resources, compile a 1,000-carat parcel for evaluation in Antwerp and try new targets identified by indicator minerals.
by Greg Klein | December 2, 2016
India’s sudden ban on 500- and 1,000-rupee notes early last month has suspended at least some operations in the northwestern city of Surat, the world capital of diamond cutting and polishing. Various sources credit the city with transforming approximately 80% of the globe’s rough into jewelry. India is also the world’s third-largest consumer of diamond-ensconced bling.
NDTV reports businesses closing as the lack of cash prevents them from buying rough and paying employees. The government ordered citizens to deposit the notes, worth about $9.77 and $19.54 Canadian, and conduct transactions electronically.
Governments that have limited the use of cash have cited the need to combat terrorism, money laundering, corruption, counterfeiting, tax evasion and the underground economy. Rapaport News stated India’s underground economy constituted 23.2% of GDP, according to 2007 data in the latest World Bank survey.
Only about 30% of Surat’s diamond cutters have bank accounts, NDTV added.
“This industry has been working on an illegal mode of payment in cash until now and to shift to a cashless system will take at least four to six months,” one business owner told the news outlet. But he stated the government decree will eventually benefit merchants and workers. Another source said he expects the suspension to last at least one and a half months.
The two denominations reportedly accounted for 85% or 86% of Indian money in circulation. “The liquidity freeze could influence a global slowdown in demand for lower colour and clarity polished, and in very small melee stones,” Rapaport stated.
Following the first tender of Quebec diamonds in Antwerp last month, Stornoway Diamond TSX:SWY president/CEO Matt Manson attributed India’s demonetization to reduced prices and demand for smaller and lower-quality stones. He said some were removed from the event, to be sold later.
India’s government plans to issue new denominations of 500 and 2,000 rupees. But, NDTV reported December 2, an enormous hoard of contraband seized from a group of low-paid government employees included 57 million rupees (in Canuck terms, over $1.11 million) in so-far uncirculated 2,000-rupee notes.
by Greg Klein | November 25, 2016
Having poured about $23 million into Nunavut so far, Peregrine Diamonds TSX:PGD plans to spend another $15.5 million to $17 million next year on its Chidliak project, the Nunatsiaq News reported November 25. Most of the $23 million went to Iqaluit, home to an estimated 7,590 people. “It will cost between $50 and $75 million to go from here to where we need to get to,” the journal quoted president/CEO Tom Peregoodoff.
The Baffin Island project reached PEA in July, calling for a capex of $434.9 million, an amount relatively modest for an isolated operation but considerable for a territory of about 37,082 people. The company hopes to reach feasibility by H2 2019, complete permitting by the end of that year and begin construction in H2 2019. Should hopes, financing and feasibility fall into place, Peregrine might be digging diamonds by 2021.
Brothers Robert and Eric Friedland own about 25% and 21% of the company respectively.
New infrastructure would include an all-season road to Iqaluit, about 120 kilometres southwest. The government of Nunavut hopes to have an $85-million deep sea port built there by 2020.
The territory currently has two other mines in production, Agnico Eagle’s (TSX:AEM) Meadowbank gold mine about 300 kilometres west of Hudson Bay and Baffinland Iron Mines’ Mary River iron ore operation roughly 800 kilometres north of Chidliak. Baffinland trucks ore to its own port, 100 kilometres north of the mine.
Peregoodoff said the company has yet to negotiate an Inuit Impact and Benefits Agreement, but stated such a deal would probably resemble agreements signed with Northwest Territories diamond producers, the News added.
In October the paper reported Nunavut’s 14,000-member Qikiqtani Inuit Association received more than $24 million over two years from Mary River.
Should Peregrine meet its goal, Chidliak wouldn’t be Nunavut’s first diamond operation. Just across the border from the NWT’s Lac de Gras camp, Nunavut’s Jericho mine produced gems between 2006 and 2008. Shear Minerals gave up on its restart attempt in 2012, leaving taxpayers with a large part of an estimated $10.5-million clean-up bill.
Yet diamond mining transformed the NWT economy. According to figures supplied by the NWT and Nunavut Chamber of Mines, between 1996 and 2015 the industry provided over 50,000 person-years of employment, 49% northern and 24% aboriginal. By far the territory’s largest private sector industry, diamond mining created 29% of the NWT’s GDP in 2014. Direct and indirect benefits bring the number up to 40%, according to chamber data.
by Greg Klein | November 23, 2016
Diamantaires in Antwerp got their first look at Quebecois gems over the last nine days, spending $10.2 million on 38,913 carats from Stornoway Diamond’s (TSX:SWY) Renard mine. The average price came to US$195 per carat.
“Pricing met or was close to our expectations on most items,” president/CEO Matt Manson said. “Recent events in India surrounding demonetization have impacted pricing and demand for certain smaller and lower-quality items and, as a result, a quantity of these were withdrawn from the sale. These will be sold at a later date. Because of this, and because of a higher than expected proportion of small diamonds recovered during the ramp-up period, the result of this first sale cannot be taken as representative of the longer-term pricing profile of the project.”
The sale took place two months earlier than anticipated. Three more sales have been scheduled for Q1 2017.
Having begun ore processing in July, Renard has already surpassed the fiscal year’s guidance of 220,000 carats at an average grade of 97 carats per hundred tonnes. As of November 15 the mine gave up 261,353 carats, averaging 107 cpht. Stornoway credited “a better than expected mix of ore available within the open pit for processing.”
The company expects to reach commercial production, 60% of capacity, by year-end. Stornoway estimates average production will reach 1.8 million carats annually for the mine’s first 10 years, selling at an average $155 per carat in March 2016 terms.
Renard has a 14-year life expectancy.
About 100 kilometres south, Stornoway holds the Adamantin exploration project, where 11 kimberlites drilled so far failed to reveal diamonds.
by Greg Klein | November 23, 2016
With a gold-copper asset in British Columbia and a diamond project with gold prospects in Nunavut, Dunnedin Ventures TSXV:DVI proposes to distribute its portfolio between two companies. On November 23 Dunnedin announced plans to spin out the non-diamond assets into a new listing.
The company currently holds the 60,000-hectare Kahuna diamond project in Nunavut, where an inferred resource for two kimberlites totals 4.02 million carats, using a +0.85 mm cutoff. Till samples collected last year also showed anomalous gold of 50 ppb or more in 84 of 129 samples.
Meanwhile previous drill results from Dunnedin’s 4,000-hectare Trapper porphyry project in northwestern B.C. showed strong gold intercepts, with silver, lead and zinc showings as well.
“We believe that separate corporate vehicles for diamond and metal assets will yield the best long-term value to shareholders,” said CEO Chris Taylor.
Subject to approvals, Trapper and rights to gold at Kahuna would go to a newly created subsidiary with working capital for exploration. The new company’s shares would be distributed to Dunnedin shareholders on a pro rata basis. The new company would apply for a TSXV listing.
Dunnedin shareholders will vote on the proposed spinout early next year.
Dunnedin also plans to accelerate expiration of over six million warrants to December 23. Should all warrants be exercised, proceeds would come to about $632,708.
by Greg Klein | November 15, 2016
A new joint venture brings together Arctic Star Exploration TSXV:ADD and Margaret Lake Diamonds TSXV:DIA in the Northwest Territories’ Lac de Gras region. Finding inspiration in Kennady Diamonds’ (TSXV:KDI) success at Kennady North, the partners plan a similar approach to their newly compiled property.
By posting an approximately $200,000 bond with the NWT government, Margaret Lake has earned a 60% interest in 23 claims totalling 18,699 hectares comprising the Diagras property, the JV announced November 15. Hosting 13 known diamondiferous kimberlites, the claims were formerly part of Arctic Star’s 54,000-hectare T-Rex property.
The bond accompanies an application to extend the Diagras claims to August 2017.
“We identified the claims we wanted to joint venture based on our evaluation of historic data and we specifically focused on those claims that have known kimberlitic occurrences,” said Margaret Lake president/CEO Paul Brockington. His company will act as project operator.
The JV intends to follow Kennady’s modus operandi. The property’s Kelvin and Faraday kimberlites were dropped by De Beers and Mountain Province Diamonds TSX:MPV as they advanced Gahcho Kué, recently opened as the world’s largest new diamond mine in 13 years.
De Beers considered Kelvin and Faraday low grade, based on their lack of prominent magnetic anomalies, according to the Arctic/Margaret JV. Mountain Province then spun out Kennady to explore the pipes. That company “applied ground geophysics, gravity and Ohm mapper EM, which revealed extensions to these kimberlites that were not revealed in the magnetics,” the Diagras partners stated. “Subsequent drilling and bulk sampling has shown that these non-magnetic phases of the kimberlites have superior diamond grades to the magnetic phases and significantly increase the tonnage potential.”
Looking at some nearby deposits, the JV states that certain kimberlites at the Rio Tinto NYSE:RIO/Dominion Diamond TSX:DDC Diavik mine and the high-grade portions of Peregrine Diamonds’ (TSX:PGD) majority-held DO-27 kimberlite “are non-magnetic, proof that a magnetic-only approach in the Lac de Gras field could miss significant diamondiferous kimberlite bodies.”
The JV plans to follow Kennady’s surveying approach at Diagras. Most of the property’s kimberlites have had only one to three drill holes into their magnetic anomalies.
The partners also see potential in “two untested geophysical targets and several diamond indicator mineral anomalies that are not clearly sourced from the known pipes.” Ground geophysics are scheduled to begin next spring.
by Greg Klein | November 11, 2016
An anti-establishment crusader, a dangerous extremist or a sensible person given to outrageous bombast, that new U.S. president-elect has some mining and metals observers in as much of a tizzy as the official commentariat.
Soon after the election result was announced, the World Gold Council cheered as their object of affection passed $1,300, “compared with $1,275 an ounce before the vote counting began.
“We are seeing increasingly fractious politics across the advanced economies and this trend, combined with uncertainty over the aftermath of years of unconventional monetary policies measures, will firmly underpin investment demand for gold in the coming years,” the WGC maintained.
Two days later gold plunged to a five-month low, “hit by a broad selloff in commodities as well as surging bond yields on speculation a splurge of U.S. infrastructure spending could stoke inflation.” At least that was Reuters’ explanation.
GoldSeek presented a range of comments, with Brien Lundin predicting a short rally for gold. GATA’s Chris Powell suggested the metal’s status quo would prevail. “Trump won’t be giving instructions to the Fed and Treasury until January, if he even has any idea by then of the market rigging the government does.”
About a day after that comment, Reuters noted that Trump’s team had been courting big banking bigshot Jamie Dimon of JPMorgan Chase & Co for Treasury secretary.
Powell added that a post-election “great grab for physical gold” might overpower “the paper market antics of the central bank. But geopolitical turmoil hasn’t done much for gold in recent decades and I’d be surprised if that changed any time soon.”
A pre-existing rally pushed copper past $6,000 a tonne on November 11, which Bloomberg (posted in the Globe and Mail) attributed to “Chinese speculators and bets that Donald Trump will pour money into U.S. infrastructure.”
Initial effects of Trump’s 10-year, $10-trillion campaign promise are “unlikely to kick in until the third quarter of 2017 and would in our view have the largest effect on steel, zinc and nickel demand,” Goldman analyst Max Layton told the Financial Times.
The FT also quoted Commerzbank cautioning that “metal prices still appear to be supported by the euphoria exhibited by market participants in the wake of Trump’s election victory, a reaction we find somewhat inexplicable.”
Industrial Minerals called a copper bubble.
Some sources consulted by the journal wondered whether the “pragmatic businessman” would carry out his threatened restrictions to free trade. As for Trump’s climate scepticism and opposition to green energy subsidies, Chris Berry told IM the economic case alone will sustain vehicle electrification and the resulting demand for lithium, cobalt and graphite.
Looking at a more sumptuous form of carbon, Martin Rapaport declared, “The diamond and jewelry trade will benefit as the new policies create a more prosperous middle class and greater numbers of wealthy consumers. Global uncertainty will also increase demand for investment diamonds as a store of wealth.”
But the outsider’s victory might have shocked Rapaport into ambiguity. While saying the election “sets the stage for growth and development,” a preamble to his November 9 press release called the result “positively dangerous.”
Not to be left out of the forecasting frenzy, ResourceClips.com predicts the Yukon tourist industry will add Frederick Trump, the Donald’s bordello-owning granddad, to its romanticized cast of colourful Klondike characters.