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Posts tagged ‘Kennady Diamonds Inc (KDI)’

$48 million to fund Kennady Diamonds to feasibility, Dermot Desmond in for $12 million

October 9th, 2015

by Greg Klein | October 9, 2015

Big money continues to pour into the Northwest Territories’ Lac de Gras region. A day after Kennady Diamonds TSXV:KDI closed the second tranche of a private placement totalling $48.12 million, Irish billionaire Dermot Desmond announced his contribution of $12.37 million. Between him and a company he owns, Bottin (International) Investments, Desmond’s stake now comes to 24.6% of Kennady’s 46.9 million issued and outstanding shares.

$48-million to fund Kennady Diamonds to feasibility, Dermot Desmond in for another $12 million

With a maiden resource imminent, Kennady Diamonds
talks confidently of taking its project to feasibility.

Bottin also owns 23.27% of Mountain Province Diamonds TSX:MPV, which holds 49% of the Gahcho Kué joint venture, “the world’s largest and richest new diamond mine.” Operator and 51% owner De Beers has the project on schedule for Q3 2016 production, making it the fourth diamond mine in Lac de Gras, a region that already ranks third globally for diamond production by value. Kennady’s Kennady North project surrounds Gahcho Kué on three sides.

Patrick Evans serves as Kennady’s CEO and Mountain Province’s president/CEO.

Just days before closing the private placement, Kennady announced a 2.4-tonne bulk sample from the Kelvin North Lobe graded an average 2.6 carats per tonne. Previous samples from the kimberlite graded 2.74 c/t in June and 2.57 c/t last January.

Four kimberlites on the project have summer/fall drill programs of about 8,000 metres on Kelvin, 12,000 on Faraday, 2,500 on MZ and another 2,500 on Doyle.

Kennady says its latest cash infusion will fund all aspects of the project to the end of 2017, including a preliminary economic assessment, a feasibility study and permitting. The project’s maiden resource should debut this quarter.

Read more about Canadian diamond mining and exploration.

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 The principals of OnPage Media may hold shares in Zimtu Capital.

The drama of discovery

July 17th, 2015

Not without excitement, the quest continues for Canadian diamonds

by Greg Klein

Calling it an “exceptionally rare” occurrence, Kennady Diamonds TSXV:KDI geologists spotted a macro diamond while logging drill core from the Faraday 2 kimberlite on July 15. It was the second such find in a year for the Kennady North project and probably rendered less than momentous by foreknowledge that the pipe did in fact contain diamonds. Even so, the event brings to mind a dramatic moment in Canadian diamond history.

The scene also took place in the Northwest Territories’ Lac de Gras region, but during late winter 1994. As recounted in Matthew Hart’s Diamond: The History of a Cold-Blooded Love Affair, 24-year-old Eira Thomas ran the project for Aber Resources while her father, Gren Thomas, conducted merger negotiations down south. Eira feared the deal would close at a disadvantage to Aber despite lab recovery of micro diamonds from the property’s A-21 kimberlite.

Not without excitement, the quest continues for Canadian diamonds

Standing up to disagreement from a partner as big as Rio Tinto NYE:RIO, the young geo thought she was on the brink of a more substantial discovery with the A-154 target. Even as lake ice began thawing, Thomas not only persuaded the crew to continue barge-based drilling but cajoled them into working a heavier, larger-diameter rig. Just as weakening ice finally forced the drillers to quit, Aber geologist Robin Hopkins found kimberlite studded with indicator minerals. Summoned by phone calls, Aber and Rio staff descended on the camp.

As they gathered in the core tent, Hopkins spotted something protruding from a piece of core. Hart writes:

Hopkins tried to scratch the crystal with his thumbnail, and couldn’t. When he looked up, he saw that Thomas was raptly watching him. “No way,” he breathed. He passed the core with the crystal embedded in it to Buddy Doyle of Rio Tinto. Doyle stared at it. “No fucking way,” he said, and handed it on to Thomas. She took the core in her hands and gazed at it, a two-carat diamond bouncing light from its crystal face.

That dramatic moment presaged Diavik, Canada’s second diamond mine and successor to Ekati, itself the result of Chuck Fipke’s adventurous spirit as well as geological acumen. Now, with three Lac de Gras mines in operation, the NWT ranks third globally for diamond production by value.

Yet the lifespan of Ekati, majority-owned by Dominion Diamond TSX:DDC, ends in 2020. The mine’s Jay deposit could potentially extend the expiry date to 2031, according to the company. Diavik, held 60/40 by Rio and Dominion, would last to 2023, even with the addition of a fourth pipe, the A-21 that Thomas discovered before A-154.

Snap Lake, De Beers’ first mine outside Africa, could continue operating until 2028, albeit with declining output. Earlier this year the company warned a much earlier shutdown might occur if an amended water licence wasn’t approved. Last month the Mackenzie Valley Land and Water Board recommended the territorial government grant approval for a plan to flush a higher proportion of dissolved solids into water that’s discharged into the lake.

De Beers also produces Canadian diamonds at its Victor mine in Ontario’s James Bay lowlands. The discovery actually dates back to 1987, about five years before Fipke’s historic find. But the Ontario mine didn’t open until 2008.

As those four mines mature, Stornoway Diamond TSX:SWY plans to pick up some of the slack with its Renard project in Quebec’s James Bay region. With commercial production slated for Q2 2017, Renard would give up 1.6 million carats annually for 11 years, about 2% of global supply, the company estimates.

Back at Lac de Gras, the world’s richest diamond development project continues to progress. Last week Mountain Province Diamonds TSX:MPV announced construction at Gahcho Kué was 62% complete and on schedule for H2 2016 operation. Also headed by Kennady president/CEO Patrick Evans, Mountain Province holds a 49% stake in the project, which is operated by JV partner De Beers. It’s expected to produce an average 4.5 million carats a year over a 12-year life.

Not surprisingly, Lac de Gras hosts a busy exploration play. Gahcho Kué’s next-door neighbour Kennady North remains the most advanced. On July 15, the same day the Faraday 2 stone lit up Kennady’s core shack, the company reported lab recovery results from Faraday 2’s spring drill program. About 930 kilograms of kimberlite returned a sample grade of 1.93 carats per tonne for diamonds of commercial size.

Of 247 individual diamonds described by the lab, 37% were transparent and white/colourless, while 56% were off-white. With 97% of the sample showing transparent white or off-white gems, the results could “have a positive impact on diamond values,” Evans stated.

The company expects recovery results from Kelvin’s 436-tonne bulk sample by the end of Q3. Results from a 2.6-tonne sample of Kelvin South Lobe kimberlite should arrive in early September.

Saskatchewan, meanwhile, hosts a more advanced diamond project in Shore Gold’s (TSX:SGF) majority-held Star-Orion South. Although it passed a federal environmental review in December, the company now seeks to cut pre-production capex through a revised mine plan and feasibility study.

Kennady finds macro diamond while logging Faraday 2 kimberlite core

July 16th, 2015

This story has been moved here.

De Beers diamonds dazzle Anglo American’s portfolio

February 13th, 2015

by Greg Klein | February 13, 2015

A diversified miner battered by commodity prices, Anglo American sees increasing value in its diamond division. De Beers, as a February 13 Reuters story put it, is rapidly rising to become the jewel in the giant’s crown.

De Beers’ “profit leapt by more than a third in 2014 at the same time as its parent company Anglo saw earnings drop by about a quarter, hammered by a dive in prices of metals such as iron, copper and coal,” the news agency reported. “It overtook copper last year to become the second-largest contributor to group profit, fast closing the gap with the flagship iron ore business.”

De Beers diamonds dazzle Anglo American’s portfolio

Diamonds outshone almost every other commodity
mined by global giant Anglo American.

Anglo holds 85% of the vertically integrated diamond company, with Botswana holding the rest.

Calling its rise dramatic, Reuters added, “In 2013 De Beers accounted for 15% of group underlying earnings before interest and tax (EBIT) and the iron ore business 47%. But last year the diamond division’s share rose to 28% of the group’s $5-billion EBIT, while iron ore fell to 40%.

Earlier this month the Sunday Times stated Anglo “risks a downgrade to ‘junk’ status as it faces billions of dollars of write-downs and plunging profits as commodity prices tumble.”

De Beers estimates a 4% increase in global polished diamond sales last year, rising to about $26 billion, and forecasts another 3% to 4% rise in 2015, according to Reuters.

De Beers, which sells rough and polished diamonds as well as finished jewelry, once controlled about 80% of global rough sales according to diamond analyst Paul Zimnisky. He now attributes about 35% of global rough sales, nearly 15% more than De Beers’ own share of production, to the company’s diamond trading subsidiary.

The company’s Canadian operations consist of the Victor mine in Ontario and Snap Lake in the Northwest Territories’ Lac de Gras region. Another Lac de Gras holding is Gahcho Kué, in which De Beers has a 51% stake with 49% joint venture partner Mountain Province Diamonds TSX:MPV. Considered the world’s most promising new diamond development project, it’s scheduled for H2 2016 production.

While the global veteran took on Gahcho Kué’s majority stake and role of operator, Mountain Province spun out a Lac de Gras advanced exploration project to Kennady Diamonds TSXV:KDI. Earlier this week the Irish Times reported the latter company no longer wants a senior partner. If its Kennady North project “is confirmed [as an economic diamond project], then, subject to regulatory approvals, we would look to open a mine within about five years,” said Patrick Evans, president/CEO of Kennady and Mountain Province. “Our intention is to develop the asset without a senior partner.”

Read about diamond supply and demand.

Read about diamond mining in Canada.

Replenishing reserves

December 11th, 2014

With a decade of diamond demand outgrowing supply, Canada’s a target for new sources

by Greg Klein

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Diamonds: Global supply and demand

Miners of other commodities might welcome half of the diamond dilemma. Forecasts see continued market growth for another decade. But production will taper off. That’s the 10-year prognosis from Bain & Company and the Antwerp World Diamond Centre. Meanwhile another report from the NWT and Nunavut Chamber of Mines addresses the need to maintain production in the Northwest Territories, the world’s third-largest source of diamonds by value and home to a busy exploration scene.

The December 9 Bain study, which generally agrees with a September report from De Beers, expects an average 4% to 5% compound annual growth in rough diamond demand to 2024 driven largely by India, the U.S. and especially China. Supply growth, on the other hand, should lag behind at 3.5% to 4% up to 2019, then fall to somewhere between 1.5% and 2% for another five years.

With a decade of diamond demand outgrowing supply, Canada’s a target for new sources

The world’s largest source of new production would be Gahcho Kué, the De Beers/Mountain Province Diamonds TSX:MPV joint venture slated for 2016 production in the NWT’s Lac de Gras region. The mine’s expected to produce between five and six million carats annually to 2020.

Bain forecasts Lukoil’s Grib mine in Russia at four to 4.5 million carats a year when it begins operation in 2016. After that would come the Karpinsky-1 pipe at ALROSA’s Lomonosov project in Russia, expected to yield about three million carats annually after reaching commercial production in 2015. Stornoway Diamond’s (TSX:SWY) Renard project in Quebec, slated for 2016 commercial production, should be good for another 1.5 million carats a year. Looking farther ahead, Rio Tinto’s (NYSE:RIO) Bunder mine in India is projected to yield another three million carats annually on reaching full production in 2020 or 2021.

“Other new mines under development are relatively small; each is projected to produce one million or fewer carats annually,” the report states.

“Because it takes seven to 10 years to develop a mine, even if major new deposits were discovered within the next few years, there would not be enough time to bring them to full production by the end of the forecast period,” the study adds.

Diamond supply: The Canadian outlook

The supply/demand imbalance notwithstanding, jewelry retailers show increasing eagerness to trace diamonds to ethical sources, Bain points out.

Among those sources is Canada, renowned for high-quality, conflict-free stones. Diamond mining now takes place in Ontario and the NWT, with Quebec expected to join soon and Saskatchewan another possible contender. Output from just three mines in Lac de Gras ranks the NWT region third globally for diamond production by value.

Of those three, Dominion Diamond’s (TSX:DDC) majority-held Ekati is projected to run out of ore in 2019, according to the NWT and Nunavut Chamber of Mines. The chamber gives the Dominion/Rio Diavik operation a life expectancy to 2024 and De Beers’ Snap Lake until 2028.

Rio has since announced plans to bring Diavik’s A-21 deposit online. Yet the chamber maintains A-21’s expected to maintain current production, not extend mine life.

Ekati’s best chance for a stay of execution is the Jay project, “the largest diamondiferous resource in North America,” according to Dominion, and a potential extension of 10 or more years to the Ekati operation. Should environmental approval arrive by the end of 2015, Dominion hopes to begin operations by 2019.

Diamond exploration: The juniors move in

Not surprisingly, it’s up to the juniors to meet growing demand. Since Canadian diamonds are found in kimberlites and kimberlites tend to come in clusters, most exploration takes place near known deposits—with the hope that nearby kimberlites will also contain diamonds.

The hottest hotbed of activity is the NWT, especially around Gahcho Kué. Kennady Diamonds TSXV:KDI holds turf on three sides of the project. Last month the company mobilized for more exploration and delineation drilling on Kelvin, one of the Kennady North project’s four diamond-bearing kimberlites. Diamond recovery results are expected by year-end from two more mini-bulk samples.

Another Gahcho Kué neighbour, Prima Diamond TSXV:PMD holds the 42,000-hectare Godspeed Lake project immediately south of the mine-to-be. Forty kilometres northwest of Gahcho Kué and 35 kilometres east of Snap Lake, Prima holds the 14,000-hectare Munn Lake project. A 581-kilogram sample from one Munn Lake kimberlite gave up 226 diamonds while a 42-kilogram sample from another revealed 14 diamonds. Prima also optioned the Orion diamond property, 2,275 hectares in Quebec’s Otish Corridor, north of Stornoway’s upcoming operation.

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Prima appoints diamond expert Harrison Cookenboo VP of exploration

November 4th, 2014

by Greg Klein | November 4, 2014

A geologist involved in the discovery of Gahcho Kué, considered the world’s largest diamond development project, now brings his expertise to Prima Diamond TSXV:PMD as VP of exploration. Dr. Harrison Cookenboo’s background includes diamond exploration in Brazil, Russia and Canada, where he also helped discover Ontario’s largest diamond-bearing kimberlite.

“We have been searching for just the right diamond expert to lead our exploration program,” said CEO/president Robert Bick. “I am pleased to announce that Harrison Cookenboo fits the bill perfectly.”

Prima appoints diamond expert Harrison Cookenboo VP of exploration

With a successful background in diamond discovery,
Dr. Harrison Cookenboo brings his talents to Prima Diamond.

His pursuit of diamonds began after several years in the field and completion of his PhD in geology. The Ekati and Diavik discoveries sparked further diamond exploration in the same Northwest Territories region. There, Cookenboo joined Canamera Geological Ltd, which was working under contract to Mountain Province Diamonds TSX:MPV.

Calling it “pretty exciting times,” Cookenboo tells, “I got involved in till sampling, setting up the lab where we processed 60,000 till samples over the next five or six years, discovered some mines and got to publish quite a bit of stuff about the exploration.”

“I was in charge of the quality of sample processing and getting all the information we could get out of those samples, then tie them to the airborne geophysics and also try to get more information out of the chemistry of the individual grains. We ended up discovering Gahcho Kué—what we discovered was the 5034 pipe, which is still the biggest and most important part of the mine. I ended up doing really all the geology on that including the 100-tonne mini-bulk sample, core logging, indicator mineral chemistry, building the 3D model.”

The momentous discovery came one night in February 1995 and immediately preceded another. “Canamera also discovered the Jericho mine the same night, which was really exciting. It made for an interesting next day, I’ll tell you.”

What attracted him to Prima? “First of all, the properties,” he responds. “They have really nice locations in the Northwest Territories, as well as the properties in Quebec. There have been some new developments in the Northwest Territories with some nice results out of the Kennady Diamonds [TSXV:KDI] project, making it a good time to look in that area again in places that really were only lightly explored. A lot of properties just outside of places like Gahcho Kué and Snap Lake were just lightly explored. Gahcho Kué is certainly going to become a world class mine shortly and Kennady is doing better than had been anticipated, so it’s opening that area up.”

In August Prima picked up two highly strategic properties—the Munn Lake project, 35 kilometres east of the Snap Lake diamond mine and 40 kilometres northwest of Gahcho Kué, and the Godspeed Lake project, adjacently south of Gahcho Kué and east of Kennady’s Kennady North. Last month Prima optioned the Orion diamond properties in Quebec’s Otish corridor, north of another mine in development, Stornoway Diamond’s (TSX:SWY) Renard project.

Past work on Munn Lake has revealed two diamondiferous kimberlites and at least five kimberlite indicator trains.

“Prima’s properties have the right address, there are some really good reported results from the first exploration boom and it’s good to be involved with Roger Morton, the professor emeritus at the University of Alberta. Everybody in the industry knows him,” added Cookenboo.

“I think Prima will prove itself an aggressive new diamond exploration company in a couple of the most important areas of Canada. That’s certainly a good thing for this time because I’ve seen a lot more diamond exploration interest and motivation around the world just in the last six months or even less.”

Read more about Prima Diamond.

Disclaimer: Prima Diamond Corp is a client of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in Prima Diamond.

Kennady, Margaret Lake update Lac de Gras diamond projects

September 16th, 2014

by Greg Klein | September 16, 2014

The most advanced of the juniors in the Northwest Territories’ diamond-rich Lac de Gras region, Kennady Diamonds TSXV:KDI announced a $5-million private placement September 16, one day after releasing a progress report for its Kennady North project. Approximately $3.5 million of the placement has already been subscribed to by Bottin International Investments, Kennady’s largest shareholder.

The project lies adjacently north and west, and to the southwest, of Gahcho Kué, scheduled by De Beers and Mountain Province Diamonds TSX:MPV to start producing diamonds in the second half of 2016.

Kennady, Margaret Lake update Lac de Gras diamond projects

Four known kimberlites and about four exploration targets
have drilling scheduled this season at Kennady North.

Kennady reported a delineation hole that added another 215 metres (not true width) to the project’s Kelvin kimberlite, surpassing last July’s 183-metre intercept that the company had called the project’s longest to date. The new result started at a shallower-than-expected downhole depth of 157.5 metres and remains open at 373 metres in depth. A “fan” of three holes at different angles has delineated Kelvin “well beyond the current geological model,” said CEO Patrick Evans. “Preparations are now underway for the drilling of a fan of three further delineation holes to continue tracking Kelvin to the north.”

That will follow four other delineation holes, two drilling to the east and two to the west, with the three-hole fan in the pipe’s centre.

Of the other recently reported holes, one showed 32.15 metres of kimberlite starting at 215.7 metres. Two holes at different angles from the same collar found 161.5 metres starting at 127 metres in depth, and 164 metres starting at 152.25 metres.

When diamonds are found in Canada, they’re in kimberlites. But few kimberlites actually host the gems. Earlier this month, however, staff logging Kelvin drill core noticed a “high-quality” 0.94-carat diamond that Kennady described as “white/colourless, transparent, octahedral, distorted, twin with etched trigons” and without inclusions. The stone came from a depth of about 75 metres.

Expected in Q4 are lab results for the 25-tonne mini-bulk sample extracted from Kelvin last spring. The summer program has pulled out another 22.5 tonnes of Kelvin kimberlite. In addition to delineation and mini-bulk sampling, the season’s agenda calls for exploration drilling at Kelvin.

Kennady North’s Faraday, MZ and Doyle kimberlites also have drilling scheduled this season, as do approximately four new exploration targets. Early last month Kennady lauded Faraday results of 5.1 carats per tonne as among Canada’s highest-ever sample grades.

Also on September 15 Margaret Lake Diamonds TSXV:DIA reported from two nearby properties. Margaret Lake lies immediately north of Kennady North, with a thin southward extension that partly divides its neighbour. West of Margaret Lake, the eponymous company optioned 49% of Canterra Minerals’ (TSXV:CTM) Marlin property.

Airborne gradiometry and magnetics have been completed on Margaret Lake and part of Marlin. The latter property will also get “a digital terrain model together with detailed bathymetry using WorldView2 high-resolution satellite imagery,” the company stated.

On reviewing Margaret Lake’s historic ground geophysics, the company identified three targets in the property’s narrow southern extension. As for the recent survey, preliminary analysis “shows a gravity response that relates to the two historic ground gravity targets,” the company added. “These three targets exhibit characteristics similar to known kimberlite bodies and will be subject to further evaluation.”

Besides the Gahcho Kué mine-in-progress, Lac de Gras hosts three of Canada’s four diamond producers, Diavik (60% Rio Tinto NYE:RIO/40% Dominion Diamond TSX:DDC), Ekati (80% Dominion) and De Beers’ Snap Lake.

Other companies exploring Lac de Gras include Canterra, North Arrow Minerals TSXV:NAR, Arctic Star Exploration TSXV:ADD and Prima Diamond TSXV:PMD.

Read more about Lac de Gras exploration and Prima Diamond.

Read about diamond markets, geology and exploration.

Disclaimer: Prima Diamond Corp is a client of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in Prima Diamond.

Diamond fever hits the NWT

September 10th, 2014

Prima Diamond lands prime locations to pursue the Northwest Territories’ gems

Reprinted by permission of Market One Media

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Diamond deposits, in the words of one senior geologist, are like pigeons. Where you find one, you’re likely to find an entire flock.

That’s the guiding logic behind a new wave of diamond mine development and claim staking in the Slave Craton in the Northwest Territories. The NWT already serves as host to some of the world’s richest diamond mines, starting with Ekati and Diavik, followed by Snap Lake, all in the central corridor of the Slave Craton.

A new wave of exploration pursues gems in the Northwest Territories

Gahcho Kué diamond mine under construction, projected to open in 2016.

Next to follow is the Gahcho Kué diamond project southeast of the prolific Ekati and Diavik diamond mines. When it begins production in 2016, Gahcho Kué is reputed to become one of the largest and richest new diamond mines in the world. This $700-million project has a combined probable mineral reserve estimated at 55.5 million contained carats. De Beers Canada owns 51% of Gahcho Kué and is the operator of the proposed mine. Mountain Province Diamonds TSX:MPV, which discovered the Gahcho Kué diamond resource, owns 49%.

Next to Gahcho Kué is the Kennady North project with four confirmed diamond pipes. Two of the pipes returned diamond sample grades two to three times greater per tonne than Gahcho Kué, as reported by the company.

Circling in the vicinity of Gahcho Kué are projects led by successful veterans of the original 1990s Canadian diamond rush: Randy Turner, CEO of Canterra Minerals TSXV:CTM; Buddy Doyle, director and vice-president of exploration with Margaret Lake Diamonds TSXV:DIA; and Patrick Evans, president and CEO of Kennady Diamonds TSXV:KDI.

Turner discovered the Snap Lake diamond mine. Evans led SouthernEra Resources when it performed much of the foundational geological research in the Slave Craton area two decades ago. Doyle led a team involved in the Diavik discovery. He also took part in exploration at one of two properties in the area acquired this year by Prima Diamond TSXV:PMD.

In mineral exploration, “closeology”—proximity to a mineral resource—can mean a lot, or a little. For a gold deposit, it’s usually irrelevant. For diamonds it’s a whole different story.

“The best place to seek a high-grade diamond deposit is close to one that has already been identified,” explains Roger Morton, professor emeritus in the Department of Earth and Atmospheric Sciences at the University of Alberta.

Prima Diamond—a comparative newcomer to the diamond exploration business—won the staking rush to acquire the highly prized Munn Lake property north of Gahcho Kué. Its Godspeed Lake property is immediately adjacent to Gahcho Kué on the south and has barely been explored.

“Diamonds tend to be like pigeons. They go around in flocks,” Morton says, pointing to Gahcho Kué as the spark for surging interest in the area. “In the Munn Lake area, for example, there is a kimberlite which is the host rock for diamonds.”

Interest in the southern Slave Craton took another jump this summer when tonnage estimates in Kennady’s Kelvin-Faraday kimberlite corridor increased by 30% to 10 million tonnes.

With its two properties, Prima is well positioned to take advantage of the excitement. The 14,000-hectare Munn Lake is 40 kilometres northwest of Gahcho Kué and 40 kilometres east of the Snap Lake diamond mine. It has been the site of $6 million worth of exploration, leading to the discovery more than a decade ago of a diamondiferous kimberlite, and huge kimberlite boulders resting at surface, some as large as 25 metres in diameter.

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Exceeding expectations

September 4th, 2014

As Dominion Diamond leads the way, others vie for a share of Lac de Gras riches

by Greg Klein

Better than expected production volumes, grades, sales and prices mark another strong quarter for Dominion Diamond’s (TSX:DDC) two Lac de Gras-region mines in the Northwest Territories. Announced September 3, the fiscal Q2 2015 financials show strong performance and optimistic forecasts for a company that refrains from modesty—it boasts a reputation as “the world’s third-largest producer of rough diamonds by value.”

Those bragging rights result from the company’s 40% interest in the Diavik mine, which is operated by majority owner Rio Tinto NYE:RIO, and Dominion’s 80% stake in Ekati, which the company operates itself. Dominion also holds a 58.8% ownership in resources surrounding Ekati.

Quoting all dollar amounts in U.S. currency, Dominion recorded a Q2 net income of $26.6 million or $0.31 per share. The treasury ended the quarter with cash and cash equivalents totalling $384 million. Three months of sales brought in $277.3 million, with $107 million coming from Diavik and $170.3 million from Ekati. Dominion’s operating profit came to $46.5 million, nearly three times the $15.7-million profit for the same period last year.

As Dominion Diamond leads the way, others vie for a share of Lac de Gras riches

Not included in the figures was $10.6 million in sales from Ekati’s Misery satellite pipes, still classified as pre-production in Q2. They began commercial production on September 1.

Production numbers were reported differently for the two mines. Dominion reported 40% production figures for its 40%-held Diavik but 100% production for its 80%-held Ekati. Diavik’s numbers came from three months ending June 30 while Ekati’s came from the quarter ending July 31. On that basis, Ekati produced 802,000 carats, compared to 483,000 for the same period last year. Diavik gave up 860,000 carats compared to 624,000. Overall production for the last two quarters exceeded company expectations by 30%.

The stones find willing buyers. That six-month period “saw continuing growth in diamond jewellery sales in the United States and the mass market in China, which together account for over half of the world’s diamond jewelry sales, resulting in rough diamond prices rising approximately 8%,” Dominion stated. A seasonal slowdown “failed to materialize this year due to the strength in the polished diamond markets.”

The quarter’s exploration expenses came to $6.8 million, compared to $3.1 million for Q2 2013. All of it went to the Jay pipe, part of Ekati’s Buffer zone and considered to be the mine’s future. Hoping to extend Ekati’s life by another decade beyond 2019, Dominion has budgeted $15.5 million on Jay, to develop North America’s “largest diamondiferous resource.”

But Ekati’s not the only Lac de Gras project bursting with superlatives. “The world’s largest and richest new diamond development project,” as owners Mountain Province Diamonds TSX:MPV and De Beers call Gahcho Kué, is planned for full commercial production by January 2017.

That will be Canada’s fifth operating diamond mine, including De Beers’ Snap Lake, also in Lac de Gras, and its Victor mine in Ontario.

[The six-month period] saw continuing growth in diamond jewellery sales in the United States and the mass market in China, which together account for over half of the world’s diamond jewelry sales, resulting in rough diamond prices rising approximately 8%.

And, as Kennady Diamonds TSXV:KDI shows at its Kennady North project, there are yet more Lac de Gras diamonds to be found. Located north, west and south of Gahcho Kué, the project’s focus is the Kelvin kimberlite which undergoes delineation, exploration and mini-bulk sample drilling. The current program also has drills scheduled to turn at three other kimberlites and around four new exploration targets. Results from a previous Kelvin bulk sample, along with an initial resource, are expected in Q4.

North of Kennady North, Margaret Lake Diamonds TSXV:DIA nears completion of an airborne gravity survey over its Margaret Lake property, recently expanded to 23,199 hectares. Late last month the company optioned 49% of Canterra Minerals’ (TSXV:CTM) Marlin property contiguous to the north and west of Kennady North, and west of Margaret Lake.

Canterra crews have spent the summer on till sampling at the company’s Hilltop, King, Marlin, Prism and Gwen properties, all located between Snap Lake and Gahcho Kué.

In July Prima Diamond TSXV:PMD moved immediately south of Gahcho Kué and east of Kennady North to pick up the 42,000-hectare Godspeed Lake project. Prima followed that acquisition with another in August, the 14,000-hectare Munn Lake, from where a 581-kilogram sample from one kimberlite yielded 226 diamonds while a 42-kilogram sample from another revealed 14 diamonds.

Even Dominion, unsated by success at Ekati and Diavik, wants more of the region’s gems. The company’s currently earning 55% from North Arrow Minerals TSXV:NAR of the Lac de Gras joint venture, which has so far undergone till sampling and geophysics. In the same vicinity, meanwhile, North Arrow is earning 55% of the Redemption project, a JV with Arctic Star Exploration TSXV:ADD. After summer drilling wrapped up last month, intervals from a fault zone are being analyzed for kimberlite indicator minerals.

Read more about Lac de Gras diamond activity.

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