Wednesday 26th October 2016

Resource Clips

Posts tagged ‘North Arrow Minerals Inc (NAR)’

Exploring opportunity

June 17th, 2016

A capacity crowd attends the first annual Vancouver Commodity Forum

by Greg Klein
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A capacity crowd attends the first annual Vancouver Commodity Forum


“There’s excitement in the air,” said Cambridge House International founder Joe Martin. That’s the mood he senses as junior explorers emerge from the downturn. And certainly optimism was evident on June 14 as more than 450 people converged on the Vancouver Commodity Forum for an afternoon of expert talks amid a showcase of two dozen companies. Keynote speakers included Martin, Chris Berry of the Disruptive Discoveries Journal, Jon Hykawy of Stormcrow Capital, John Kaiser of Kaiser Research Online and Stephan Bogner of Rockstone Research.

A capacity crowd attends the first annual Vancouver Commodity Forum

Lithium, not surprisingly, stood out as a commodity of interest. While cautioning against over-enthusiasm for the exploration rush, Berry and Hykawy each affirmed the need for juniors to find new sources of the metal. Cobalt and scandium featured prominently too, as did other commodities including what Kaiser called “the weird metals”—lesser known stuff that’s vital to our lives but threatened with security of supply.

Kaiser also noted he was addressing a crowd larger than his last PDAC audience, another indication that “we’ve turned the corner.”

Attendees also met and mingled with company reps. Potential investors learned about a wide gamut of projects aspiring to meet a growing demand for necessities, conveniences and luxuries.

Presented by Zimtu Capital TSXV:ZC, the forum’s success will make it an annual event, said company president Dave Hodge. Berry emceed the conference, holding the unenviable task of “making sure Dave stays well-behaved.”

Read interviews with keynote speakers:

Meet the companies

Most companies were core holdings of Zimtu, a prospect generator that connects explorers with properties and also shares management, technical and financing expertise. Zimtu offers investors participation in a range of commodities and companies, including some at the pre-IPO stage.

After sampling high-grade lithium on its Hidden Lake project in the Northwest Territories earlier this month, 92 Resources TSXV:NTY plans to return in mid-July for a program of mapping, exposing spodumene-bearing pegmatite dykes, and channel sampling. The company closed the final tranche of a private placement totalling $318,836 in April. Hidden Lake’s located near Highway 4, about 40 kilometres from Yellowknife and within the Yellowknife Pegmatite Belt.

With one of the Athabasca Basin’s largest and most prospective exploration portfolios, ALX Uranium TSXV:AL has a number of projects competing for flagship status. Among them is Hook-Carter, which covers extensions of three known conductive trends, one of them hosting the sensational discoveries of Fission Uranium TSX:FCU and NexGen Energy TSXV:NXE. ALX’s strategic partnership with Holystone Energy allows that company to invest up to $750,000 in ALX and retain the right to maintain its ownership level for three years. ALX closed a private placement first tranche of $255,000 last month, amid this year’s busy news flow from a number of the company’s active projects.

A capacity crowd attends the first annual Vancouver Commodity Forum

Arctic Star Exploration TSXV:ADD boasts one of northern Canada’s largest 100%-held diamond exploration portfolios. Among the properties are the drill-ready Stein project in Nunavut and others in the Lac de Gras region that’s the world’s third-largest diamond producer by value. North Arrow Minerals TSXV:NAR holds an option to earn up to 55% of Arctic Star’s Redemption property.

Aurvista Gold TSXV:AVA considers its Douay property one of Quebec’s largest and last undeveloped gold projects. The Abitibi property has resources totalling 238,400 ounces of gold indicated and 2.75 million ounces inferred. Now, with $1.1 million raised last month, the company hopes to increase those numbers through a summer program including 4,000 metres of drilling. Douay’s 2014 PEA used a 5% discount rate to forecast a post-tax NPV of $16.6 million and a post-tax IRR of 40%.

Looking for lithium in Nevada, Belmont Resources TSXV:BEA now has a geophysics crew en route to its Kibby Basin property, which the company believes could potentially host lithium-bearing brines in a similar geological setting to the Clayton Valley, about 65 kilometres south. Results from the gravity survey will help identify targets for direct push drilling and sampling.

A mineral perhaps overlooked in the effort to supply green technologies, zeolite has several environmental applications. Canadian Zeolite TSXV:CNZ holds two projects in southern British Columbia, Sun Group and Bromley Creek, the latter an active quarrying operation.

With a high-grade, near-surface rare earths deposit hosted in minerals that have proven processing, Commerce Resources TSXV:CCE takes its Ashram project in Quebec towards pre-feasibility. The relatively straightforward mineralogy contributes to steady progress in metallurgical studies. Commerce also holds southeastern B.C.’s Blue River tantalum-niobium deposit, which reached PEA in 2011 and a resource update in 2013.

Permitted for construction following a 2014 PEA, Copper North Mining’s (TSXV:COL) Carmacks copper-gold-silver project now undergoes revised PEA studies. The agenda calls for improved economics by creating a new leach and development plan for the south-central Yukon property. In central B.C. the company holds the Thor exploration property, 20 kilometres south of the historic Kemess mine.

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Arctic Star and North Arrow announce drilling at Redemption diamond project

March 22nd, 2016

by Greg Klein | March 22, 2016

Located in the Northwest Territories’ diamondiferous Lac de Gras region, the Redemption project now has ground geophysics and drilling underway. Announced March 22 by Arctic Star Exploration TSXV:ADD and North Arrow Minerals TSXV:NAR, the program calls for a week of geophysics, while the rig’s expected to be busy until late April. The companies hope to find the source of the South Coppermine indicator mineral train.

Arctic Star and North Arrow announce drilling at Redemption diamond project

Angular and coated grains among the indicator
minerals suggest a shorter distance to their source.

Previous work has included electromagnetics, gravity and sonar surveys, as well as 350 till samples. Diamonds have been found among the indicator minerals. Other encouraging signs include pyropes with high chrome, ilmenite, chromite and eclogitic garnet. Angular stones, as opposed to smoother shapes, suggest shorter transport from the source.

Redemption lies about 32 kilometres southwest and 47 kilometres west of the NWT’s two currently operating diamond mines, Dominion Diamond’s (TSX:DDC) majority-held Ekati and the Dominion/Rio Tinto NYSE:RIO 40%/60% JV at Diavik. North Arrow funds the Redemption program and acts as operator under a 55% earn-in which would require $5 million of work by July 1, 2017.

North Arrow’s portfolio includes a majority stake in the Pikoo diamond project in Saskatchewan, where drilling began last month. Arctic Star also holds the T-Rex and Triceratops kimberlite clusters northwest of Ekati, and the Stein property in Nunavut.

See Chris Berry’s research report on long-term diamond demand.

Arctic Star president/CEO Patrick Power explains how North Arrow funds drilling at the Redemption project in the NWT

February 23rd, 2016

…Read more

North Arrow deal to fund drilling on Arctic Star diamond project

January 25th, 2016

by Greg Klein | January 25, 2016

Arctic Star Exploration’s (TSXV:ADD) Redemption diamond project stands to gain from a royalty sale by North Arrow Minerals TSXV:NAR. With an option to earn 55% of the project, North Arrow has signed a deal with Umgeni Holdings International to sell part of its share of royalties on the property for $800,000. The money would help fund drill programs at North Arrow’s Pikoo diamond project in Saskatchewan as well as the Redemption project in the Northwest Territories’ diamondiferous Lac de Gras region.

Pikoo has drilling scheduled to begin in mid-February, with Redemption following in about a month.

This agreement will allow the team to immediately move ahead with exploration drilling programs at the Redemption diamond property without impacting Arctic Star’s treasury at all.—Patrick Power, president/CEO of Arctic Star Exploration

North Arrow’s Redemption option requires the company to fund $800,000 in exploration by August. The full 55% calls for North Arrow to spend $5 million by July 2017.

Subject to approvals, the $800,000 sale gives Umgeni a 1.5% gross overriding royalty on diamonds and a 1.5% NSR on base and precious metals for three claims held 100% by North Arrow, as well as a 1.25% GOR and 1.25% NSR on 12 claims and five mining leases now under option from Arctic Star. North Arrow holds sole responsibility for paying the royalties.

Umgeni is a private company in which North Arrow director Christopher Jennings is a beneficiary of the sole shareholder. The agreement would also give Umgeni the right to acquire North Arrow’s Redemption interest. But should the option terminate, Umgeni would lose any right to royalties on claims in which North Arrow no longer held an interest.

“This agreement will allow the team to immediately move ahead with exploration drilling programs at the Redemption diamond property without impacting Arctic Star’s treasury at all,” commented president/CEO Patrick Power.

Previous work has found kimberlite indicator mineral trains including diamonds. Last summer North Arrow, which funds all work on Redemption, reported ground gravity surveys over 25 targets. The property also benefits from 52 overburden RC drill holes by the NWT Geoscience Office in and around Redemption to build a database on indicator minerals and till geochemistry.

T-Rex, another Arctic Star property in Lac de Gras, has 12 known kimberlites. Two have shown diamonds and two others feature kimberlite indicator minerals down-ice. The company also holds the Stein diamond project in Nunavut.

Back on the autobahn

November 2nd, 2015

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

by Greg Klein

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Overseas investors once again get to meet Canadian juniors in person, as prospect generator Zimtu Capital TSXV:ZC and 11 of its holdings visit four European cities from November 5 to 11. Now in the event’s fifth year, company reps will hold conferences in Munich, Geneva, Zurich and Frankfurt to largely institutional audiences, demonstrating the wide-ranging interest in exploration opportunities.

“Essentially it’s a commitment by Zimtu and all the participating companies to keep the European investor informed about what the companies are doing, to meet the management and form a relationship with the guys who are going to be making the decisions, effectively spending their money,” says Zimtu president Dave Hodge.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

The Zimtu bus arrives as crowds enter
Munich’s Edelmetallmesse in 2014.

“Many of the investors who are still interested in the sector had made great money in the past and experienced tremendous upside in some stocks. Certainly the Canadian junior market is very unique globally and provides that opportunity for the European investor to speculate on discovery.”

Describing himself as a “grizzled veteran of the Zimtu bus,” Chris Berry acts as MC, moderator and keynote speaker. The president of House Mountain Partners and co-editor of the Disruptive Discoveries Journal says, “I like to go back and get a sense of what institutional investors in those cities are thinking about, not just about commodity markets but central bank policies and the macro economy.”

His talk will briefly review the perspectives he offered last year then “challenge the audience” with four questions to consider in 2016. “It’s really more of a discussion than a lecture and I hope there’s a lot of pushback and debate. That gets people thinking and hopefully planning for better times next year.”

While the downturn’s all too obvious, several Zimtu holdings have made impressive strides over the last year. Some of the more remarkable stories include the creation of ALX Uranium TSXV:AL after Lakeland Resources and Alpha Exploration won overwhelming shareholder approval to combine their companies. The result is a distinguished team overseeing one of the Athabasca Basin’s largest and most prospective portfolios.

Competing for flagship status are a number of drill-ready projects including Kelic Lake, where a rig’s currently at work. Gibbon’s Creek has a ground gravity survey underway to follow up on last winter’s 2,550-metre program on a property hosting some of the Basin’s highest radon levels. The company’s Carter Lake and Hook Lake properties feature around 15 kilometres of untested corridors on strike with the Patterson Lake South, Arrow and Spitfire discoveries. Other drill-ready projects include Newnham Lake and Lazy Edward Bay, a 60% stake in the Carpenter Lake joint venture and an 80% share of the Gorilla JV.

Well financed for additional campaigns, the ALX team has been poring over property data to further establish priorities.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

Commerce Resources addresses last year’s Munich conference.

Focusing on a rare earths project with relatively simple mineralogy, Commerce Resources TSXV:CCE continues to make progress with drilling, metallurgy and community engagement as its Ashram deposit in northern Quebec moves towards pre-feasibility. Last month the company increased rare earth elements recovery from 71% to 76% at a high grade of 42% total rare earth oxides, while also simplifying the plant’s flowsheet. The most impressive concentrates so far have graded 48.9% TREO at 63% recovery and 45.7% TREO at 71% recovery.

Following high-grade, near surface assays from the winter/spring drill program, Commerce has a summer/fall campaign targeting around 32 holes for 3,000 metres. A new infrastructure model indicates cost-cutting potential. The company’s commitment to social responsibility won an award from l’Association de l’exploration minière du Québec.

In British Columbia, Commerce’s Blue River tantalum-niobium project achieved its preliminary economic assessment in 2011.

Recognizing that the great nickel deposits of Sudbury, Norilsk, Thompson and Raglan occur in clusters, Equitas Resources TSXV:EQT acquired the recently assembled Garland project in Labrador, 30 kilometres from Voisey’s Bay. Then, for the first time, Equitas subjected Garland to modern geophysics. Now a drill program under the supervision of Voisey’s veteran Everett Makela has 12 VTEM anomalies targeted.

With over $3.8 million raised since September, the company continues drilling while awaiting initial assays.

Inspired by China’s allure for the beauty and practical qualities of B.C. jade, Electra Stone TSXV:ELT intends to create a vertically integrated nephrite jade mining, trading and marketing platform. The company began by acquiring properties as well as expertise, and has so far confirmed jade at two of six projects before winter conditions ended exploration.

Eager to make contact with potential buyers, Electra bought and shipped an 18-tonne cargo of jade to Shanghai in September and is now preparing a second shipment. The company also produces chalky geyserite, or aluminum silica, from a Vancouver Island quarry. The product’s U.S. customer collaborated with Electra on a drill program last summer to study the project’s expansion potential.

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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.

Arctic Star looks to T-Rex for Lac de Gras diamonds

August 5th, 2015

by Greg Klein | August 5, 2015

A 54,000-hectare property in the Northwest Territories’ diamond-rich Lac de Gras region has come under renewed attention by Arctic Star Exploration TSXV:ADD. After reviewing previous work on the T-Rex project, the company announced on August 5 it plans further exploration itself.

Arctic Star looks to T-Rex for Lac de Gras diamonds

Production at Ekati’s Jay pipe would likely ensure winter road
access within 10 kilometres southwest of Arctic Star’s T-Rex project.
Image: Tibbitt to Contwoyto Winter Road JV

Details of the plans weren’t divulged. But Arctic Star stated it “has verified through research and compilation that the property hosts over a dozen kimberlites, most of them diamondiferous.”

The company’s staked ground overlaps the Hardy Lake property explored by De Beers between 1992 and 2003 and by Majescor Resources TSXV:MJX for another five years under option. The latter company “reported 26 high-interest areas defined by anomalous kimberlite indicator mineral samples and kimberlite float,” according to Arctic Star. In 2005 Majescor stated that “large, very prospective sectors [of Hardy Lake] have been inadequately sampled.”

De Beers collected 2,335 till samples, with 1,000 showing kimberlite indicator minerals on Hardy Lake. The global giant analysed 29,123 minerals and put Hardy Lake through 16,709 line-kilometres of geophysics, 144 geophysical grids and 137 drill holes, according to Arctic Star. The company stated it acquired about 65% of De Beers’ data that was filed as assessment work and “forms a strong basis for future exploration.”

Costs would benefit from the site’s proximity to the Tibbitt-to-Contwoyto winter road, which is “expected to be ploughed as far as the Jay kimberlite for decades to come,” Arctic Star stated. The route links Dominion Diamond’s (TSX:DDC) majority-held Ekati mine with Yellowknife, 400 kilometres south by road.

Currently undergoing permitting, Jay could potentially add 11 years to Ekati, extending its lifespan to 2031. Dominion hopes to begin Jay’s construction next year.

Lac de Gras also hosts two other diamond mines, Rio Tinto NYE:RIO/Dominion’s 60/40 Diavik and De Beers’ Snap Lake. Combined, the three operations place the NWT third globally for diamond production by value.

De Beers and Mountain Province Diamonds TSX:MPV expect to add a fourth Lac de Gras operation by H2 2016 with Gahcho Kué, considered the world’s richest diamond development project.

In June Arctic Star reported preliminary geophysical and surficial geology evaluations from its Redemption project, also in Lac de Gras. With work carried out by 55% earn-in partner North Arrow Minerals TSXV:NAR, the results will be used to define targets for a spring 2016 drill program, the companies stated.

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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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.

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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.

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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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.