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Posts tagged ‘North Arrow Minerals Inc (NAR)’

Seeking sub-Arctic ice

August 8th, 2014

Prima Diamond joins the NWT Lac de Gras play with two compelling acquisitions

by Greg Klein

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According to the old maxim, nothing succeeds like success. But certain successful people can’t seem to get enough of it.

That’s drawn some of them back to the region of the dramatic diamond discoveries of 1990s Northwest Territories. Now exploration undergoes a new surge of activity, again focusing on the area around Lac de Gras which hosts three of the four mines that place Canada third for global diamond supply by value. Veterans of the earlier campaigns have returned, armed this time with not just experience but new technology. Evidently they believe the region has even more diamonds to be found. And, around the world, a growing market wants them.

Activity thrives at every stage, from early exploration to resource development to building Gahcho Kué, considered by partners De Beers and Mountain Province Diamonds TSX:MPV to be “the world’s largest and richest new diamond development project.” Remarkably, there’s still under-explored turf.

Prima Diamond joins the Lac de Gras play with two compelling acquisitions

Gahcho Kué will take its place with the region’s other producers, Ekati (majority-held by Dominion Diamond TSX:DDC), Diavik (40% Dominion, 60% Rio Tinto NYE:RIO) and Snap Lake (De Beers), as well as the former Jericho mine.

Bordering Gahcho Kué to the north, west and south is Kennady Diamonds’ (TSXV:KDI) Kennady North property, which continues to show promising results as the project moves towards a year-end maiden resource.

Among the others is Canterra Minerals TSXV:CTM, which last April expanded its regional portfolio by 43,000 hectares that show indicator mineral trains potentially associated with diamond-bearing kimberlite. Late last month Canterra got a $2-million vote of confidence from Jimmy Pattison, the richest of Canada’s rich.

The Redemption project brings together joint venture partners Arctic Star Exploration TSXV:ADD and North Arrow Minerals TSXV:NAR in a 1,000-metre summer drill program that hopes to locate the source of diamonds found in the property’s glacial till.

Last spring Margaret Lake Diamonds TSXV:DIA moved into the region with a 70% option on 19,716 hectares, placing the company adjacently north of Gahcho Kué and contiguously north and west of Kennady North.

Some notable people can be found on the companies’ management and boards. Canterra president/CEO Randy Turner and director John McDonald took Winspear Diamonds from the Snap Lake discovery to its sale to De Beers. Canterra director James Eccott goes back to Dia Met Minerals, the Chuck Fipke/Stewart Blusson company that found Ekati. Australian diamond rush veteran Buddy Doyle serves as VP of exploration for both Margaret Lake and Arctic Star. The latter company’s JV partner reunites him with some former Aber Resources alumni—Ken Armstrong, Grenville Thomas, the legendary Christopher Jennings and, of Diavik discovery fame, Eira Thomas.

Obviously they expect Lac de Gras to give up more diamonds. Joining them is Prima Diamond TSXV:PMD with two properties, both strategically located and featuring compelling characteristics. Last month Prima acquired the 42,000-hectare Godspeed Lake, adjacently south of Gahcho Kué and east of Kennady North. Then, on August 5, the company picked up Munn Lake, more than 14,000 hectares that’s 35 kilometres east of Snap Lake, 40 klicks northwest of Gahcho Kué and next to the northern boundary of Canterra’s Gwen property.

The wonder of Munn Lake is that it ever lay dormant. Some $5.7 million of exploration between 1996 and 2007 yielded two diamondiferous kimberlites. A 581-kilogram sample from the Yuryi kimberlite revealed 226 diamonds, including 62 macrodiamonds above 0.5 millimetres in diameter. A 42-kilo sample from the Munn Lake kimberlite showed 14 diamonds, including two macros.

At least five kimberlite indicator trains line the property. One of them might have started at the Munn Lake kimberlite. The others have unknown origins.

For all that, the project hasn’t seen modern exploration. “We can’t find any information that suggests the property was flown with a gravity survey,” says Jody Dahrouge, senior geologist/president of Dahrouge Geological Consulting. “Initial exploration in the Territories relied heavily on magnetics and electromagnetics to identify kimberlite targets. Diamond indicator minerals of course are a critical element to drilling any target.”

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Zimtu research delves into diamond markets, geology and exploration

August 6th, 2014

by Greg Klein | August 6, 2014

As coveted gems, diamonds might seem to have an aura of mystery about them. But diamond exploration need not extend that mystery to potential investors. A newly released 12-page report by Derek Hamill, head of research and communications for Zimtu Capital TSXV:ZC, takes readers through the essential topics. Among them are rough diamond prices, diamond geology and exploration methods, as well as economic and cultural trends that could influence future demand.

Canada, it turns out, is “one of the few large diamond producers with exploration potential, rule of law, infrastructure, technical expertise and efficient capital markets.” Hamill looks closely at the Northwest Territories’ Lac de Gras region, “the standout among Canadian production centres.”

He also takes a look at two Zimtu core holdings working in the region, Arctic Star Exploration TSXV:ADD and Prima Diamond TSXV:PMD. Arctic Star, in joint venture with North Arrow Minerals TSXV:NAR, has a six- to eight-hole summer drill program underway at their Redemption project. Last month Prima Diamond moved into the region by picking up the Godspeed Lake property immediately south of Gahcho Kué, a JV of Mountain Province Diamonds TSX:MPV and De Beers that’s slated for 2016 production. Just today Prima acquired the Munn Lake project, with its diamondiferous boulder train and kimberlite.

Download the 12-page research and opinion report.

Disclaimer: Zimtu Capital Corp and Prima Diamond Corp are clients of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in those companies.

Kennady and Peregrine report from the Lac de Gras diamond region

July 25th, 2014

by Greg Klein | July 25, 2014

It’s Ekati in the language of the Dene and Lac de Gras in French. They both mean “Fat Lake” and, following the first diamond discovery there, the name extended to that area of the Slave geological province in the Northwest Territories. Roughly 300 kilometres northeast of Yellowknife, the region hosts three diamond mines and a fourth under development. On July 24 Kennady Diamonds TSXV:KDI and Peregrine Diamonds TSX:PGD updated their projects in the region.

Encouraging results from Kennady North—including the project’s longest-yet kimberlite intercept—have prompted Kennady to double its summer drill program to about 10,000 metres. A third rig will join the 61,000-hectare property, currently the site of delineation drilling and mini-bulk sampling, as well as exploration.

Kennady and Peregrine report from the Lac de Gras diamond region

A couple of rough stones recovered from Kennady’s 2013 program.

The Kelvin dyke’s star result was a 183-metre intersection (not true width) of kimberlite starting at a downhole depth of 151 metres outside the current geological model. Another delineation hole revealed 124 metres of kimberlite starting at 114.6 metres. Four mini-bulk samples at shallow depth showed kimberlite results of 102 metres, 110.3 metres, 102.4 metres and 72.6 metres.

The project hosts four known kimberlites, with Kelvin and Faraday undergoing both delineation drilling and mini-bulk sampling while MZ and Doyle get exploration drilling. In addition the company has identified at least four new geophysical targets.

A 25-tonne sample extracted from Kelvin last spring is now being processed, with results expected in early Q4. Diamond recovery from a one-tonne Faraday sample should be announced this quarter.

Last year’s recoveries “returned exceptional sample grades,” the company stated. A 4.3-tonne Kelvin sample showed 5.38 carats per tonne. A 116-kilogram Faraday sample graded 11.23 ct/t. The three largest Kelvin diamonds were a 2.48-carat off-white transparent octahedral, a 1.06-carat off-white broken aggregate and a 0.9-carat off-white transparent irregular. “The recovery of diamonds of this size and quality from a 4.3-tonne sample is very encouraging,” Kennady maintained.

The company has a maiden resource for the Kelvin-Faraday kimberlite corridor scheduled by year-end.

Kennady North lies adjacently north, west and south of Gahcho Kué, scheduled for production in 2016. Owners De Beers (51%) and Mountain Province Diamonds TSX:MPV (49%) like to call it “the world’s largest and richest new diamond development project.”

Immediately south of Gahcho Kué and neighbouring Kennady is Godspeed Lake, a 42,000-hectare property acquired by Prima Diamond TSXV:PMD earlier this month.

In other Lac de Gras news this month, Arctic Star Exploration TSXV:ADD and North Arrow Minerals TSXV:NAR announced their Redemption joint venture would undergo summer drilling of six to eight holes totalling about 1,000 metres.

Not to be ignored, Canada’s original diamond mine was the subject of a July Ekati update from Dominion Diamond TSX:DDC.

The same day Kennady released its drill results, Peregrine announced an updated technical report for its 15,810-hectare Lac de Gras project. The document summarizes work since 2008 on the project, where the DO-27 kimberlite hosts an indicated resource of 18.2 million carats. The company stated it’s “reviewing options, including commercial opportunities, to advance the project” which contains nine known kimberlites.

Ownership is somewhat fragmented, with the project divided into three areas. The DO-27 resource sits on the WO property, held 72.1% by Peregrine, 17.6% by Archon Minerals TSXV:ACS and 10.3% by DHK Diamonds Inc. The project also consists of the LDG Thelon property (70.5% Peregrine, 29.5% Thelon Capital TSXV:THC) and the LDG Peregrine property (100% Peregrine).

Last May Peregrine released an initial resource estimate for its flagship Chidliak project on Nunavut’s Baffin Island.

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

Athabasca Basin and beyond

July 19th, 2014

Uranium news from Saskatchewan and elsewhere for July 12 to 18, 2014

by Greg Klein

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High-grade U3O8 helps Fission delineate

Still enthusiastically proving that high grades can come from shallow depths, Fission Uranium TSXV:FCU released more assays from winter drilling on July 14. Six infill holes from the central portion of R780E, the middle and largest of five zones, complemented the previous week’s batch from the zone’s eastern area. An additional hole from R1155E proved less impressive but provided the strongest results so far from that zone.

Some highlights from R780E show:

Hole PLS14-172

  • 2.1% uranium oxide (U3O8) over 28 metres, starting at 86 metres in downhole depth
  • (including 5.88% over 8.5 metres)
Uranium news from Saskatchewan and elsewhere for July 12 to 18, 2014

With five barges afloat over Patterson Lake South, Fission Uranium
has another season to drill prior to releasing a December resource.

  • 0.23% over 11 metres, starting at 131.5 metres

  • 0.54% over 18 metres, starting at 168 metres
  • (including 1.62% over 4.5 metres)

  • 0.6% over 10 metres, starting at 224 metres

Hole PLS14-181

  • 0.46% over 27.5 metres, starting at 118 metres
  • (including 1% over 9 metres)

  • 6.01% over 17.5 metres, starting at 148 metres
  • (including 23.53% over 4 metres)

Hole PLS14-183

  • 0.14% over 18 metres, starting at 109 metres

  • 0.21% over 10.5 metres, starting at 147 metres

  • 0.66% over 13.5 metres, starting at 176.5 metres
  • (including 1.22% over 5.5 metres)

  • 1.63% over 3.5 metres, starting at 193.5 metres

  • 1.1% over 6.5 metres, starting at 213 metres

  • 0.48% over 6 metres, starting at 244 metres
  • (including 1.11% over 2 metres)

Hole PLS14-184

  • 2.02% over 14.5 metres, starting at 110.5 metres
  • (including 8.31% over 2 metres)

  • 7.66% over 2 metres, starting at 136 metres

  • 1.65% over 19 metres, starting at 158.5 metres
  • (including 4.45% over 3.5 metres)

Hole PLS14-189

  • 1.93% over 15 metres, starting at 262.5 metres

  • 0.44% over 13 metres, starting at 281 metres
  • (including 1.03% over 4.5 metres)

Hole PLS14-191

  • 0.22% over 6.5 metres, starting at 99 metres

  • 0.62% over 9 metres, starting at 122 metres
  • (including 1.7% over 2.5 metres)

  • 1% over 3.5 metres, starting at 152.5 metres

On the R1155E zone, the better results from PLS14-191 showed:

  • 0.2% over 8 metres, starting at 197.5 metres
  • (including 1.28% over 0.5 metres)

  • 0.33% over 3.5 metres, starting at 211 metres

  • 0.1% over 5.5 metres, starting at 359 metres

True widths weren’t provided. Fission Uranium stated PLS14-191 “opens up the potential to discover increased amounts and higher grades of mineralization from this area, including further to the south and within the 75-metre gap separating R780E and R1155E.” The 31,039-hectare project’s 2.24-kilometre potential strike remains open to the east and west.

Still to come are assays for 32 holes from last winter’s 92-hole program. Now underway is a 63-hole, 20,330-metre campaign worth $12 million to focus on R780E. That would bring the project’s total to about 263 holes totalling around 83,500 metres. December’s the deadline for the maiden resource.

Cigar Lake suspended as Cameco encounters freezing failure

Progress continues on the technological challenge of extracting Cigar Lake’s uranium deposit—but not “as quickly as expected,” Cameco Corp TSX:CCO conceded July 16. As a result production has been suspended to allow some areas of the mine to freeze more thoroughly. In an innovative method to prevent flooding “where the water-saturated Athabasca sandstone meets the underlying basement rocks,” the company injects and freezes a brine solution around the rock body. Water jet boring then extracts the ore. (Watch a video here.) Now Cameco has stopped operations to allow “additional freezing.”

Noting that the McClean Lake mill, 70 kilometres away, hasn’t started processing Cigar Lake feed, the suspension “will allow more continuous production at the mine once the mill is operational.” Cameco anticipates a couple of months’ delay that will affect 2014 production, which was originally estimated at 770 to 1,100 tonnes of uranium concentrate. The long-term annual target of 18 million pounds U3O8 by 2018 remains unaffected.

The company will provide another update during its July 31 Q2 discussion.

Flooding in 2006 and 2008 had already set back development at the eastside Athabasca Basin mine, which began construction in 2005. The first ore shipment finally left Cigar Lake in March. McClean Lake was scheduled to begin processing last quarter, following modifications to the leaching circuit.

The world’s second-largest high-grade uranium deposit, Cigar Lake holds grades 100 times the global average. The joint venture is held 50.025% by Cameco, 37.1% by AREVA Resources Canada, 7.875% by Idemitsu Canada Resources and 5% by TEPCO Resources.

Another JV, McClean Lake is held 70% by AREVA, 22.5% by Denison Mines TSX:DML and 7.5% by OURD Canada.

Read more about Cigar Lake.

Athabasca Nuclear/Strike Graphite merger would combine uranium and diamond projects

Exploration in two Saskatchewan plays would come together under one entity should a merger go through between Athabasca Nuclear TSXV:ASC and Strike Graphite TSXV:SRK. The companies announced that intention on July 15, subject to conditions and approvals. Athabasca Nuclear holds a number of uranium properties including its Preston Lake flagship, which the company operates for the four-company Western Athabasca Syndicate. Strike has received conditional TSXV approval for its 80% acquisition of two properties in the Sask Craton that are contiguous to the Pikoo diamond discovery made last November by North Arrow Minerals TSXV:NAR.

The deal would exchange one Athabasca Nuclear share for each Strike share, with a similar swap of options and warrants. Strike would then become a wholly owned subsidiary of Athabasca Nuclear but presumably would not be called Nuclear Strike. Athabasca Nuclear would be held 73.9% by its current shareholders and 26.1% by Strike shareholders. Athabasca Nuclear’s officers and BOD would remain unchanged, except for the board addition of Blair Way, now a Strike director.

Among the deal’s conditions is two-thirds approval by Strike shareholders. The companies hope to consummate by September 20.

Read about diamond mining and exploration in Canada here and here.

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Searching in Redemption

July 16th, 2014

Arctic Star and North Arrow want to uncover more Northwest Territories diamonds

by Greg Klein

The circumstances seem just about right. Studies forecast diamond demand overtaking supply, Canadian diamonds enjoy special prestige for quality and ethical production, and advances in geophysics have improved the likelihood of discovery. Under these fortuitous conditions Arctic Star Exploration TSXV:ADD and North Arrow Minerals TSXV:NAR have mobilized to drill their Redemption project in the Northwest Territories’ diamond-producing Lac de Gras region. In doing so, some veteran explorers join forces again, searching for further success.

It was Lac de Gras that first brought Canada fame as a gemstone producer. The region currently hosts three of Canada’s four operating mines. The 11,493-hectare Redemption has proximity to two of them, Dominion Diamond’s (TSX:DDC) Ekati mine, 32 kilometres northeast, and Diavik (40% Dominion, 60% Rio Tinto NYE:RIO), 47 klicks east. Diavik looms large in the backgrounds of people involved in the Arctic Star/North Arrow joint venture.

Arctic Star and North Arrow want to uncover more Northwest Territories diamonds

The Redemption camp during last spring’s geophysical surveys.

Buddy Doyle, Arctic Star’s VP of exploration, got started in diamonds with Rio Tinto during the 1970s Australian rush. He eventually left Rio for Kennecott Exploration Australia and was dispatched to Papua New Guinea, where he took part in the famous Minifie gold discovery at Lihir.

“That was exciting and then Rio Tinto bought Kennecott, so I ended up back with Rio,” Doyle recounts. “The diamond rush broke out in Canada and I was one of a few people left from the Australian rush, so they transferred me to Canada.” He then led an exploration team involved in the Diavik discovery.

That was under a JV between the Rio subsidiary and Aber Resources. “But the junior gets talked about and the major doesn’t,” says Doyle. “I get a $5,000 bonus, their share price goes to 50 bucks.”

Nevertheless, “the people at Aber are good friends and now some of them are with North Arrow,” he adds. Among them are North Arrow president/CEO Ken Armstrong, adviser Eira Thomas, chairperson Grenville Thomas and director Christopher Jennings. They have, as Doyle describes it, “the Lukas Lundin machine behind them.”

Now North Arrow is funding Redemption under a 55% earn-in which would call for $5 million in exploration by July 1, 2017. This summer’s agenda entails six to eight holes totalling about 1,000 metres. North Arrow acts as project operator but Doyle will maintain a presence at the camp.

A primary focus is the South Coppermine train, described by North Arrow as the “last remaining big, unsourced Lac de Gras indicator mineral train,” a trail of glacial till containing minerals that originated in a kimberlite body that might contain diamonds.

“The targets we have now are gravity-based,” Doyle points out. “This is a fairly new technology that was exclusive to BHP [NYE:BHP] before they sold it. It’s got better and better and better. I used it 10 years ago and didn’t like it but now it’s really good.”

As the original owner of Ekati, BHP flew a gravity survey over that project and “found a dozen more kimberlites that weren’t detected by anything else,” Doyle says. “So we flew the system at the head of this indicator train. Right at the head of the train, where you’d expect the source to be, we’ve got a very nice gravity and magnetic anomaly. Then we’ve got eight other anomalies in similar positions that explain other indicator trains.”

Geochemistry, as well as diamonds within the till, confirm the kimberlites bear diamonds. “The good thing about indicators is you can diagnose them and say the source is going to be diamondiferous,” Doyle explains. “You can’t say it’s going to be economic, but you can say it’s going to be diamondiferous.”

Right at the head of the train, where you’d expect the source to be, we’ve got a very nice gravity and magnetic anomaly. Then we’ve got eight other anomalies in similar positions that explain other indicator trains.—Buddy Doyle, VP of exploration for Arctic Star

“So we’re very encouraged and there are a whole bunch of lake targets to drill as well,” he says. “We’re just drilling on land this summer, then there’s a half-dozen more to drill next winter. It’s going to be an exciting program.”

The campaign takes place at a time when money is flowing around some of the more advanced projects. Earlier this month Dominion announced its intention to buy out Ekati diamond pioneer Chuck Fipke in a deal that could bring his company $67 million.

One day previous, Stornoway Diamond TSX:SWY closed “the largest-ever project financing package for a publicly listed diamond company,” a $946-million package to put its Renard project in Quebec into production. Back in the NWT late last month, Mountain Province Diamonds TSX:MPV closed a $45.5-million private placement to help fund Gahcho Kué, a 49%/51% JV with De Beers that’s labelled “the world’s largest and richest new diamond development project.” A few days later Mountain Province announced that drilling outside the project’s Tuzo Deep resource confirmed kimberlite to a depth of 740 metres below surface.

For all the big money pouring into advanced projects, one recent acquisition suggests the NWT might still have fertile ground for early-stage exploration. Early this month Prima Diamond TSXV:PMD announced acquisition of the Godspeed Lake property immediately south of Gahcho Kué.

In more advanced work north of Gahcho Kué, Kennady Diamonds TSXV:KDI, a Mountain Province spinout, has announced a minimum 5,000-metre summer program to delineate its Kelvin and Faraday kimberlites, as well as explore other areas of the Kennady North project.

 

Read more about diamond mining and exploration in Canada:

  • A bourse marks its course: The Diamond Bourse of Canada wants to encourage secondary industry while enhancing our global stature

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

Canada’s kimberlite delights

June 5th, 2014

Diamond supply, demand and preference for Canadian stones drives exploration

by Greg Klein

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Complex the diamond trade might be, but its fundamentals look clear enough—steadily rising prices along with forecasted demand outpacing supply. Those reasons alone will send explorers into action but Canadian projects offer additional advantages of favourable geology, high-quality stones and ethical practices. That explains the resurgence of diamond activity in the northern and not-so-northern reaches of the country.

Two years of rising prices have been attributed to new demand in China and India, as well as a return to pre-crisis demand levels in the U.S., still the world’s biggest diamond market, according to a May 27 report by Dundee Capital Markets.

Dundee cites figures from Bain & Company’s Global Diamond Report 2013, which calculated a decade of supply growing at 2% annually, outpaced by demand growth of 5.1% as “existing mines get depleted and no major new deposits come online.”

Diamond supply, demand and preference for Canadian stones drives exploration

A helicopter lifts off during a recently completed ground geophysical
survey at the Arctic Star/North Arrow Redemption project.

Among other implications, jewellers need to “secure an adequate and consistent supply of polished diamonds in the range of sizes, shapes and colours suited to their product lines,” Bain stated. “A number of premium retailers have already integrated backwards along the value chain by investing in mining assets and cutting and polishing operations and securing access to primary rough supply. This trend is expected to continue.”

Although Russia, Botswana and the Democratic Republic of Congo comprise the world’s top three suppliers by quantity, the quality of Canadian diamonds puts this country in third place for dollar value, Dundee points out.

Canada currently supplies the market from four mines, three of them in the Northwest Territories’ Lac de Gras region: Ekati (80% Dominion Diamond TSX:DDC, with 10% each held by diamond pioneers Chuck Fipke and Stewart Blusson), Diavik (40% Dominion, 60% Rio Tinto NYE:RIO) and Snap Lake (100% De Beers, which is held 85% by Anglo American). De Beers also produces diamonds at its Victor mine in Ontario’s James Bay region.

Most new near-term production would come from Stornoway Diamond’s (TSX:SWY) Renard project in Quebec, scheduled for commercial production in June 2016, the De Beers (51%)/Mountain Province Diamonds TSX:MPV (49%) Gahcho Kué mine in the NWT, slated for H2 2016 production, and probably Rio’s Bunder project in India, Dundee states.

Keeping in mind the 10 to 12 or more years needed to take an economic discovery into production, “they need to be looking now,” emphasizes Dave Hodge, president of Zimtu Capital TSXV:ZC. “So the world market is encouraging the exploration industry to keep that supply chain full.”

As head of a prospect generator, Hodge sees the action from the perspective of small-cap juniors integral to potential discoveries. “There’s no question that Canadian diamonds are going to be very strong in the future, and that’s why the exploration industry is getting turned on right now. This is the moment of opportunity. This is when the exploration companies can shine and find a discovery that’s going to provide the world with diamonds for the future.”

His company recently vended an 80% interest in a diamond prospect to Strike Graphite TSXV:SRK in the Pikoo area of Saskatchewan that’s grabbed a lot of attention. Meanwhile summer drilling is planned for the Lac de Gras region’s Redemption project, a joint venture that partners North Arrow Minerals TSXV:NAR with Arctic Star Exploration TSXV:ADD, a Zimtu core holding. Not surprisingly, Zimtu’s actively pursuing additional diamond transactions.

“People looking for something special want a Canadian diamond because they know it’s conflict-free,” Hodge adds. “It’s something you can give to your wife without wondering whether somebody died for it.”

Another impetus for exploration is exploration itself. When successful, it can create its own momentum. Jody Dahrouge, senior geologist/president of Dahrouge Geological Consulting, says Canada’s initial exploration boom, sparked by Fipke’s early 1990s Ekati discovery, “finally faded just like any exploration or commodity cycle.” But interest has revived, partly due to the Pikoo discovery announced last November by North Arrow, which is earning 80% of the project from Stornoway. Dahrouge credits Pikoo with “fantastic diamond counts, albeit at a very small sample size from a small kimberlite body.”

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Mountain Province Diamonds increases private placement to $17.85 million

March 12th, 2014

by Greg Klein | March 11, 2014

Bought deal brings Mountain Province Diamonds $15.3 million

JV partners Mountain Province and De Beers hope to begin production at
“the world’s largest and richest new diamond mine development” by December 2015.

 

Update: On March 12 Mountain Province increased its $15.3-million offering to 3.5 million shares at $5.10 for $17.85 million.

A company that hopes to open Canada’s next diamond mine announced a $15.3-million cash infusion March 11. The bought deal involves three million Mountain Province Diamonds TSX:MPV shares at $5.10. The transaction is expected to close on or about March 28. Mountain Province also intends to offer a non-brokered private placement at the same price.

The company has a feasibility update scheduled for release later this month on the Gahcho Kué project, which it calls “the world’s largest and richest new diamond mine development.” Construction began in December on the 4,189-hectare site at Kennady Lake, about 300 kilometres northeast of Yellowknife. A joint venture in which De Beers holds a 51% interest, Gahcho Kué is anticipated for production by December 2015.

In another private placement that closed late last month, North Arrow Minerals TSXV:NAR got $5 million to advance three projects, all JVs. The company plans a 1,500-tonne bulk sample at its Qilalugaq project in Nunavut and till sampling at the Pikoo property in Saskatchewan. North Arrow holds 80% options on both projects with Stornoway Diamond TSX:SWY.

North Arrow also has a 55% option with Arctic Star Exploration TSXV:ADD on the Redemption project in the Northwest Territories, scheduled for till sampling and geophysics this year.

Read more news about diamond exploration, mining and markets.

Opportunities in opulence

March 7th, 2014

From Canada to Antwerp, diamond explorers, miners and traders serve a thriving market

by Greg Klein

For giant miners and junior explorers alike, diamonds upheld their market lustre in 2013 and show further encouragement this year. So it wasn’t quite an industry-wide shock when one record-shattering sale fell through. A group of investors fronted by New York diamond cutter Isaac Wolf defaulted on last November’s $83.2-million bid for the Pink Star, Sotheby’s revealed late last month. Now the auctioneer’s out the $60 million guaranteed to the anonymous seller. But the company retains the stone, to which it attributes an “inventory” value of $72 million. Meanwhile, undeterred by the caprice of the super-rich, efforts continue to find, mine and market opulence for the affluent.

This month Rio Tinto NYE:RIO heads to Antwerp and Israel for the company’s first rough diamond tender of 2014. Rio says this offer of 124 lots “showcases a unique combination of white and fancy-coloured rough diamonds” from its mines in Australia, the Northwest Territories and Zimbabwe. Among notable stones from the NWT’s Diavik, Rio’s peddling a 70-carat white diamond, several purple diamonds and some “fancy and intense” yellow diamonds.

From Canada to Antwerp, diamond explorers, miners and traders serve a thriving market

Kennady Diamonds has infill drilling underway
at its Northwest Territories diamond project.

Once pulled out of the ground, about 80% of the world’s diamonds go to Antwerp, the undisputed capital of global trade since the 15th century. The city handles about $11.2 billion worth of rough stones annually, out of a global total of $14.2 billion, according to the Antwerp World Diamond Centre. Vying for a piece of the action are some 1,850 local companies crowded into their own fabled district with “Flemish, Orthodox Jewish and Indian diamantaires working alongside manufacturers, rough and polished dealers, buyers and services providers from almost every country in which diamonds are mined, processed, bought and sold.”

The centre characterized last January as an “excellent 2014 kick-off” in which the value of exports jumped 27.7% and imports 21% over the same month last year. Exports showed “an all-around increase, principally to the usual consumer markets India, the United Arab Emirates and Hong Kong.”

Polished diamonds picked up too. January exports improved 9.69% and imports 13.79% in value over the same month in 2013.

Although the stones’ esthetic vagaries complicate matters, diamond prices remained relatively stable last year, avoiding the declines seen in precious metals. Giants did well, with Rio reporting a 15% increase in diamond revenue over 2012. De Beers proclaimed 2013 “a strong year of growth” for its Forevermark diamond brand, “driven predominantly by continued consumer demand in core markets, China, U.S., India and Japan.” Many Canadian-listed juniors and mid-tiers rose well above the malaise suffered by their counterparts in other commodities.

Among activity within Canada, Kennady Diamonds TSXV:KDI continues working towards a maiden resource for its eponymous project in the NWT. Infill drilling began last week, according to a March 6 statement, part of a plan to better define the Kelvin kimberlite body prior to a mini-bulk sample of 25 to 30 tonnes. Last year a 4.3-tonne sample from Kelvin showed 5.38 carats per tonne with the three largest diamonds comprising “a 2.48-carat off-white transparent octahedral, 1.06-carat off-white broken aggregate and a 0.9-carat off-white transparent irregular,” Kennady stated.

The March 6 update also reported an amended exploration agreement with the Lutsel K’e Dene First Nation and receipt of a five-year land use permit and seven-year water licence.

The same day Shore Gold TSX:SGF announced a “target for further exploration” for its central Saskatchewan properties. A TFFE uses exploration data to disclose potential quantity and grade that might not be realized in an eventual resource estimate. On that basis, Shore’s TFFE for seven kimberlites “is estimated to include between 983 million and 1.17 billion tonnes of kimberlite containing between 52 and 90 million carats.”

The seven kimberlites spread over two properties, Shore’s wholly-owned Star-Orion South project and the adjacent Fort à la Corne, a joint venture shared 67%/33% between Shore and Newmont Mining Corp of Canada TSX:NMC.

A 2011 feasibility study showed a probable reserve for the Star and Orion South deposits:

  • Star: 165.89 million tonnes averaging 12.3 carats per hundred tonnes for 20.386 million carats of diamonds

  • Orion South: 113.09 million tonnes averaging 12.4 cpht for 13.994 million carats

  • Total: 278.98 million tonnes averaging 12.3 cpht for 34.38 million carats

The two deposits also have inferred resources totalling 9.1 million carats.

In other Canadian diamond activity, North Arrow Minerals TSXV:NAR closed a $5-million private placement late last month to fund three projects, two of them 80% options with Stornoway Diamond TSX:SWY. The Qilalugaq property in Nunavut is slated for a 1,500-tonne bulk sample and an Antwerp valuation next summer. Pikoo, a Saskatchewan project heralded for its diamond discovery in November, is expected to undergo till sampling this year to seek out additional kimberlites.

On the earlier-stage Redemption project in the NWT, North Arrow holds a 55% option with Arctic Star Exploration TSXV:ADD. This year’s plans include till sampling and geophysics at the 11,493-hectare project, 32 kilometres from the Ekati mine and 47 from the Diavik mine.

Dominion Diamond TSX:DDC looms large in the region, holding an 80% interest in Ekati, 58.8% of the mine’s Buffer zone and 40% of Diavik. Chuck Fipke and Stewart Blusson, two pioneers of Canadian diamond exploration, each hold 10% of Ekati, while Rio holds 60% of Diavik. Dominion ranks fourth worldwide for diamond production by value.

An Antwerp report that came through in late February evaluated a 1,013.5-carat parcel of commercial-size stones for Peregrine Diamonds TSX:PGD. Taken from the CH-6 kimberlite pipe in Nunavut, the gems were priced at an average of $213 per carat for a total of $215,605. Peregrine has a resource scheduled for CH-6 by the end of Q2.

The valuation was conducted by WWW International Diamond Consultants, a company that’s familiar with Canadian projects and currently evaluating diamonds for Gahcho Kué in the NWT. JV partners De Beers (51%) and Mountain Province Diamonds TSX:MPV (49%) plan to use the data in a feasibility update scheduled for release by the end of March. Gahcho Kué’s expected to become Canada’s next diamond mine.

Read more about diamond mining and exploration in Canada here and here.

Athabasca Basin and beyond

January 12th, 2014

Uranium news from Saskatchewan and elsewhere to January 10, 2014

by Greg Klein

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Fission Uranium says lower-grade assays confirm new PLS zone 195 metres east

Fission Uranium TSXV:FCU continues to pick away at its nearly 50-hole backlog of assays from Patterson Lake South. Results released December 30 come from the project’s eastern-most high-grade zone as well as a not-so-high-grade zone farther east.

Highlights from hole PLS13-099 on zone R945E include:

  • 0.11% uranium oxide (U3O8) over 15 metres, starting at 122 metres in downhole depth

  • 0.14% over 16 metres, starting at 140 metres

  • 0.99% over 23.5 metres, starting at 159.5 metres
  • (including 2.49% over 8.5 metres)

  • 3.99% over 17 metres, starting at 185.5 metres
  • (including 18.52% over 3.5 metres)
  • (which includes 43.5% over 0.5 metres)

  • 0.12% over 8.5 metres, starting at 205 metres

  • 2.69% over 30.5 metres, starting at 222.5 metres
  • (including 5.1% over 6 metres)
  • (and including 5.4% over 7.5 metres)

True widths were unavailable. With a dip of -88 degrees, downhole depths were close to vertical. Three other holes from R945E were released earlier in December. The zone remains open in all directions.

About 195 metres east, two other holes confirm the existence of the less-spectacular zone R1155E. The single assay released from hole PLS13-090 shows:

  • 0.09% over 12 metres, starting at 189.5 metres

Results from PLS13-103 show:

  • 0.07% over 1.5 metres, starting at 176 metres

  • 0.06% over 3.5 metres, starting at 188 metres

  • 0.06% over 1.5 metres, starting at 199.5 metres

  • 0.05% over 0.5 metres, starting at 209 metres

  • 0.06% over 0.5 metres, starting at 365.5 metres

Again, true widths weren’t provided. Both holes were vertical. The results, from a “geologic setting similar to the high-grade zones to the west, [lead to] encouragement that the mineralized system remains open to the east,” the company stated. Winter drilling will continue east of R945E and between the higher-grade zones to the west.

Just before Christmas the company released assays from one hole at zone R585E and seven from R390E. On January 9 Fission Uranium announced that president/COO/chief geologist Ross McElroy had won PDAC’s 2014 Bill Dennis Award for a Canadian discovery or prospecting success. “It takes a team to make a discovery and I’m delighted to have won this award on behalf of Fission,” the statement quoted McElroy.

Recognition also goes to Fission Uranium’s former joint venture partner. In mid-December the father/son team of Ben and Garrett Ainsworth, formerly with Fission acquisition Alpha Minerals and now with spinco Alpha Exploration TSXV:AEX, won the 2013 Colin Spence Award for excellence in global mineral exploration from the Association for Mineral Exploration British Columbia for their part in the PLS discovery.

Lakeland Resources surveys historic drilling, finds high-grade boulders and some of Athabasca Basin’s highest radon readings

Lakeland Resources’ TSXV:LK Gibbon’s Creek uranium project now shows some of the highest radon gas readings ever found in the Athabasca Basin, the company says. Data collected last year and released January 8 also confirms an historic boulder field, with assays reaching 4.28% U3O8. Additionally, a DC resistivity survey has mapped basement alteration found by historic drilling.

Lakeland Resources Gibbon's Creek exploration

Existing access trails are among the benefits of more than
$3 million of previous work at Riou Lake/Gibbon’s Creek.

The 12,771-hectare project forms part of the 35,463-hectare Riou Lake property, a joint venture in which Declan Resources TSXV:LAN may earn 70% over four years, with a first-year exploration commitment of $1.25 million.

The survey by RadonEx Exploration Management, whose proprietary technology proved vital to Fission Uranium’s PLS, found Gibbon’s Creek readings peaking at 9.93 picocuries per square metre per second (pCi/m²/s). According to a statement by Lakeland president Jonathan Armes the readings, “to our knowledge, are the highest ever reported for the Athabasca Basin area.”

The highest value coincides with a uranium-in-soil anomaly found in historic work, part of more than $3 million of exploration performed on Riou Lake prior to Lakeland’s acquisition of the northern Basin property. Nine more radon samples reached above 3.2 pCi/m²/s, while the background level showed about 1.3 pCi/m²/s.

Meanwhile assays have confirmed existence of an historically defined radioactive boulder field. Prospecting by Dahrouge Geological Consulting found a 1-by-1.2-kilometre field with eight boulders grading over 1% U3O8, one of them hitting 4.28%. Eleven other samples assayed above 0.2%, with nine more below 0.2%. Also showing were anomalous values for nickel, arsenic, lead and cobalt.

Following up on historic drilling by Cameco Corp TSX:CCO-predecessor Eldorado Nuclear, the DC resistivity survey mapped one trend that ranges from near surface to about 200 metres, roughly coinciding with historic basement alteration and mineralization at 100 metres. A second resistivity trend coincides with strong radon values.

Ranking high on the project’s to-do list is a further radon survey. This year’s field work will also try to track the high-grade boulders to their source. Gibbon’s Creek sits less than three kilometres from the settlement of Stony Rapids, with power lines and highways passing through the property.

Read more about Lakeland Resources here and here.

NexGen Energy reports three mineralized holes at Rook 1

NexGen Energy TSXV:NXE released assays on January 9 for three mineralized holes found in last summer’s 13-hole, 3,032-metre program on the Rook 1 project. The widely spaced holes tested three parallel conductors along strike of the PLS discovery 2.1 kilometres southwest. Highlights show:

Hole RK-13-03

  • 0.00137% U3O8 and 0.0204% thorium over 1 metre, starting at 150 metres in downhole depth

Hole RK-13-05

  • 0.05093% U3O8 and 0.0027% thorium over 0.5 metres, starting at 220.5 metres

  • 0.07098% U3O8 and 0.0014% thorium over 0.5 metres, starting at 221 metres

  • 0.022% U3O8 and 0.00163% thorium over 0.5 metres, starting at 221.5 metres

  • 0.027% U3O8 and 0.0024% thorium over 0.5 metres, starting at 222 metres

  • 0.03796% U3O8 and 0.0025% thorium over 0.5 metres, starting at 223.5 metres

  • 0.04834% U3O8 and 0.00268% thorium over 0.5 metres, starting at 224 metres

Hole RK-13-06

  • 0.00118% U3O8 and 0.026% thorium over 0.5 metres, starting at 152 metres

  • 0.00125% U3O8 and 0.0315% thorium over 0.5 metres, starting at 153 metres

True widths were unavailable. Assays for RK-13-05 indicate “the uranium occurs almost wholly within pitchblende/uraninite and not in complex refractory minerals,” the company added. Winter drilling, scheduled to begin this month, will follow up on RK-13-05 and also target several regional anomalies interpreted from geophysical surveys and historic drilling.

In early December NexGen announced completion of airborne radiometric and magnetic surveys. Later that month the company closed a $3.11-million private placement, with funds destined for Rook 1. Still pending are assays from a nine-hole, 3,473-metre campaign at the eastern Basin Radio project, where NexGen holds a 70% option.

UEX announces winter work for western Athabasca and Black Lake projects

Along with its JV partners, UEX Corp TSX:UEX has 2014 exploration slated for its Laurie, Mirror River and Erica projects in the western Athabasca as well as Black Lake in the northern Basin, the company stated January 7.

The western Athabasca projects consist of seven or eight sites (depending which UEX info you consult) totalling 116,137 hectares and held 49.1% by UEX and 50.9% by project operator AREVA Resources Canada. UEX funds $982,000 of this year’s $2-million budget. A 2,000-metre drill campaign begins at Laurie imminently, to be followed by another 2,000 metres at Mirror. Both projects are located around the Basin’s southwestern rim. Erica, north of the other two and west of the company’s 49.1%-owned Shea Creek project, undergoes a ground tensor magnetotelluric survey starting in March.

UEX acts as operator on the 30,381-hectare Black Lake project in the Basin’s north. This year’s 3,000-metre, $650,000 drill program will be funded by Uracan Resources TSXV:URC, which has an option to earn 60% of UEX’s 89.97% portion of the project. AREVA holds the remainder. The campaign begins in late January.

Previous UEX drilling at Black Lake in 2004, 2006 and 2007 found intervals of 0.69% U3O8 over 4.4 metres, 0.5% over 3.3 metres, 0.79% over 2.82 metres and 0.67% over 3 metres.

UEX wholly owns six Basin projects and holds JVs in another eight. Resource estimates have been compiled for Shea Creek and Hidden Bay.

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Canada’s northern gems

December 18th, 2013

Strong results continue to show NWT and Nunavut’s diamond potential

by Greg Klein

Even Antarctica might have diamonds, according to a study published December 17 by Nature. But the remoteness, not to mention a ban on mining, rules out an economically viable deposit for the foreseeable future. Put in that perspective, the opposite end of the globe looks all the more hospitable and geologically attractive. To reinforce those impressions comes recent news from diamond companies in Canada’s north.

Results released December 16 from Kennady Diamonds’ TSXV:KDI second Northwest Territories drill campaign showed an average grade of 4.56 carats per tonne from 3,454 kilograms taken from the Kelvin kimberlite. The grade fell far below last winter, in which Kelvin showed 8.13 ct/t from 987 kilos. But the results remain “outstanding,” the company boasted, and with a winter/summer combined sample grade of 5.38 ct/t they rank “amongst the highest kimberlite sample grades ever recorded.”

Out of 11,834 diamonds above 0.1 mm, combined sieve sizes for Kelvin’s winter and summer programs found 474 commercial-size stones distributed as follows:

  • 279 from 0.85 mm to 1.18 mm, 2.84 carats
  • 126 from 1.18 mm to 1.7 mm, 3.23 carats
  • 52 from 1.7 mm to 2.36 mm, 2.74 carats
  • 10 from 2.36 mm to 3.35 mm, 2.73 carats
  • 6 from 3.35 mm to 4.75 mm, 4.55 carats
  • 1 at 4.75 mm, 2.48 carats
Strong results continue to show NWT and Nunavut’s diamond potential

Five white/colourless octahedrons from Peregrine Diamonds’
Chidliak project include a 2.42-carat stone on the right.

Recoveries show approximately one commercial-size diamond for every nine kilos of kimberlite, the company added. With 16 holes along an approximately one-kilometre strike, results suggest Kelvin “hosts commercial-size diamonds across the length and breadth of the kimberlite.”

As for Kelvin’s colour and clarity, approximately 60% of the stones are white and transparent, most with no or only minor inclusions. Another 2% are yellow and transparent, again with no or minor inclusions. Most of the rest are off-white and transparent.

New year plans for the Kennady North project include ground-penetrating radar and resistivity surveys for both the Kelvin and Faraday kimberlites beginning in February. The following month should see another 10,000 metres of delineation and exploration drilling, then a 25- to 30-tonne bulk sample from Kelvin. Looking farther ahead, a summer drill campaign would lead to a maiden resource, currently scheduled for Q3 2014.

Only 10 kilometres southwest, Mountain Province Diamonds TSX:MPV and De Beers Canada hope the coming year will see construction on Gahcho Kué, their 49%/51% joint venture and most probably Canada’s next diamond mine—not to mention “the world’s largest and richest new diamond development project,” as the JV modestly puts it. Earlier this month the partners received a permit to begin site preparation in anticipation of a full land use permit and water licence.

Gahcho Kué’s looming presence raises the question of whether Kennady North might, should all go well, become a standalone or satellite operation. Mountain Province and its spinout Kennady share a number of team members including president/CEO Patrick Evans.

On December 17, one day after Kennady released its summer results, Peregrine Diamonds TSX:PGD offered a $3-million private placement to further its northern diamond projects. Two weeks earlier the Eric Friedland company released bulk sample results confirming the Chidliak project’s CH-6 pipe as “one of the highest-grade kimberlite pipes in the world.”

A 222.1 dry tonne bulk sample from the Baffin Island project graded 2.7 ct/t. Commercial-size stones above 0.85 mm weighed in at 600.5 carats. Forty-eight stones came in over one carat. Out of that 48, 16 were over two carats and three over three. Thirty-three percent of those 48 diamonds were white or colourless, 35% off-white, 13% yellow and 19% grey and brown. “The majority of stones show high transparency and high clarity with only minor inclusions or flaws present,” the company stated. “Most stones are whole and of good shape, with octahedra and lesser modified octahedra predominating.”

Peregrine maintains the sample grade outperforms any Canadian kimberlite pipes under development or advanced exploration, which so far rules out Kennady’s Kelvin. Indeed CH-6 “is surpassed only by the grades of five kimberlite pipes” in the NWT’s Lac de Gras district the company says, pointing to four at the Dominion Diamond TSX:DDC/Rio Tinto NYE:RIO Diavik mine and the Misery pipe at Dominion’s 80% Ekati operation.

Misery, slated for 2017 production, holds a probable reserve of three million tonnes grading 4 ct/t and an approximate value of $112 per carat, according to Dominion.

Peregrine’s new year plans include an evaluation of the Chidliak diamonds’ quality and an initial resource.

Among other diamond explorers treading Canada’s north is Olivut Resources TSXV:OLV, which holds the early-stage 52,600-hectare HOAM project in the NWT. North Arrow Minerals TSXV:NAR, which in November found success south of 60 with a Saskatchewan diamond discovery, has a number of northern projects including a 55% earn-in on Arctic Star Exploration’s TSXV:ADD 11,500-hectare Redemption project southwest of Ekati in the Lac de Gras region.

Read more about diamond mining and exploration in Canada.