by Greg Klein | November 28, 2016
A second and final batch of lithium assays from Hidden Lake’s summer program once again “exceeded our expectations,” 92 Resources TSXV:NTY stated November 28. The company now reports that 101 out of 223 channel samples from three pegmatites on the Northwest Territories project graded over 1% Li2O, with 59 surpassing 1.5%. Tantalum was found too, with some highlights from this batch showing:
Of 10 grab samples taken during regional prospecting, one graded 1.86% Li2O. As reported earlier this month, two more pegmatites have been found on the property, bringing the total to six so far. “With exposed strike lengths of 350 to 800 metres, the potential for significant concentrations of spodumene pegmatites remains very high,” said president/CEO Adrian Lamoureux.
Located along Highway 4, 40 kilometres east of Yellowknife, the 1,567-hectare property lies within the Yellowknife lithium pegmatite belt.
In September the company closed its acquisition of the Pontax lithium property in northern Quebec, where historic satellite imagery and government mapping have shown pegmatite outcrops.
by Greg Klein | November 25, 2016
Having poured about $23 million into Nunavut so far, Peregrine Diamonds TSX:PGD plans to spend another $15.5 million to $17 million next year on its Chidliak project, the Nunatsiaq News reported November 25. Most of the $23 million went to Iqaluit, home to an estimated 7,590 people. “It will cost between $50 and $75 million to go from here to where we need to get to,” the journal quoted president/CEO Tom Peregoodoff.
The Baffin Island project reached PEA in July, calling for a capex of $434.9 million, an amount relatively modest for an isolated operation but considerable for a territory of about 37,082 people. The company hopes to reach feasibility by H2 2019, complete permitting by the end of that year and begin construction in H2 2019. Should hopes, financing and feasibility fall into place, Peregrine might be digging diamonds by 2021.
Brothers Robert and Eric Friedland own about 25% and 21% of the company respectively.
New infrastructure would include an all-season road to Iqaluit, about 120 kilometres southwest. The government of Nunavut hopes to have an $85-million deep sea port built there by 2020.
The territory currently has two other mines in production, Agnico Eagle’s (TSX:AEM) Meadowbank gold mine about 300 kilometres west of Hudson Bay and Baffinland Iron Mines’ Mary River iron ore operation roughly 800 kilometres north of Chidliak. Baffinland trucks ore to its own port, 100 kilometres north of the mine.
Peregoodoff said the company has yet to negotiate an Inuit Impact and Benefits Agreement, but stated such a deal would probably resemble agreements signed with Northwest Territories diamond producers, the News added.
In October the paper reported Nunavut’s 14,000-member Qikiqtani Inuit Association received more than $24 million over two years from Mary River.
Should Peregrine meet its goal, Chidliak wouldn’t be Nunavut’s first diamond operation. Just across the border from the NWT’s Lac de Gras camp, Nunavut’s Jericho mine produced gems between 2006 and 2008. Shear Minerals gave up on its restart attempt in 2012, leaving taxpayers with a large part of an estimated $10.5-million clean-up bill.
Yet diamond mining transformed the NWT economy. According to figures supplied by the NWT and Nunavut Chamber of Mines, between 1996 and 2015 the industry provided over 50,000 person-years of employment, 49% northern and 24% aboriginal. By far the territory’s largest private sector industry, diamond mining created 29% of the NWT’s GDP in 2014. Direct and indirect benefits bring the number up to 40%, according to chamber data.
by Greg Klein | November 15, 2016
A new joint venture brings together Arctic Star Exploration TSXV:ADD and Margaret Lake Diamonds TSXV:DIA in the Northwest Territories’ Lac de Gras region. Finding inspiration in Kennady Diamonds’ (TSXV:KDI) success at Kennady North, the partners plan a similar approach to their newly compiled property.
By posting an approximately $200,000 bond with the NWT government, Margaret Lake has earned a 60% interest in 23 claims totalling 18,699 hectares comprising the Diagras property, the JV announced November 15. Hosting 13 known diamondiferous kimberlites, the claims were formerly part of Arctic Star’s 54,000-hectare T-Rex property.
The bond accompanies an application to extend the Diagras claims to August 2017.
“We identified the claims we wanted to joint venture based on our evaluation of historic data and we specifically focused on those claims that have known kimberlitic occurrences,” said Margaret Lake president/CEO Paul Brockington. His company will act as project operator.
The JV intends to follow Kennady’s modus operandi. The property’s Kelvin and Faraday kimberlites were dropped by De Beers and Mountain Province Diamonds TSX:MPV as they advanced Gahcho Kué, recently opened as the world’s largest new diamond mine in 13 years.
De Beers considered Kelvin and Faraday low grade, based on their lack of prominent magnetic anomalies, according to the Arctic/Margaret JV. Mountain Province then spun out Kennady to explore the pipes. That company “applied ground geophysics, gravity and Ohm mapper EM, which revealed extensions to these kimberlites that were not revealed in the magnetics,” the Diagras partners stated. “Subsequent drilling and bulk sampling has shown that these non-magnetic phases of the kimberlites have superior diamond grades to the magnetic phases and significantly increase the tonnage potential.”
Looking at some nearby deposits, the JV states that certain kimberlites at the Rio Tinto NYSE:RIO/Dominion Diamond TSX:DDC Diavik mine and the high-grade portions of Peregrine Diamonds’ (TSX:PGD) majority-held DO-27 kimberlite “are non-magnetic, proof that a magnetic-only approach in the Lac de Gras field could miss significant diamondiferous kimberlite bodies.”
The JV plans to follow Kennady’s surveying approach at Diagras. Most of the property’s kimberlites have had only one to three drill holes into their magnetic anomalies.
The partners also see potential in “two untested geophysical targets and several diamond indicator mineral anomalies that are not clearly sourced from the known pipes.” Ground geophysics are scheduled to begin next spring.
by Greg Klein
This is the second of a two-part feature. See Part 1.
The greatest staking rush the world’s likely seen, a shakeup of the global diamond industry and a tremendous boost to Northwest Territories finances—all that started with the Ekati discovery announced by Chuck Fipke 25 years ago this week. The effects on the NWT alone were momentous. The exploration sector boomed like never before, reaping four discoveries in six years that became working mines, while communities and individuals realized benefits both tangible and intangible.
Exploration fervour “certainly caused an injection into the economy,” notes Tom Hoefer, NWT and Nunavut Chamber of Mines executive director. “But where it really made a difference was when we had mines developed.”
It actually took two operations, Ekati and Diavik, to offset the territory’s 1990s economic malaise, he says. Yellowknife’s Giant and Con mines were winding down their 50 to 60 years of gold production. Around the same time, Nunavut’s 1999 separation dealt a blow to NWT revenue. “So there was a double hit on the economy. When Ekati went into production, it wasn’t enough to offset that economic downturn. It wasn’t until Diavik that the economy turned around significantly.
“It was almost palpable when Diavik got its approval. You could cut it, you could just feel it, all of a sudden people were saying, ‘Now we’re set.’ Those turned out to be world-class diamond mines, so in hindsight people were right.”
Of more than $60 billion worth of NWT mining output since 1932, gold provided 18%. It’s sometimes forgotten that the territory was a major base metals producer too, with zinc accounting for 30% of that $60-plus billion. But less than two decades of diamond production contributed 38%. The value of annual diamond production has topped $2 billion in the past “and I think we’re around $1.7 billion now,” Hoefer says. “That’s pretty significant when you consider that the NWT government’s entire budget is about the same.”
With last year’s shutdown of the Cantung tungsten operation, the territory has no mining but diamond mining. The three mines now in operation rank Lac de Gras as the world’s third-largest producer by value.
Figures from 2014 credit diamond mining with a 29% direct contribution to territorial GDP, by far the largest private sector portion. Chamber data attributes direct and indirect benefits to about 40% .
Taking another perspective, Hoefer points to a 2014 Canada-wide survey on aboriginal perceptions of the mining industry. Outside the NWT and Nunavut, favourable ratings ranged from 25% in Quebec to 45% in the Yukon. NWT responses were 55% favourable compared to 33% unfavourable, with 12% undecided. The territory ranked second only to Nunavut, which had 59/32/9 ratings.
“I would say the reason is all the aboriginal participation we’ve had in mining,” Hoefer says.
An NWT-specific survey taken this year shows overwhelming support. About 80% of respondents expressed positive feelings about the territory’s mining and exploration companies, 83% said regulation works well and 82% want more mining projects.
Those responses might partly result from the way benefits are distributed. Territorial legislation requires mining proposals to address not only environmental impacts but also positive socio-economic effects, Hoefer explains. Companies sign agreements with the government that address training, employment and local spending. The miners then file annual reports stating what they’ve accomplished.
“Put the clock back to before diamonds were discovered and the first mine built, there was maybe just a handful of aboriginal companies that could work with mining.” Now the Chamber lists over 60 NWT aboriginal companies created since Ekati began construction in 1996. They’ve shared over $5 billion of the $12 billion that diamond miners have spent in the territory.
The mines have also contributed over $100 million to communities under Impact Benefit Agreements.
And of course there are the jobs. Lac de Gras diamonds have provided over 24,000 person-years of mine employment.
That’s really in essence what I think a government would want to do with its resources—generate wealth for people who don’t have it.—Tom Hoefer,
executive director of the NWT
and Nunavut Chamber of Mines
“That’s really in essence what I think a government would want to do with its resources—generate wealth for people who don’t have it.”
Looking to the future, Lac de Gras explorers continue the quest for more deposits. Among existing miners, the Rio Tinto NYSE:RIO/Dominion Diamond TSX:DDC 60/40 JV expects Diavik to last until 2024. Plans to add a fourth deposit won’t extend the lifespan but will keep production robust until shutdown, Hoefer says.
De Beers’ technically challenged Snap Lake shut down last year, at a cost of about 750 jobs. Some of them were saved by Gahcho Kué, which last summer became the world’s largest diamond mine to open in 13 years. But despite output that’s expected to be about two and a half times greater than Snap, the open pit will employ fewer people, currently 441. The De Beers/Mountain Province Diamonds TSX:MPV 51%/49% JV sees an initial 12-year mine life, but Mountain Province talks optimistically of extensions.
Getting back to the genesis of all this economic activity, Dominion’s majority-held Ekati would have its life expectancy extended to at least 2030 should the Jay pipe addition pass feasibility and final permitting. The mine employs around 1,500 workers and accounts for about $400 million in annual spending.
Commemorating the quarter-century since Ekati’s discovery, the NWT and Nunavut Chamber of Mines presents a Diamond Gala on November 17, the final evening of this year’s Geoscience Forum. Hoefer says the event will be a three-part celebration recognizing the discovery, the subsequent construction and operation of four mines, and the support of aboriginal governments. Fipke will be on hand as guest speaker, perhaps marvelling at the transformation brought about by his pursuit of Lac de Gras glitter.
This is the second of a two-part feature. See Part 1.
by Greg Klein | November 8, 2016
The first batch of assays from initial channel sampling on the Hidden Lake lithium project “exceeded our expectations,” 92 Resources TSXV:NTY reported November 8. The summer program focused on the LU D12 pegmatite, as well as three newly discovered pegmatites on the property 40 kilometres east of Yellowknife.
Of 85 samples from 15 channels, 52 graded more than 1% Li2O, including 34 that surpassed 1.5%. The best result showed 1.53% Li2O and 64 ppm Ta2O5 over 11.58 metres, including 1.9% Li2O and 52 ppm Ta2O5 over 9.02 metres.
Tantalum averaged 88 ppm, peaking at 596 ppm. Tantalum grades will be verified through an additional analytical technique, the company added.
Sampling targeted LU D12 over an intermittent strike of about 275 metres. Still to come are assays for another 223 samples, which include the HL1, HL3 and HL4 pegmatites, “where spodumene has been visually identified,” the company stated. 92 Resources also reported finding at least two new pegmatites south of LU D12.
The company has permitting underway for a winter 2017 drill program. The 1,567-hectare Hidden Lake sits within the Yellowknife lithium pegmatite belt along Highway 4.
Although Hidden Lake remains the company’s flagship, in September 92 Resources closed the acquisition of Quebec’s Pontax lithium property, where historic satellite imagery and government mapping have shown pegmatite outcrops.
by Greg Klein
This is the first of a two-part feature. See Part 2.
“You know, there’s something fishy going on around Lac de Gras.”
Tom Hoefer remembers hearing that from a local mining guy who dropped by his Yellowknife office one autumn day in 1991. “At the time nobody really cared about Lac de Gras because that was granite country,” Hoefer explains. But a visit to the mining recorder’s office showed someone staked “a huge block of ground, abnormally large. Doubly suspicious, I think it was registered to Norm’s Manufacturing or Norm’s Mattress Company or something. It was so bizarre. Someone was hiding something.”
Hoefer’s friend offered an explanation. “The only thing I think this could be for is diamonds.” He had previous experience with Monopros, De Beers’ Canadian exploration company. He was also an habitué of the Miner’s Mess, a YK cafe where industry rumours circulated as thickly as the cigarette smoke.
The buzz was confirmed on a date variously given as November 6 or 7, 1991. That’s when the secretive Chuck Fipke stopped pretending to be a gold explorer and faxed a Dia Met news release reporting Northwest Territories diamond recovery, some of it gem quality. It was the first significant find in Canadian history.
“Of course it just went crazy,” recounts Hoefer, now executive director of the NWT and Nunavut Chamber of Mines. “We saw the entire Slave province staked in around two years.”
That may well be the biggest staking rush the world’s seen. As crews fanned out across northern and not-so-northern Canada, suppliers couldn’t provide claim posts fast enough. Helicopters couldn’t keep up with demand. Work continued through the winter, despite hostile weather, despite darkness that restricted flying time to six hours or less.
“It just kept getting bigger and bigger,” Hoefer says. But for many people it couldn’t have happened at a better time.
“The junior exploration sector was just about dead,” he recalls. “I think the juniors saw the news as a life preserver. Whether it was real or not, something was going on and they wanted to grab onto it. I think people scraped money from wherever they could, whether they mortgaged houses or borrowed, just to get into this play. They were on their last legs anyway—if you’re going to go down, you might as well go down in flames.”
Competition was all but cutthroat, as recounted in books like Treasure Under the Tundra by L.D. Cross and Matthew Hart’s Diamond: The History of a Cold-Blooded Love Affair. Readers learn of stakers wearing camouflage clothing to evade detection by rivals, of efforts to foil geophysical espionage from enemy aircraft, and of a diplomatic incident provoked by Thor, Eira Thomas’ supposed bodyguard, said to be 50% dog, 50% wolf and 100% chickenshit.
Staking wasn’t all that went crazy. Once a penny stock, Dia Met passed $8 less than three months after the announcement, according to Hart. In other examples, he noted that pre-discovery Aber Resources shot from 25 cents to $1.35, and later to $2.34. An ex-Dia Met employee started SouthernEra Resources at a penny a share. Within months the company hit $1.90. Speculative fever eventually cooled off but, as Aber approached discovery at Diavik in late 1994, its shares shot from $4 to $6 in one day.
Ekati and Diavik, of course, went on to become NWT diamond mines, joined later by De Beers’ Snap Lake. But as the territory’s other mines closed due to depletion or commodity prices, and Snap shut due to technical challenges, Gahcho Kué began operations. That continues Lac de Gras’ status as the world’s third-largest supplier of diamonds by value.
Fipke and Ekati co-discoverer Stewart Blusson succeeded where De Beers had thus far failed. They also helped bring down the giant’s near-monopoly. Dia Met partner BHP, like Aber partner Rio Tinto, couldn’t be intimidated by De Beers, then a company with a reputation for muscling in on much smaller diamond hopefuls. Lac de Gras hastened a process that began when a Rio predecessor started mining diamonds at Western Australia’s Argyle in the early 1980s. De Beers went from controlling about 80% of global rough in the early 1990s to 34% in 2015.
Hart suggested an additional factor to the giant’s decline. The rush “happened in Canada, where the mineral exploration scene is dominated by a host of small, unruly companies, called ‘juniors’…. The idea of yoking such a promoter-driven and combative group to some larger purpose, such as commodity price control, would be laughable.”
Lac de Gras also helped restore confidence in the ethical standards of gems. Holding among the world’s highest environmental and corporate social responsibility standards, Canada guaranteed consumers a source of conflict-free stones. Canadians played a strong role in launching the Kimberley Process, an organization that guards the global diamond market from illicit supply, Hoefer says.
Here at home, diamond miners emphasize community engagement, community responsibility and community benefits, he adds. Lac de Gras mines constitute the NWT’s largest private sector employer, creating 29% of the territory’s GDP. Indirect benefits bring that up to about 40%, according to the Chamber’s data.
“If you look back at where we’ve come from and what we’ve achieved, it really is a cause to celebrate,” he emphasizes. “Now we’re looking forward to the next 25 years. It doesn’t come without challenges, so we have to ask what we can do to have another strong 25 years.”
This is the first of a two-part feature. See Part 2.
by Greg Klein | October 20, 2016
Following up on channel samples announced last month, Equitorial Exploration TSXV:EXX released three specimen samples from its Li lithium project in the Northwest Territories on October 20. The samples come from the property’s lithium-cesium-tantalum pegmatite dyke swarms, showing:
The dyke swarms have been traced over a combined length of 13 kilometres on mountainous terrain, the company noted. Sampled portions of the swarms are up to 52.6 metres wide, with each swarm containing multiple dykes ranging from 0.2 to 10 metres’ width.
The company’s now acquiring satellite images to help map the dyke swarms and create a 3D model. Plans for next spring include retrieving 2007 core for re-logging and reprocessing. The following summer Equitorial anticipates a program of drilling, channel sampling, mapping and prospecting.
Hosting the Little Nahanni pegmatite group, the Li property sits 30 kilometres from the former Cantung mine, in the southern NWT just east of the Yukon border.
by Greg Klein | October 19, 2016
The event marked the “culmination of approximately 20 years of work to bring the Renard project from a greenfield exploration concept to a fully operating new diamond mine,” pointed out Stornoway Diamond TSX:SWY president/CEO Matt Manson. Quebec’s first diamond mine, and Canada’s second to celebrate a grand opening in less than two months, Renard remains on schedule for commercial production by year-end.
Among staff, stakeholders and community reps in attendance were Pierre Arcand, Quebec’s Minister of Energy and Natural Resources, and Chief Richard Shecapio of the Cree Nation of Mistissini.
The 20-year project opened well ahead of schedule, having beat its target dates several times. Plant commissioning began in June, eight weeks ahead of a revised schedule that was already five months ahead of a previously projected timeline. Ore processing began in July and went through 91,010 tonnes by September 30, producing 111,556 carats, averaging 123 carats per hundred tonnes. Twenty-one stones surpassed 10.8 carats.
The first sale of Renard diamonds begins in Antwerp on November 14, two months earlier than anticipated.
Renard’s expected to average 1.6 million carats annually for an initial 14 years. The first decade should do even better, with an annual average of 1.8 million carats selling at an average $155 per carat.
Stornoway sees a potentially longer mine life. In addition to a probable reserve of 22.3 million carats, Renard has another 7.9 million carats of indicated resources and 13.35 million carats inferred, with all kimberlites open at depth. The company expects to move from open pit to underground in 2018.
Canada’s only diamond mine accessible by all-season road, the James Bay region operation is fuelled by LNG.
The company has also been drilling kimberlites at its Adamantin project about 100 kilometres south, but so far without success.
Another grand opening last month celebrated the world’s largest new diamond mine in 13 years, the Northwest Territories’ Gahcho Kué. A 51%/49% JV of De Beers and Mountain Province Diamonds TSX:MPV, the fly-in/fly-out operation’s expected to produce 54 million carats over a 12-year life, with average prices estimated at $150 per carat.
by Greg Klein | September 21, 2016
Liquefied natural gas would be the fuel of choice to electrify two potential northern mines, according to a memorandum of understanding announced September 21. Casino Mining and Selwyn Chihong Mining said the proposed deal with Ferus Natural Gas Fuels would cut costs as well as CO2 emissions.
Through its subsidiary, Western Copper and Gold TSX:WRN has the Casino gold-copper-molybdenum project undergoing environmental assessment. Selwyn Chihong’s Selwyn zinc-lead project currently moves towards pre-feasibility.
The plan would have Ferus build an LNG plant at Fort Nelson, in northeastern British Columbia’s Peace River oil and gas region. Ferus built and operates Canada’s first merchant LNG plant in northwestern Alberta. A related company, Eagle LNG Partners, has an LNG plant under construction in Florida. Ferus stated it provides LNG and compressed natural gas fuelling services including liquefaction, compression, storage and delivery to the oil and gas, mining, marine, rail and power generation sectors.
The plan “may also benefit neighbouring mines, industries and communities currently powered by diesel, by making the LNG more broadly available,” commented Ferus president/CEO Dick Brown.
“Neighbouring” might cover a lot of ground. Casino’s located in west-central Yukon. Selwyn straddles the Yukon/Northwest Territories border.
But for the time being the Coffee gold project, Yukon’s likeliest new mine and located only about 30 kilometres northwest of Casino, sticks to a diesel-fuelled plan. Low diesel costs ruled out “the additional $1.5-million capital expense associated with LNG storage and vaporization,” according to last January’s feasibility study. “If in the future diesel fuel costs increase, significant power generation cost savings may be realized by substituting LNG for diesel.”
Goldcorp TSX:G subsidiary Kaminak Gold hopes to begin Coffee construction in mid-2018.
Backers of the Fort Nelson proposal anticipate two phases of development to be commissioned in 2020 and 2022.