Thursday 21st June 2018

Resource Clips


Posts tagged ‘Rio Tinto PLC ADS (RIO)’

Update: Belmont Resources permitted for July drilling on Nevada lithium property

June 20th, 2018

by Greg Klein | Updated June 20, 2018

With permits now in hand, Belmont Resources TSXV:BEA expects to activate a rig on its Kibby Basin lithium project next month. Once completed, the boreholes may be converted to exploration wells to test for lithium brine aquifers.

Located 65 kilometres north of Nevada’s Clayton Valley, the 2,760-hectare property underwent deep-sensing magnetotelluric geophysics earlier this year, finding a conductive zone that starts at about 500 metres in depth. The program followed last year’s initial drill campaign that sunk two holes totalling 624 metres. Core samples graded between 70 ppm and 200 ppm Li2O, with 13 of 25 samples surpassing 100 ppm.

Preparations move Belmont Resources toward Nevada lithium drilling

This year’s magnetotelluric geophysical program helped identify
drill targets for Belmont Resources’ Kibby Basin lithium project.

The company has described the upcoming program as “work of a significant scope” that includes water well installation and monitoring.

In May Belmont announced the appointment of Ian Graham to the company’s advisory board. A former principal geologist with De Beers’ South African division, he also spent 15 years with Rio Tinto NYSE:RIO where he took part in evaluation and pre-development projects including the Diavik diamond mine in the Northwest Territories and the Resolution copper deposit in Arizona. He also oversaw permitting for the Eagle nickel mine in Michigan and played a key role in the initial economic assessment for the Bunder diamond project in India. More recently Graham served as CEO of United Energy Corp, which held a Nevada lithium project.

Belmont also holds the Mid-Corner/Johnson Croft property in New Brunswick, where historic, non-43-101 sampling has shown zinc, copper and cobalt potential. In Saskatchewan the company shares a 50/50 interest with International Montoro Resources TSXV:IMT in the Crackingstone and Orbit Lake uranium properties.

Belmont closed the final tranche of a private placement totalling $198,000 in April.

Read Isabel Belger’s interview with Belmont CFO/director Gary Musil.

Margaret Lake Diamonds tackles two NWT projects with geophysics and drilling

May 30th, 2018

by Greg Klein | May 30, 2018

As work resumes at Diagras, Margaret Lake Diamonds TSXV:DIA now returns to a second front in its search for Northwest Territories gems. On May 30 the company announced a new geophysics program had begun at Diagras, coinciding with a drill campaign that started earlier this month at the company’s Margaret Lake project.

Margaret Lake Diamonds tackles two NWT projects with geophysics and drilling

The Diagras agenda calls for ground gravity, magnetic and EM surveys around known kimberlites, as well as around potential kimberlites suggested by earlier geophysics.

The strategy will employ techniques that weren’t used when De Beers explored the area but have since proven successful elsewhere. Some examples include two other Lac de Gras-region projects, Mountain Province Diamonds’ (TSX:MPVD) Kennady North and Peregrine Diamonds’ (TSX:PGD) Tli-Kwi-Cho DO-27/DO-18 kimberlite complex, Margaret Lake stated.

The company holds a majority interest and acts as operator on the 18,699-hectare Diagras property in a 60/40 joint venture with Arctic Star Exploration TSXV:ADD. The project sits 35 kilometres from Canada’s largest diamond producer, the Diavik mine of Rio Tinto NYSE:RIO and Dominion Diamond Mines.

Margaret Lake’s 100%-held, 23,199-hectare Margaret Lake property lies nine kilometres north of the De Beers/Mountain Province Gahcho Kué diamond mine and two kilometres from Mountain Province’s Kelvin and Faraday deposits.

Last year’s Diagras work found “gravity and EM anomalies proximal to known magnetic kimberlites that constitute compelling drill targets,” Margaret Lake stated. Among areas of special interest is Jack Pine, one of the largest kimberlite complexes in Lac de Gras. Previous drilling has revealed diamonds, while an area of further kimberlite potential has yet to be drilled.

Additionally, gravity anomalies near the property’s Black Spruce kimberlite show similarities to other kimberlites in the region.

Meanwhile Margaret Lake has a rig testing six kimberlite targets on the company’s namesake property. Each target shows a gravity low, bedrock conductor or both. The company interprets those characteristics as potentially representing kimberlite.

Last month Margaret Lake closed a $495,500 first tranche of a private placement offered up to $2.2 million.

Read more about Margaret Lake Diamonds.

Preparations move Belmont Resources toward Nevada lithium drilling

May 23rd, 2018

This story has been updated and moved here.

Pistol Bay Mining begins drilling its expanded zinc-copper-polymetallic Ontario VMS project

March 22nd, 2018

by Greg Klein | March 22, 2018

With about 3,500 metres planned, Pistol Bay Mining TSXV:PST has drilling now underway at northwestern Ontario’s VMS-rich Confederation Lake greenstone belt. Three holes of about 500 metres each will supply material from the project’s Arrow zone for preliminary metallurgical tests. From there the rig shifts roughly eight kilometres west to the Fredart zone, aka the Copperlode A zone.

Pistol Bay Mining resumes drilling at its expanded zinc-polymetallic Ontario VMS project

Last year the company released a 43-101 resource for Arrow that used a base case 3% zinc-equivalent cutoff for an inferred category showing:

  • 2.1 million tonnes averaging 5.78% zinc, 0.72% copper,19.5 g/t silver and 0.6 g/t gold, for a zinc-equivalent grade of 8.42%

Contained amounts come to:

  • 274 million pounds zinc, 34.3 million pounds copper, 1.33 million ounces silver and 41,000 ounces gold

Obviously overdue for renewed attention is Fredart. The zone has conflicting historic, non-43-101 estimates of 386,000 tonnes averaging 1.56% copper and 33.6 g/t silver, or 219,500 tonnes averaging 1.95% copper and 41.8 g/t silver.

A January option agreement expands Pistol Bay’s Confederation Lake package by 3,700 hectares, for a total of about 20,700 hectares. The new turf comprises part of last year’s VTEM-Plus survey, the area’s first state-of-the-art regional geophysics. Some of the available, non-43-101 past intercepts from the acquisition’s Wasp Lake trend include 2.96% zinc and 0.04% copper over 2.79 metres, as well as 1.12% zinc and 0.04% copper over 7.19 metres. The same trend showed a strong conductive response on the VTEM-Plus results, Pistol Bay reported.

Another positive geophysical response came from the acquisition’s Fly Lake zone, where historic, non-43-101 assays reached as high as 1.36% zinc and 0.17% copper over 11.5 metres, along with 1.51% zinc and 0.08% copper over 8.9 metres. The zone appears to remain open along strike and at depth, the company stated. Nine other geophysical anomalies, meanwhile, appear to lack previous drilling.

The January option follows 5,860 hectares of staking last September that covers multiple conductors and IP anomalies identified in the airborne survey, as well as parallel conductors or extensions of known conductors.

Last month the company announced an amended agreement with a Rio Tinto NYSE:RIO subsidiary which will increase its hold on the C4, C5 and C6 uranium properties in Saskatchewan from 75% to 100%. The deal will bring Pistol Bay $1 million.

In January the company also announced progress with its PB Blockchain subsidiary as it builds “a suite of blockchain products to address needs that are particular to the data management and security of mining/oil and gas companies.”

Read more about Pistol Bay Mining here and here.

At a regulatory crossroads

October 4th, 2017

It’s time to fix federally induced problems, says the Mining Association of Canada

by Greg Klein

The fundamentals behind the last supercycle remain in place, insists Pierre Gratton. Yet the Mining Association of Canada president/CEO warns that the country has lost ground as a global industry leader. While the current upswing continues, the transition to a cleaner, lower-carbon future will call for even more mineable commodities. Whether Canada participates to its fullest potential, however, depends largely on policies directed by Ottawa.

Addressing a 230-strong Greater Vancouver Board of Trade audience on September 27, Gratton noted that by 2015 Canada lost its first-place spot for exploration investment. The usurper was Australia, which proved itself “much more strategic and successful over the past decade.” Meanwhile this country’s list of active projects has fallen to nearly half its 2011 peak of 2,700. Only two new projects came up for federal environmental assessment in 2016, an historic low. “We’ve got world class deposits sitting idle,” he added, citing Ontario’s Ring of Fire, Nunavut’s Izok Corridor and British Columbia’s New Prosperity.

It’s time to fix federally induced problems, says the Mining Association of Canada

Pierre Gratton: “Hopefully we’ll get it right this time, we’ll lock
it in, we’ll know what the rules are and get down to business.”
(Photo: Matt Borck, courtesy Greater Vancouver Board of Trade.)

Yet opportunities have been improving, he maintained, and not just because of stronger commodity prices. In addition to continued growth among emerging economies, carbon-reducing measures call for new technologies that require more mining products. That’s the case for electrified transportation, wind and solar generation, and energy storage.

“The transition to a low-carbon future is not years away from now—it has already started and it’s accelerating at a rapid pace.” Unless Canada turns that to its competitive advantage, “we will lose this opportunity to other countries… It’s going to be us, Australia or someone else.”

Moreover, Canada can produce these commodities “as a leader in sustainability.” This country “already operates some of the lowest-emitting, highest-tech and most socially responsible mines in the world.” Gratton credited companies that implemented MAC’s Towards Sustainable Mining program with reducing greenhouse gas emissions. And altruism can be rewarding: “Our Canadian-made mining standard has caught the attention of Apple and other global companies that see it as a program robust enough to demonstrate responsible sourcing.”

But if environmental progress bodes well for Canadian mining, the policy environment remains uncertain. The 2012 regulatory reforms of the previous Conservative government lost both public and investor confidence, Gratton argued.

Ottawa now needs to put “the principle of one project/one review squarely into action. We need a federal process that no longer places an unfair and unequal burden on Canada’s mining sector alone, which has sadly been the case since 2012.”

For a couple of these pieces, like the Fisheries Act and the Navigation Protection Act, I think the mining industry is probably going to come out fine. The Environmental Assessment Act, I don’t know.

The Liberals, he said, are “committed to review and replace all of the federal reforms of the previous Harper government…. For a couple of these pieces, like the Fisheries Act and the Navigation Protection Act, I think the mining industry is probably going to come out fine. The Environmental Assessment Act, I don’t know. At this point it is still so much in flux it is hard to know exactly where this will land.”

Six years of regulatory uncertainty with the prospect of more to come contributes to “this question mark in Canada. And hopefully we’ll get it right this time, we’ll lock it in, we’ll know what the rules are and get down to business.”

Returning to climate change, Gratton noted some industry initiatives, including wind energy reducing diesel dependency at Diavik and Raglan, and the transformation of B.C.’s former Sullivan mine into a community-owned solar plant that sells electricity to the grid. Goldcorp’s (TSX:G) Borden project, anticipated for 2019 production, would be Canada’s first all-electric underground mine.

Not only would the battery-powered fleet cut emissions, it “will significantly reduce ventilation costs,” Gratton stated.

“But we need to do more to spur innovation.” MAC proposes government support for innovation superclusters, a possible “catalyst to achieve transformative outcomes for our industry and help re-establish Canada as a global leader for mining innovation.”

Northern infrastructure, bringing both roads and electricity to isolated areas, again complements both the industry and the environment. Gratton pointed to the Northwest Territories’ planned $150-million all-season road to the Tlicho community, and the federal/Yukon $360-million road that would access the Coffee and Casino projects, two potential mines that would “contribute billions in new investment … and thousands of direct and indirect jobs.”

With federal funding available for green infrastructure, here’s an opportunity to take more communities off diesel, fully open up B.C.’s Golden Triangle and deliver to Yukon and the projects up there reliable, clean energy.

Referring to the 344-kilometre extension of B.C.’s Northwest Transmission Line in 2014, Gratton said: “I’ve a pitch for you today. Why not finish the job and take that line all the way to the Yukon? With federal funding available for green infrastructure, here’s an opportunity to take more communities off diesel, fully open up B.C.’s Golden Triangle and deliver to Yukon and the projects up there reliable, clean energy.”

Undiscouraged by the rugged 800-kilometre gap between the provincial and territorial grids, he added, “I was meeting recently with Yukon officials and they’re very interested in this. I remember also that Premier Horgan, when he was Energy and Mines critic, was a big champion of this project too. So here’s a nation-building project that maybe he can get behind.”

“I could talk about many other things as well, but the key takeaway is that we need to reposition Canada and enhance our competiveness going forward. And it’s critical because other countries are doing the same.”

But in response to an audience question about native consent, was he optimistic or euphemistic? “We’re not in a world of veto,” Gratton insisted. “We’re in a world of deep and meaningful engagement.”

Speaking with ResourceClips.com, he said MAC’s supercluster proposal could create regional centres for excellence focusing on mining and exploration in Sudbury and Vancouver, processing in Quebec City and oil sands in Edmonton.

There are some issues where we’ve made real progress with this new government that we hadn’t been able to make under the previous government.

Although it’s too early to evaluate the Liberals’ performance, the former Chretien-era government communications guy did say, “There are some issues where we’ve made real progress with this new government that we hadn’t been able to make under the previous government.”

Environmental permitting delays, he pointed out, “have been horrendous. At times it takes five years after an environmental assessment before you get your permit. The previous government announced a policy that would shorten that to eight months but didn’t do anything to implement it. This government has actually put in place the tools to make it happen. So we are seeing those timelines shrink.”

Additionally Ottawa now consults with MAC much more than did the previous government. The Conservatives’ lack of dialogue, he stated, “could be why they got things wrong.”

Confederation Lake in focus

October 2nd, 2017

Regional geophysics bring expansion and JV potential to Pistol Bay’s quest for Ontario VMS zinc-copper

by Isabel Belger

Isabel Belger

Isabel Belger

Isabel: I would like to introduce the president and CEO of Pistol Bay Mining [TSXV:PST] Charles Desjardins. I am very glad you could find the time. Charles, tell us something about your background and how you got started in the mineral exploration industry.

Charles: I started in Vancouver as a stockbroker in the 1980s. Then you could say I got lured into the venture capital space, at that time the Vancouver stock exchange. The first thing that I worked on was actually a technology deal. Since then I have worked in a lot of different sectors: tech, biotech, oil and gas, diamonds, mining, etc.

This was a natural transition—I started more as a promoter and then I just became more hands-on because I wanted to get things done the way that I wanted to do them.

Isabel: How did you get involved with Pistol Bay?

Charles: Pistol Bay was actually in the Dave Hodge camp before as Solitaire Minerals and it came from somebody that kind of gave up. I wanted to take it over and one of the first things I acquired were the C3, C4, C5 and C6 uranium properties in Saskatchewan, which we are selling now to Rio Tinto [NYSE:RIO].

I got an e-mail from them last night. Basically I asked them if they were planning to pay the $1.5 million this year and they said probably. If they don’t pay it this year, then they’ll have to pay $2 million next year. It’s most likely that they will pay in 2017.

Isabel: Your principal properties are located in the Confederation Lake VMS greenstone belt in Ontario. Can you give me a little overview of what you have there and what makes your projects valuable?

Charles: Confederation Lake has been explored to some extent since the 1950s with only one producing mine, the South Bay mine. There are about nine historic occurrences there that we control.

Regional geophysics bring expansion and JV potential to Pistol Bay’s quest for Ontario VMS copper-zinc

The technology of exploration and mining has changed a lot just since 2000. I was recently in Toronto and I met the geophysicist who used to handle the area for Noranda. A lot of this ground was Noranda. Up until 2000 they couldn’t see anything beyond 200 metres in depth. Originally my plan two years ago was to tie up zinc and copper properties focusing on zinc. At that time zinc was at 62 cents per pound, now it is more like $1.40. Let’s call it prescience—I was able to tie up most of the belt, which is over 50 kilometres long and about 28 kilometres wide. The whole goal was to explore the belt using modern exploration methods, mostly with a deep-penetrating airborne study. Pistol Bay has just completed that.

I would also like to mention that there are about 800 historic drill holes in this belt and we have data on 600 of them. And we have access to a big geochemical study that was done, probably worth about $500,000 or even $600,000, that was never really followed up on or plotted in to any degree. That is very valuable because it went through all alteration zones and all the occurrences. Recently we did the airborne survey, as I have mentioned. I doubled the size of the survey area, ending up being about 2,100 line-kilometres. What that does, and what it has shown us, is that there are two trends in this belt. The first trend has stronger copper and zinc numbers and the lower trend is more zinc-dominated. The conductors we found are actually deeper in places. They have not been followed up before…. Keeping that in mind we have also staked another 14,500 acres [about 5,860 hectares] of conductors and IP anomalies. So there is a lot to follow up on.

Isabel: What is the plan for the rest of 2017 and where do you see more excitement?

We are talking right now to four companies about joint-venturing this. We don’t really have the capital to pay for our own drill program unless Rio Tinto writes us that cheque. I don’t want to dilute at this moment. I’d rather wait for the cheque if I have to or enter in joint ventures.—Charles Desjardins

Charles: We are talking right now to four companies about joint-venturing this. We don’t really have the capital to pay for our own drill program unless Rio Tinto writes us that cheque. I don’t want to dilute at this moment. I’d rather wait for the cheque if I have to or enter in joint ventures. I can say that we are permitting right now for drilling, but it might be a joint venture partner drilling. In the worst-case scenario we would drill in the first quarter of next year.

But I am pretty sure that Rio Tinto will write the cheque.

Isabel: You have a 5% NPI royalty on the Rio Tinto project, is that correct?

Charles: Yes, we have a 5% net profit interest after they paid the $1.5 million. I am rather confident that at some point they will come and try to buy that. If it is something that they think they are going to take to production—of course it is not even close to that—they would never leave us with 5% NPI.

Isabel: You said that you won’t be able to do a drill program yourself right now. How much money do you have in the bank right now?

Charles: A couple of hundred thousand.

Isabel: How much of Pistol Bay is held by the management?

Charles: Management, friends and family own about 35%.

Isabel: That is quite a bit. Interesting. Let’s talk a bit about zinc and copper. Recently a lot of articles were published on copper. It was Robert Friedland who recently noted that about 150 kilograms of copper is required for each electric vehicle manufactured, whereas people talk mostly about lithium and cobalt and EVs, but not so much about the increasing demand for copper. But I think many people are aware of rising copper prices and what copper is used for, being an interesting commodity in this “rechargeable” era. But maybe not everyone is as well-informed about zinc and what it is used for. Can you say a bit about the usage of zinc and also the zinc market?

Charles: One of the reasons that I got into zinc was that I was looking at all the commodities at a time when the resource market was quite depressed. I was looking for something that looked promising for a commodity shock. The zinc market is working in a production deficit. The prices have more than doubled, I wouldn’t call that a commodity shock, but it has gone well. And the fact that we hadn’t had that jump is probably the length of the bull zinc market.

About its usage, more than half of all zinc that is mined is used for galvanizing other metals, such as steel and iron. And significant amounts of zinc are also used to form alloys with other metals.

Isabel: What do you like most about your job?

Charles: I always like this kind of work. It is risky and can be stressful at times, but it doesn’t mean sitting behind a desk. I was up at the property in Ontario earlier this summer seeing first hand what everything looks like. How much infrastructure there is, which I was certainly quite surprised about, roads and even power lines as well. I love the variety that the job offers.

Isabel: What is your favourite commodity beside the ones in your company?

Charles: Probably gold though we do have some gold in our Confederation Lake. To me, in a world right now with the geopolitics that we are facing it is kind of a must-have. You have to have some gold.

Isabel: Thank you so much for the insights.

Charles: Thanks for having me, Isabel.

Isabel Belger

Charles Desjardins, president/CEO
of Pistol Bay Mining

Bio

Mr. Desjardins brings more than 25 years of experience in public company finance and management. He is president and CEO of Tandem Capital Group Inc, which was active in the investor relations field during the mid 1980s. Mr. Desjardins was also past president of numerous public mineral exploration and technology companies which traded on the TSXV.

Fun facts

My hobbies: Running marathons, biking, fishing
My favourite airport: JFK
My favourite tradeshow: Mines and Money Hong Kong, PDAC
My favourite commodities: Copper, zinc and gold
With this person I would like to have dinner: Elon Musk
If I could have a superpower, it would be: Extraordinary vision

Read more about Pistol Bay Mining here and here.

Pomp and plunder

September 23rd, 2017

Indians increasingly dominate diamonds, but their most fabled stone remains elusive

by Greg Klein

Maybe it’s fitting that Indians, said to be the first to truly appreciate the gems, have returned to such prominence in the global diamond trade. The country’s alluvial finds constituted the world’s main source until supplanted by Brazil in the early 18th century. Although Indians originally held rubies and emeralds in even higher esteem, their admiration for diamonds spread to neighbouring cultures and beyond. The story of the Koh-i-Noor shows how one stone came to be associated not only with beauty, majesty and mystery but, more recently, with controversy too.

Indians increasingly dominate diamonds, but their most fabled stone eludes them

By no means the largest diamond ever found, it’s nevertheless been credited with good luck and blamed for misfortune. Some viewers found it dazzling for its brilliance, others were disappointed by its dimness. But it passed through a number of empires, often amid horrific bloodshed, before ending up in Britain’s Crown Jewels. Authors William Dalrymple and Anita Anand recount the rock’s odyssey in their recently published Koh-i-Noor: The History of the World’s Most Infamous Diamond.

While revelling in the myths, legends, propaganda and guesswork associated with the stone, the writers try to set the historical record straight with previously untranslated documents and new gemmological research that reconstructs the Koh-i-Noor as a rough stone.

Ancient accounts refer to a number of large Indian diamonds which could include the Koh-i-Noor. Some were bigger and believed to transmit supernatural power, but the Koh-i-Noor eventually prevailed as the most renowned. Even so, the first definite written reference doesn’t come until the mid-18th century, referring back to northern India’s 17th-century Mughal emperor Shah Jahan.

Such was his captivation for precious stones that they all but monopolized his attention at a banquet featuring a dozen dancing girls of “lascivious and suggestive dress, immodest behaviour and posturing.” In 1635 he made the Koh-i-Noor the centrepiece of his Peacock Throne. An especially lavish piece of furniture meant to evoke the Koranic Solomon’s throne, it cost twice as much to build as the Taj Mahal.

Indians increasingly dominate diamonds, but their most fabled stone eludes them

The Queen Mother’s crown features the Koh-i-Noor
within a Maltese cross between two fleurs-de-lys.

Eventually the Mughals dismantled their seat of ostentation and the Koh-i-Noor became in turn a symbol of power for Persians, the Durrani Empire of Afghanistan and the Sikh empire, as each looting victor became a looted victim. Finally an 1849 treaty ending the Second Anglo-Sikh War ordered a terrified 10-year-old Maharajah Duleep Singh to surrender the celebrated stone to Queen Victoria.

Surviving a perilous voyage, the rock went on display to widespread public anticipation at the 1851 Crystal Palace Great Exhibition. It bombed.

Prince Albert tried to enhance the stone’s effect with gas lamps and angled mirrors. That fizzled too, as the props “turned the display into a sauna, causing visitors to swoon after only a few minutes. The press began to blame the Koh-i-Noor for being difficult, as if it were some kind of contrary and disappointing child.”

Albert then summoned experts who agreed that the diamond “was flawed at its very heart. Yellow flecks ran through a plane at its centre, one of which was large and marred its ability to refract light.” The authorities disagreed, however, on whether the gem could be re-cut without wrecking it. Eventually two of the world’s top pros arrived from Amsterdam and set to work with a state-of-the-art steam-powered grinder in a specially designed shop.

Their bill, for a few months of work, amounted to over a million pounds in today’s terms. Despite assurances to the contrary, moreover, they savaged the stone’s size from 190.3 carats to 93 carats. But dazzle it did. With an unusual symmetry of 33 facets each above and below the gem’s “table,” the cutters redeemed both the stone’s beauty and its public image.

Indians increasingly dominate diamonds, but their most fabled stone eludes them

It helped Victoria dazzle too, in those years before she went into morbid mourning. Waltzing with Napoleon III before 1,200 guests at Versailles, she wore a white satin gown and a diadem adorned with almost 3,000 small diamonds. Among them, the great K “gleamed like a third eye.” Other royal figures ordered it mounted and re-mounted on various regalia until the Queen Mother had it placed in its current crown. She sported the headgear at her daughter’s coronation. But for some reason (maybe trepidation about its supposed curse, the authors suggest), Elizabeth II has never worn it.

Since then, calls for its return have come from competitors, among them India, Pakistan and even the Taliban.

“Others have suggested that it be cut up once again and a piece each given to all those countries that make a credible argument for its return—including modern-day Iran and Afghanistan. But it is most unlikely that such Solomonic wisdom would ever be entertained by the British, nor indeed would it satisfy any of the various parties involved.”

The most persistent calls come from Indians. Equally tenacious has been Britain in its refusals. On a 2010 visit to Punjab, the authors relate, then-PM David Cameron said, “If you say yes to one you suddenly find the British Museum would be empty.”

Yet the country where the great diamond first came to prominence returned to diamond prominence itself late last century. Ironically that happened not due to gems of magnificence but through smaller, lower-quality stones originating in other countries and disdained by the rest of the trade. Through such humble beginnings, the west coast city of Surat now handles more than 80%, or even 90%, of the world’s cutting and polishing work. Mumbai, 290 kilometres south, hosts the world’s biggest diamond bourse. In the world diamond-sorting capital of Antwerp, Indians conduct about three-quarters of the business.

As for rough supply, Rio Tinto NYSE:RIO walked out on the country’s best hope for a major diamond mine in February, when the company handed ownership of the Bunder deposit, once anticipated for 2019 production, to the state government of Madhya Pradesh.

Meanwhile the Dalrymple/Anand book has reportedly spawned renewed activity in the search for India’s alluvial diamonds, maybe even another Koh-i-Noor, with all its blessings and curses.

Finland’s Arctic welcome

August 2nd, 2017

Arctic Star finds the Scandinavian north an hospitable place for diamond exploration

by Isabel Belger

Update: On November 21, 2017, the company announced Scott Eldridge’s appointment as president/CEO, while Patrick Power became executive chairperson.

Isabel Belger

Isabel Belger

Isabel: I would like to introduce the CEO and president of Arctic Star Exploration TSXV:ADD, Patrick Power. Hi Patrick, it is a pleasure to talk to you again.

To give the readers a chance to get to know you a bit, would you be so kind as to tell more about your background and your experiences in the mineral exploration business?

Patrick: I started in the business as a floor trader in 1984. I did that until 1990. In that period I met someone who became soon very prolific in the diamond world, Chuck Fipke. He found the Ekati mine, the first diamond mine in Canada and he got my interest up in diamonds and the exploration for diamonds. When I finished with the floor in 1990, I joined up with a company called Kelco Resources and I became a director there. That is how I got involved with the diamond world in Canada. Subsequent to that, I worked with a company called Montello Resources, and became the president and CEO. We did a lot of diamond exploration with that company from 1993 to 2000, primarily in Alberta.

We found the Legend field in Alberta with our venture partner Canaccord Canada, which is a Rio Tinto company. We didn’t have the numbers in the pipes that we wanted to. So my partner Tom Yingling and I started our own company called Arctic Star Exploration. We started with a diamond project in Manitoba with Rio Tinto. It kicked off with that project. We never did intersect in kimberlites. Shortly after that, we managed to encourage Buddy Doyle to leave Rio Tinto and he joined us on the Arctic Star board. That happened in 1996. Buddy Doyle brought over a project with him that we called Credit Lake. We spent about $25 million on Credit Lake over a period of seven to 10 years I believe. It was a long time. It just ended recently.

Isabel: Interesting! That tells already a bit of the history of Arctic Star itself. Congratulations on the news on a new member of the board and your new project in Finland. What made the connection to Finland?

Arctic Star finds the Scandinavian north an hospitable place for diamond exploration

Patrick: Thank you, we are very excited and happy about both. It was about 2006 when Buddy Doyle looked at this project we just took into the company. We made an offer for a percentage of it. But they wanted €12.5 million for 25% of it, which we didn’t have the ability to do back then. Then 2008 came and everything became really difficult for all resource companies, specifically for diamond companies. It became very, very difficult.

Roy Spencer, who you could call the father of the Cinnamon project, found the Grip pipe, 450 kilometres east in Russia as the president of Arctic Angel in 1996. That turned out to be a mine, which started producing about two years ago. But as usual in Russia, he got kicked out before it became productive. He traced chemistry trails to the Finnish border and all those trails originated in Finland somewhere.

Isabel: What makes you so excited about this project?

Patrick: No exploration was done there in historical terms. You cannot tell the quality of the diamonds from the chemistry, but usually you can tell the amount of diamonds. All that chemistry was flooding in over 80 kilometres with no answers as to the sources. In 2007, Roy drilled first in this new field. The important part of this is that fields usually have a minimum of 30 and a high of 300 pipes. The upside potential is that it is the first pipe in a new field and that is extremely important because it has good chemistry. It is a great jurisdiction, Finland. A couple of years ago, the Fraser Institute made Finland the number one mining jurisdiction in the world. Mining and exploration friendly!

Infrastructure-wise, the Black and White Wolf, which were the two first pipes discovered—they might actually be one, because they are only 48 metres apart, we will know more about this after further geophysics being done—are only two miles away from a bus stop. Compared to Canada this is amazing infrastructure and that translates right into that you would need far less grade to become a mine. You can have a lot less compared to the north of Canada in order to be still productive. That is a big point! Also it is a very stable country since it is rated a great jurisdiction to be in. We have got Roy on the board now, the man who found this particular discovery when he was with a different company. Another interesting fact: Roy was Buddy Doyle’s first boss at Rio Tinto. They were in the outback of Australia together for two years looking for diamonds. That was more than 30 years ago. And now they are reunited. So the team is back together again. This is one of the prime reasons we got this project because of this relationship between Buddy and Roy; Roy wanted Buddy to lead the project.

Isabel: What is the plan of the re-united team now?

The project offers everything if you are looking for diamonds. Great jurisdiction, great infrastructure, it is a new field, and it has got history in the same craton with productive mines in Russia.—Patrick Power

Patrick: We are going to get out there. We will go back to the Black and the White Wolf, the two pipes that he found in 2006/2007. We will do some geophysics on top of it that wasn’t done 10 years ago. We want to see if they join, get bigger, have multiple phases, do some more drilling, etc. With those two pipes, or maybe it is one, we can potentially make a mine. So there is work to do on the first two pipes of a new field. We expect to find a lot more pipes and that is exciting because the chemistry going into them is dynamic. The project offers everything if you are looking for diamonds. Great jurisdiction, great infrastructure, it is a new field, and it has got history in the same craton with productive mines in Russia.

Isabel: Let me interrupt you for a moment. Could you explain what a craton is?

Patrick: Sure. A craton is a thick, old chunk of continental plate where diamonds form. Kimberlite pipes are created when magma bubbles up through a craton, expanding and cooling on its way up.

I am really glad that we have got all that exceptional expertise within Arctic Star…. Roy was part of the team that found Orapa, the second-largest producing mine in the world that is in Botswana. So we have got lots of positive diamond experience with the two guys, plus they work together and like each other. Their records speak for themselves. They are probably the two most awesome diamond guys with that combined experience and mine-finding ability. They are pretty amazing. We’ve got the best people in the world.

Isabel: Yes, it sounds like it! So the next step is to do more work on your new project. Will you drill, and how deep will you have to drill?

Patrick: The two pipes are very close to the surface, so it is not that deep at all. We have two phases of two programs here. The first program will be carried out on Black and White Wolf, the two existing kimberlites. We will do geophysics on the ground, to determine whether they get larger, whether they come together and whether they have multiple phases. We will also put more drill holes into it to get more samples to get a better diamond count. Buddy thinks we need about 1,000 kilograms before he can make a judgement if we go ahead with it or if we drop it, so we only have a very small amount of material so far. We will take a lot more tonnage out of these drill holes.

Arctic Star finds the Scandinavian north an hospitable place for diamond exploration

Arctic Star VP of exploration Buddy Doyle collecting
float samples at the Timantti project in Finland.

And then out of a bigger concept, we have 250 hectares of mineral claim permitted; 140,000 square kilometres around it. So on that bigger puzzle we could encompass the entire field. We are going to fly EM and mag first and then we want to fly a gravity survey, which is quite expensive. It costs probably about three to four million dollars to get the gravity survey done, but it will be a tool that will be very useful. It has not been used that much in the diamond world; it is only a few years old. Gravity is a very difficult thing to produce on the ground. There are a lot of factors involved with that. This new tool that was developed by the U.S. military was re-developed into a commercial application by BHP and has been on the market for just a few years. Very expensive!

So that is what we plan to do on the big package, not just the claims we acquired, but the much bigger exploration permits that we are in the process of acquiring from the government. We think that this would give us the entire field picture. We will be able to prospect for the pipes in that field. That will be a big thing! We think there are a lot of pipes in this area. If the chemistry is good, it is suggested to have a lot of diamonds. But I repeat to state that it doesn’t tell you the quality of diamonds, but the quantity of diamonds.

Isabel: What is the time frame for that? This is not going to happen this year, is it?

Patrick: The only thing that is restricting us up there is the darkness. The latitude is pretty high, but it is not as cold as in northern Canada. So there is no temperature issue and again the infrastructure is great. It is just within the dark months that we can’t really do much.

Isabel: What is going on at your Cap property in northeast B.C.?

Patrick: In 2008 we diversified a bit from diamonds. We picked up a project from Zimtu [TSXV:ZC]. It is Jody Dahrouge [of Dahrouge Geological Consulting] who has been doing all the work on it for us. We spent only about $1 million developing a really nice niobium and rare earth target. It is probably in carbonatite; we are drill-testing as we speak. It has really good niobium numbers on surface and it is prospective. We decided with a million dollars into it, we need to drill it right now and we are crossing our fingers. It could be something really interesting. If we are successful, we are probably going to spin it out into a new company. We don’t want to mix niobium and diamonds. It will benefit the shareholders with a new share in a new company and we will staff it with people that know a lot about niobium.

Isabel: That sounds like a good plan! How much money do you have in the bank?

Patrick: We are planning to finance soon.

Isabel: How much of Arctic Star is held by the management?

Patrick: That sums up to be 25% by now.

Isabel: What do you like about the mineral exploration business?

Patrick: It is a difficult business, but it can be explosive on the upside. That is the thrill I like about it, which makes the difficult part worthwhile.

Isabel: What is your favourite commodity and why?

Patrick: Definitely diamonds! The reason for that is because it is so hard to find an economic deposit. It is very challenging.

Isabel: Good luck with the ongoing drilling in B.C. and with the new project in Finland. Thank you so much for your time and your insights. It is always a pleasure to talk to you.

Patrick: Thanks for having me, Isabel.

Patrick Power

Patrick Power, president/CEO
of Arctic Star Exploration

Bio

Patrick Power is a seasoned venture capitalist and financier with over 20 years of experience as a stock market professional and as director of public companies. He has been president and CEO of Arctic Star since its inception in 2002. Additionally, Mr. Power serves as a director of other mineral exploration companies. Arctic Star benefits from Mr. Power’s wealth of experience as a shrewd dealmaker, an adept financier and a tireless, results-driven leader of dynamic public companies. The company enjoys Mr. Power’s large network of contacts within the industry, his enthusiasm and his efforts as a member of the audit and remuneration panels.

Fun facts

My hobbies: Travelling and horse racing

Sources of news I use: Internet

My favourite airport: London Heathrow

My favourite tradeshow: PDAC in Toronto

My favourite commodity: Diamonds

With this person, I would like to have dinner: My wife

If I could have a superpower, it would be: Power for peace

Read more about Arctic Star Exploration here and here.

Robert Friedland’s favourites

July 28th, 2017

Unprecedented demand calls for unparalleled grades, the industry legend says

by Greg Klein

For all that’s being said about lithium and cobalt, Robert Friedland argues that the energy revolution also depends on copper and platinum group elements. Of course he has a stake in them himself, with Kamoa-Kakula and Platreef among his current enthusiasms. Still, whether motivated by self-interest or not, the mining titan whom Rick Rule calls “serially successful” presented a compelling case for his favourite metals at the Sprott Natural Resource Symposium in Vancouver on July 25.

We’re living in “an era of unprecedented change,” said Ivanhoe Mines’ TSX:IVN founding chairperson. China’s the main cause. That country’s “breeding mega-cities prodigiously.” But one result is “incredibly toxic air… with a whole suite of health effects” from heart attacks to stroke, asthma to Alzheimer’s.

Unprecedented demand calls for unparalleled grades, the industry legend says

A crew operates jumbo rigs to bring
Ivanhoe’s Platreef mine into PGM production.

China’s not alone. Friedland pegs current global population growth at 83 million a year, with a projected 8.5 billion people populating the planet by 2030. Five billion will inhabit urban areas. Forecasts for 2050 show 6.3 billion city-dwellers. But China, notorious for its poisoned atmosphere, “is on an air pollution jihad.” It’s an all-out effort to turn back the “airpocalypse” and, with a command economy, a goal that shall be achieved.

The main target will be the internal combustion engine, responsible for about 60% of urban air pollution, Friedland said. China now manufactures 19 million cars annually, he adds. The country plans to increase output to 60 million, a goal obviously contrary to the war on pollution unless it emphasizes electric vehicles.

Like others, Friedland sees massive disruption as the economics of EVs overtake those of internal combustion engines, a scenario he expects by 2022 or 2023.

Demand for lithium-ion batteries (comprising 4% lithium, 80% nickel sulphate and 15% cobalt) has sent cobalt prices soaring. But bigger EVs will likely rely on hydrogen fuel cells, he pointed out. They’re already used in electric SUVs, pickup trucks, double-decker buses in London, trains in Germany and China, and, expected imminently, autonomous air taxis in Dubai.

Hydrogen fuel cells need PGMs. If only one-tenth of China’s planned EV output used the technology, demand would call for the world’s entire platinum supply, Friedland said.

“I would rather own platinum than gold,” he declared. Additionally, “there’s no platinum central reserve bank to puke out platinum.”

Ivanhoe just happens to have PGMs, about 42 million ounces indicated and 52.8 million ounces inferred, at its 64%-held Platreef project in South Africa.

Unprecedented demand calls for unparalleled grades, the industry legend says

Underground development progresses at the Kansoko mine,
part of the Kamoa copper deposit and adjacent to Kakula.

Electricity for the grid also ranks high among China’s airpocalyptic priorities. A study produced for the United Nations Environment Programme credits the country with a 17% increase in renewable electricity investment last year, most of it going to wind and solar. Almost $103 billion, China’s renewables investment comes to 36% of the world total.

Just as EVs remain more copper-dependent than internal combustion, wind and solar call for much more of the conductive commodity than do other types of electricity generation. Friedland sees additional disruptive demand in easily cleaned copper surfaces now increasingly used in hospitals, care homes, cruise ships and other places where infectious diseases might lurk.

He sees a modest copper supply deficit now, with a crisis possibly starting as soon as 2019. The world needs a new generation of copper mines, he said, repeating his unkind comparison of today’s low-grade, depleting mines to “little old ladies waiting to die.” The world’s largest producer, the BHP Billiton NYSE:BHP/Rio Tinto NYSE:RIO Escondida mine in Chile, is down to a 0.52% grade.

Copper recently hit a two-year high of about $6,400 a tonne. But, citing Bernstein data, Friedland said new mines would require a $12,000 price.

Not Kamoa-Kakula, though. He proudly noted that, with an indicated resource grading 6.09%, it hosts “the richest conceivable copper deposit on this planet.”

I’ve never been as bullish in my 35 years on a project.—Robert Friedland

A JV with Ivanhoe and Zjin Mining Group each holding 39.6% and the DRC 20%, Kamoa-Kakula inspires “a plethora of superlatives.” The veteran of Voisey’s Bay and Oyu Tolgoi added, “I’ve never been as bullish in my 35 years on a project.”

The zillionaire likes zinc too, which his company also has in the DRC at the 68%-held Kipushi project. With a measured and indicated grade of 34.89%, the Big Zinc zone more than doubles the world’s next-highest-grade zinc project, according to Ivanhoe. There’s copper too, with three other zones averaging an M&I grade of 4.01%.

“Everything good in the Congo starts with a ‘K’,” he said enthusiastically.

But recklessly, in light of the DRC’s controversial Kabila family. In June Ivanhoe was hit by reports that the company has done deals with businesses held by the president’s brother, Zoe Kabila, although no allegations were made of wrongdoing.

The family has run the country, one of Africa’s poorest, since 1997. Current president Joseph Kabila has been ruling unconstitutionally since November, a cause of sometimes violent protest that threatens to further destabilize the DRC.

As the New York Times reported earlier this month:

An implosion of the Democratic Republic of Congo, a country almost the size of western Europe, could spill into and involve some of the nine countries it borders. In the late 1990s, neighbouring countries were sucked into what became known as the Great War of Africa, which resulted in several million deaths.

Friedland’s nearly hour-long address made no mention of jurisdictional risk. But the audience of hundreds, presumably most of them retail investors, responded warmly to the serial success story. He’s the one who, after Ivanhoe languished at five-year lows in early 2016, propelled the stock more than 300% over the last 12 months.

Closeology helps Zimtu Capital close in on NWT diamonds

June 21st, 2017

by Greg Klein | June 21, 2017

A surprisingly neglected property in an especially prospective location gets some overdue attention as a crew mobilizes for the Northwest Territories’ Munn Lake diamond project. Held 50% each by Zimtu Capital TSXV:ZC and a staking partner, the property has ground geophysics and till sampling about to begin.

The property does have diamonds, as historic work shows. Non-43-101 results from a 581-kilogram sample on the Yuryi boulder field revealed 226 diamonds, 62 of them macro-diamonds. Non-43-101 results from a 42-kilogram sample on the Munn Lake kimberlite sill showed 14 diamonds, including two macros and 12 micro-diamonds.

There’s closeology and then there’s closeology, as Zimtu Capital closes in on NWT diamonds

Southern Slave kimberlites show an incomparably
higher success rate than those of the northern craton.

The Munn Lake sill is the source of one of five kimberlite indicator mineral trains. The other four have seen little follow-up work, leaving their sources unknown.

The current agenda calls for further till sampling and a tight magnetic survey, explains Neil McCallum of Dahrouge Geological Consulting, which will conduct the program. Using GPS that wasn’t available to the previous operator, he expects “more focused” results.

One of the distinctions that really intrigues McCallum is Munn Lake’s especially prospective location. The Slave Craton has three diamond mines in operation, two past producers and an advanced stage project. But chances of a kimberlite actually holding diamonds are much higher in the southern Slave, home to Munn Lake.

“There are some 250 or so known kimberlites in the northern Slave’s Lac de Gras field whereas the southern Slave has only about 16 that are known,” McCallum explains. “Of those 16, six have been mined, are currently producing or are in advanced stages.” He points to De Beers’ former Snap Lake operation, the high-grade Kelvin and Faraday kimberlites being advanced by Kennady Diamonds TSXV:KDI and three kimberlites going into Gahcho Kué, the De Beers/Mountain Province Diamonds TSX:MPV JV that officially opened last September as the world’s largest new diamond mine in 13 years.

That’s notwithstanding the Lac de Gras success stories in the north, home to the Rio Tinto NYSE:RIO/Dominion Diamond TSX:DDC Diavik JV and Dominion’s majority-held Ekati mine.

Kimberlites of the south Slave are much older (by nearly 500 million years) and much rarer than those of the north. But when they’re found, they’re much more likely to bear diamonds—and diamonds of economic grades, McCallum adds.

“The Munn Lake property is closer to the kimberlites of the southern Slave cluster and the Munn Lake kimberlite sill is similar in geometry to the others in the southern Slave. So with the proposed expansion of the Munn Lake kimberlite sill and the potential for several new kimberlites on the project, the Munn Lake property has very good odds for a high-grade discovery.”

Munn Lake also benefits from a winter road running through the 14,000-hectare property, connecting Gahcho Kué with Yellowknife.

McCallum expects the mag results to arrive about one week after the survey finishes, with the till samples taking about a month. “I’m really looking forward to see what comes out,” he says.

“I’d like to see some drilling on the project too. On the kimberlite that the past operators did intercept, I’m not sure they hit the best target.”