2023-07-10 17:49 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score for Monday was an 84-84-142 draw as the TSX Venture Exchange rose six points to 621.
The kimberlite hits keep coming for Dr. Michael Gunning's VR Resources Ltd. (VRR) -- but will the diamonds follow is the question. The company caught investors unawares late last month with word it had gone back to drill a third hole into Northway, the huge magnetic target that looks to be an equally massive kimberlite pipe. The company had drilled a single hole on the southeastern fringe of the anomaly last fall, then went back this spring and drilled a second hole closer to the centre of the anomaly, hitting increasing amounts of kimberlite each time.
That was to be it for now -- at least until the company got a look at the diamond counts later this year -- but after moving the drill 15 kilometres north to complete a program at its Hecla-Kilmer rare earth prospect, it unexpectedly returned to Northway and drilled a third hole, one directed even closer to the centre of the target and toward the projected throat of the big kimberlite.
That hole is now complete, and the result is about what would be expected -- if one were expecting a huge kimberlite complex buried under a lot of sedimentary cover rock. The latest hole, drilled from the same site as the second but angled steeply toward the north, encountered the top of the kimberlite at 240 metres, the same depth as the two other holes. This latest test, however, was still in kimberlite breccia when it terminated at 627 metres.
This is the most substantial hit so far. The first hole delivered just a glancing blow, returning 40 metres of kimberlite core from the "absolute top and easternmost edge" of Northway, while the second hole, initially touted as targeting the centre of the large anomaly, delivered about 110 metes of core. There might have been more, but the hole had to be terminated early because of difficult rock conditions causing caving at the top of the kimberlite.
And so, VR Resources now has 500 metres of kimberlite core -- about 350 metres from the latest hole, combined with the rock from the first two holes -- which provides roughly 1,300 kilograms of kimberlite for "compositional studies and microdiamond evaluation," says Dr. Gunning, president and chief executive officer. That work -- the diamond counts needed to wow investors and the kimberlite details to help snow them under with jargon through the winter if the counts disappoint -- should be complete by early fall.
Dr. Gunning is suitably impressed with the Northway progress. He gushes that the three hits spanning 70 metres across the anomaly show that "the sheer scale and energy of this kimberlitic event and breccia pipe complex are both obvious and exceptional." He points to the thickness of kimberlite in the third hole, adding that "we have yet to even see the northwestern part of the complex." Further, he sees no constraints for the depth extent of the breccia based on the data available so far.
Ever the promoter -- an unusual trait for a doctor of geology -- Dr. Gunning applauds yet again the "sheer scale" of the kimberlite at Northway as supporting the potential for a new kimberlite field in the northern Superior craton. This has him and his crew "scoping the acquisition of detailed magnetic data" on the 20-odd magnetic anomalies that VR Resources hastily staked after it realized Northway was indeed a kimberlite.
With over a tonne of rock collected across a wide area of the pipe available for testing, Dr. Gunning says the company has enough kimberlite to "optimize a first-pass evaluation of the microdiamond potential" and to complete a "robust compositional characterization of the breccia." (Yes, Dr. Gunning's academic training does get in the way of his promotional exuberance on occasion.)
No matter. Investors who have bid VR Resources to its recent high of 34 cents, up from 13 cents in early spring, have bought into Dr. Gunning's pitch: To appreciate the "upside potential of Northway itself" and the company's expanded strategy to examine similar targets nearby, he harps that investors need to "remind themselves of the drill core photos and geological context for this discovery." Fellow geologists may be doing just that, while laymen investors eagerly nod along -- at least until the diamond counts come back. VR lost 2.5 cents to 27 cents on 106,000 shares today. |
