The Northern Miner Volume 85 Number 18 June 28-July 4, 1999
Winspear unveils Snap Lake results
By Rob Robertson
Vancouver
The NW Snap Lake kimberlite dyke can no longer be said to have the richest per-carat values ever reported in the
Northwest Territories. Results from the first half of a 6,000-tonne surface bulk sample have yielded per-carat values
only one-third that of last year's initial valuation, while per-tonne values have dropped by almost half. Even so, the
bulk sample results compare favourably to some of the best kimberlite pipes in Canada's far north.
Winspear Resources (WSP-V) recovered 5,542.27 carats of cleaned diamonds from a 3,003.9-tonne sample collected from
pit 4 for an indicated grade of 1.845 carats. The recovered diamonds were all retained on a 1.15-mm mesh screen, and so
are of comercial size.
The stones were determined by six independent Antwerp diamantaires and one Canadian group to be worth an average of
US$98.42 per carat, which equates to an implied value of US$181.58 per tonne. Winspear President Randy Turner says the
valuators concluded that the NW dyke diamonds represented "a very healthy distribution and a very marketable distribution."
He adds: "A lot of the stones are in the 1-to-4-carat category, which is where the market is these days."
The parcel of diamonds included 88 stones weighing more than 3 carats. Six of the stones are classified as specials, meaning
they exceed 10.8 carats in weight. The largest recovered diamond weighed 14.3 carats.
By comparison, last year's 199.7-tonne sample of the NW dyke yielded 226.72 carats of stones for a preliminary cleaned
grade of 1.14 carats per tonne. Those stones were valued by three independent Antwerp diamantaires at US$301.43 per
carat, resulting in an implied value of US$343 per tonne. The parcel included 25 stones weighing more than 1 carat, with the
three largest stones weighing 10.82, 8.42 and 6.04 carats.
Few details were known about the significance of the larger stones until speculation by newsletter writers prompted
Winspear to release further details. The three largest stones represented about 10% by weight of the total parcel and
accounted for 75% of the value. If the three stones had been excluded from the parcel, the value of the remaining diamonds
would have been US$83.26 per carat.
Last year's mini-bulk sample was collected from two surface pits set 235 metres apart on the northwestern peninsula of Snap
Lake. Pit 1, the most northern pit, yielded a grade of 0.848 carat per tonne based on the recovery of 90.69 carats from a
105.7-tonne sample. Only two stones weighing more than three carats were recovered from pit 1, the largest being 6.04
carats.
Pit 2 graded 1.47 carats per tonne, based on the recovery of 138.21 carats from 94 tonnes. The two largest stones (10.82 and
8.42 carats) were recovered from pit 2. Turner says pit 2 may account for as much as 70% of the 1998 valuation. Initially,
there was speculation that the variation in grade and values between the two pit areas might have been caused by excessive
dilution from footwall rocks during the excavation. Turner now believes this can be explained by a lower variation in the
average grain size distribution within the kimberlite. He says that although the NW dyke appears to be a homogeneous
kimberlite that is sourced from one main fissure, within any kimberlite there will be a variation in the grain size distribution.
This year's 6,000-tonne bulk sample was excavated from two larger pit areas next to the site of last year's sampling. Pit 4 is
adjacent to, and downdip from, pit 1. Turner suggests the differences in results between pits 1 and 4 may be attributed in part
to different process plants used to treat the samples. Last year's mini-bulk sample was processed at Rio Tinto's (RTP-N)
Diavik Diamond Mines recovery plant in Yellowknife, whereas this year's 6,000-tonne bulk sample is being treated at a
plant 100 miles north of Snap Lake. Turner blames the higher recoveries of lower-quality stones for dragging down the
overall carat value.
The remaining 3,000 tonnes of bulk sample from pit 3 are being processed, with results expected in the next four to five
weeks. Pit 3 is adjacent to pit 2 and 260 metres south of pit 4.
Any decision to proceed with further bulk sampling will hinge on the results of pit 3. Turner says that if the pit 3 values are
consistent with those of pit 4, it is likely that the values are representative of run-of-mine production. However, if pit 3
values are substantially higher, then it would appear that there is a variation in the kimberlite and a decision to go
underground may result. The Canadian division of Mineral Resource Development Inc. (MRDI) is preparing a revised
resource estimate, based on results from the winter and spring grid drilling program. The NW dyke subcrops on the
northwestern peninsula and dips 11-15¡ to the east beneath Snap Lake. Drilling indicates that the dyke extends 2 km in a
northerly trending direction, 2.5 km downdip, and has an average thickness of about 2.5 metres. Based on these projections,
David James, a mining analyst with Canaccord Capital, estimates that a dimension of 1,000 by 1,000 by 2.3 metres would
generate a geological resource in the order of 8-10 million tonnes of kimberlite.
Winspear completed 123 drill holes this season with only one miss, which was a wildcat hole that stepped out 1 km to the
east. Samples from the holes are undergoing caustic fusion analysis. Winspear hopes to use the microdiamond work to
predict macrodiamond grades.
Turner is confident the 1999 drilling program has exceeded its objective of outlining a resource of 5 million tonnes for the
basis of a feasibility study.
In a 1998 scoping study, MRDI assumed a potential 3.5-million-tonne resource would warrant a combined open-pit and
underground mining operation with a life of 10 years based on a 1,000-tonne-per-day rate. Capital costs were estimated at
$103.8 million; operating costs, at US$59 per tonne.
James projects an annual pretax operating profit of US$45-50 million, assuming a grade of 1.8 carats per tonne and a carat
value of US$100 per tonne.
"All said," James states, "we think we have a new diamond mine for the Northwest Territories, with some interesting
neighbours to the east [Monopros/Mountain Province]."
Snap Lake is part of the Camsell Lake project, situated 220 km northeast of Yellowknife. Winspear is the project operator
and currently holds a 67.76% interest in Camsell Lake. Aber Resources (ABZ-T) holds the remaining 32.24% but is
currently involved in a legal dispute with Winspear over its right to participate in this year's exploration program; the
dispute could result in a dilution to 16%.
For the purpose of comparison, diamond values and implied tonnage values for the five pipes slated to be mined at the Ekati
mine of BHP Diamonds and Dia Met Minerals (DMM-T) are as follows:
US$130 per carat (US$140 per tonne) for Panda;
US$125 per carat (US$50 per tonne) for Fox;
US$122 per carat (US$110 per tonne) for Koala;
US$64 per carat (US$59 per tonne) for Sable; and
US$26 per carat (US$111 per tonne) for Misery.
At the Diavik project of Rio Tinto and Aber, the A-154 South pipe is valued at US$63 per carat (US$302 per tonne); the
A-418, at US$56 per carat (US$207 per tonne); the A-154 North, at US$35 per carat (US$84 per tonne); and the A-21, at
US$38 per carat (US$114 per tonne).
Preliminary values of the Kennady Lake cluster of pipes at the AK joint venture of Monopros, Mountain Province Mining
(MPV-V) and Camphor Ventures (CFV-V) are as follows: US$51 per carat (US$82 per tonne) for the 5034 pipe; US$44 per
carat (US$103 per tonne) for Hearne; US$68 per carat (US$150 per tonne) for Tuzo; and US$96 per carat (US$36 per
tonne) for Tesla.
Diamonds of the JD-1 pipe at the Jericho project of Tahera (TAH-T) have been recently re-valued at US$69.65 per carat
(US$63 per tonne).
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