WillP is working hard this week, but then it's an interesting week at least in the Chineses sense.
Anyway this street wire if it comes through might interest you.
Mountain Province a candidate for interesting news
Mountain Province Mining Inc MPV
Shares issued 42,444,760 Jul 15 close $3.15
Fri 16 Jul 99 Street Wire
LARGER DIAMONDS, INTRIGUING NEW PIPES
by Will Purcell
Mountain Province Mining Inc. has released the preliminary results from the
first of a series of larger minibulk samples taken at its Kennady Lake
project, in the Northwest Territories.
The three primary kimberlite pipes were sampled this past winter, with the
goal of obtaining a sample of approximately 1,000 carats from each. A
fourth pipe was also sampled with a much more modest objective.
The initial results were for the AK-5034 pipe, which was the first body
discovered on the property. A total of 573 tonnes of kimberlite were
processed, and 980 carats of diamonds were recovered. The resulting grade
was 1.71 carats per tonne, which was marginally higher than the previously
estimated grade of 1.6 carats per tonne.
The larger sample size resulted in a number of larger diamonds being
recovered. The largest stone weighed 10.0 carats, and two other diamonds
weighed just under five carats, at 4.90 and 4.85 carats respectively. In
all, there were seven diamonds with weight exceeding three carats, and 42
with a weight greater than one carat. A total of 155 stones were recovered,
with a weight exceeding 50 points, or one-half carat.
The results are encouraging, but largely expected. Two smaller minibulk
samples had been taken from the pipe in years prior. In 1998, Monopros
extracted a 55.8 tonne sample and recovered 101 carats, for a grade of 1.81
carats per tonne. The two largest diamonds weighed 1.90 carats, and 1.68
carats respectively. A further three stones were recovered with a weight
exceeding 0.8 carats. The grade figures are not directly comparable. The
1998 sample used a square screen size of 1.0 millimetre, while the current
results were based on diamonds which did not fall through a 1.5-millimetre
square mesh.
In 1996, Mountain Province extracted a 104-tonne sample from the pipe, with
257 carats being recovered. The largest diamond was 2.88 carats, and eight
stones exceeded 1.5 carats weight. A total of 43 diamonds weighed more than
50 points. The reported grade was 2.48 carats per tonne, but no lower
screen cutoff was used. At the time, Monopros estimated a grade of 1.5
carats per tonne, for diamonds larger than the commercial 1.65-millimetre
square cutoff. On this basis, the grade reported from the current bulk
sample appears to be in line with the 1996 and 1998 results, and with the
modeled estimates of Monopros.
The market now awaits word of the value of the recovered stones. The 1996
minibulk sample returned an estimated value of $55 (U.S.) per carat, or
$82.50 (U.S.) per tonne. In 1998, Monopros modeled the average value to be
approximately $51 (U.S.) per carat, with a possible range between $26
(U.S.) and $58 (U.S.) per carat. This method of reporting value is
proprietary to Monopros, and is unique to this project.
The presence of one much larger stone could be both a blessing and a curse.
The largest stone recovered from this years sample is more than twice the
size of the next largest diamond. This stone could be worth next to
nothing, or be very valuable indeed. In the latter case, a 10-carat stone
could carry a value in excess of $25,000 (U.S.), which would increase the
value of the bulk sample by more than $40 (U.S.) per tonne. This would
represent a situation very similar to that experienced by Winspear
Resources Ltd. last summer. A very high valuation resulted from a 200-tonne
minibulk sample, but 75 per cent of the value was contained in the three
largest stones. Should the top three stones recovered from AK-5034 be of a
quality comparable to those recovered by Winspear, a similarly skewed
valuation could well result.
This situation is well recognized by the joint venture partners. Mountain
Province president, Jan Vandersande, said that the value data would not be
available until September. He indicated the data would be reported in a
similar format to prior results, based on Monopros model data, rather than
raw valuations. "When you are dealing with small samples, the values could
be either way high, or way low", he stated. Mr. Vandersande said that the
method used by Monopros would remove any bias introduced by larger stones,
and any variations in grade throughout the deposit. In simple terms, the
method involves constructing a diamond distribution curve for the deposit
to determine the grade, and assigning a value based on the average quality
for the different size classes. In that fashion, the 10 carat stone will
receive a certain average value, irrespective of its actual value. This
method of reporting valuation has been criticized in some circles, however
Mr. Vandersande believes this is the proper way to report such data.
The bulk sample from 5034 was taken by the reverse circulation drilling of
13 holes, to a depth of up to 300 metres. The diamonds recovered are logged
in such a fashion that the grade of the pipe can be modeled in three
dimensions. Mr. Vandersande stated that no underground bulk sample was
planned on any of the pipes, and considered the data from the recent
samples sufficient to advance the project to a feasibility decision. He
acknowledged that further delineation drilling would likely be required, to
more accurately define the shapes of the kimberlites.
Mr. Vandersande stated that Monopros would likely make a decision to
proceed to feasibility this fall. If a positive decision is reached, the
bankable feasibility study would consider the appropriate method to
construct the mine and processing facility, deal with projected revenues
and expenses, and begin the extensive environmental work required to
achieve the granting of the necessary permits.
Mr. Vandersande believes a mine can be constructed at Kennady Lake for
$350-million (U.S.). He noted that the price tag for Ekati was $500-million
(U.S.), but felt that Monopros could lower this by a significant amount. He
said that the Ekati project faced additional costs, as they were the first
to develop a diamond mine in the Northwest Territories, and felt that
Monopros would consider alternate methods of facility construction. He
noted that De Beers and Monopros had over 100 years experience in diamond
mining.
Under the terms of the joint venture agreement, Monopros is responsible for
providing the funds required for the feasibility study, and for mine
construction, although these costs would be recovered by Monopros in the
first years of production. As a result, Mountain Province is not required
to arrange any financing to develop the project. The company currently
holds a 90-per-cent interest in the property, however this would drop to 36
per cent, should the project proceed, as Monopros earns its 60-per-cent
interest. The remaining share is held by Camphor Ventures Ltd.
While valuations from the program will not be available until this fall,
Mr. Vandersande said that the grade results for the three remaining samples
should be available over the coming weeks. Of particular interest will be
the results from Tuzo, which Monopros had earlier estimated was the richest
pipe in the cluster, with an approximate value of $150 (U.S.) per tonne. In
addition to a high value, the estimated size of this pipe has recently been
increased, based on delineation drilling this past winter.
Mr. Vandersande appears particularly excited by the prospects for two
recently discovered kimberlites. The Wallace body was found in the general
area of the four main pipes, and is small. Its favourable location suggests
it may be incorporated in the mining plan, should it prove to be
sufficiently diamondiferous. The Faraday body, 12 kilometres to the
northeast of the main cluster, is particularly intriguing. Mr. Vandersande
said that "This discovery could be significant, opening the possibility,
all of a sudden, of a whole new cluster." He described the indicator
mineral train emanating from this area as sufficiently large to offer hope
that further discoveries might be made in this area. Results of the acid
dissolution of recovered core samples are pending. Should the Faraday body
prove to be diamondiferous, more drilling is planned on the body to better
determine its size and shape. As well, more exploration in the area will
take place to pursue new kimberlites.
Mountain Province shares once traded above $9 in the mid-summer of 1995,
but have lagged recently, reaching a low of $1.30 in early October last
year. The stock subsequently recovered, and had been trading in the $2.30
range for much of the spring. A steady appreciation began in mid-June as
the market anticipated the results, reaching an intraday high of $3.70
today. It appears that a steady stream of news will continue to keep the
company in the junior market's spotlight for much of this year.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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