Tahera feels like Lytton again
Tahera Corp TAH
Shares issued 176,294,197
Apr 26 close $0.155
Thu 26 Apr 2001
Street Wire
MEANWHILE, BACK AT THE RANCH
by Will Purcell
While its Jericho project waits for approvals, Tahera Corporation has been
busy reorganizing its hunt for new kimberlites that might add to its
resource base. The company has negotiated a number of exploration deals for
its large land holding in Nunavut and the Northwest Territories, which
seems to suggest that the company is once again making exploration a
priority. Although the company has added some new ground upon which to
conduct its search, it seems that a prior failure will be resurrected in
the hopes that it might yet prove to be economic, and the company seems
poised to exchange an old partner for a new one.
The recent manoeuvring suggests that the Ranch Lake kimberlite is about to
get a second look, after it was written off as uneconomic in 1994. Tahera's
predecessor company, Lytton Minerals Ltd., discovered the large pipe early
in 1993 and used it as the base to aggressively -- some might say
outrageously -- promote the company.
The first drill core samples revealed a modest diamond count, with 208.1
kilograms of sample yielding 44 diamonds, of which six were large enough to
be classed as macrodiamonds. Several delineation holes were completed into
the large pipe, and additional samples were undoubtedly processed, although
the results were never released.
Although the company subsequently pronounced Ranch Lake to be uneconomic
based on that limited microdiamond resting, at the time, Lytton was
sufficiently enthralled with the pipe that it elected to take a small
mini-bulk sample by extracting a large number of drill cores. The sample
was processed by the Saskatchewan Research Council laboratory -- apparently
all of it by caustic fusion.
In the spring of 1994, Lytton finally received the results of that unusual
-- and costly -- program. Sample weighing 28.45 tonnes was extracted, and
112 macrodiamonds were recovered. Those stones weighed 5.384 carats, which
suggested a grade of about 0.2 carat per tonne. Lytton termed the result
"less than impressive," although for a time it still muttered about taking
a larger sample. It was the first of three big busts during 1994, but it
was quickly overshadowed by the failure of the Tli Kwi Cho pipe to meet
expectations just a few months later.
One of the attractions of the Ranch Lake pipe is its sheer size, and
estimates suggest that it contains at least 40 million tonnes of
kimberlite, making it one of the largest bodies found in Canada's North.
Although the grade was poor, the Ranch Lake pipe is believed to have a
fairly coarse diamond distribution curve, and global grade estimates as
high as 0.35 carat per tonne have been bandied about.
The diamonds were apparently of reasonable quality, although the tiny
parcel was never valued. Estimates suggest that about one-third of the
stones by weight were of gem quality, with most of them described as
colourless. In 1994, when Lytton was still touting Ranch Lake, it said that
the garnet chemistry supported a "good to high grade source" of 0.5 carat
per tonne, or more. Even so, such a grade would be quite marginal in the
Northwest Territories to the north of Ekati, although if a higher-grade
pipe were found, a high-grade portion of Ranch Lake could conceivably
become marginally economic, providing additional feed to a processing
plant.
Although Lytton never went back to sample Ranch Lake, the company kept
exploring the Ice claims and managed to come up with several other
kimberlite finds -- discoveries that the company seemed quite reluctant to
talk about, likely because they never amounted to much. The small T-27
kimberlite was found in the extreme northwestern corner of the Ice
property, about 50 kilometres to the west of Ranch Lake. The body was
barren, or just marginally diamondiferous at best.
The small T-31 kimberlite is located near the eastern boundary of the Ice
claims, about 40 kilometres to the east of Ranch Lake. The pipe was
apparently diamondiferous but again, the kimberlite was not considered
worth a closer look. In 1997, another find was made, close to T-31, which
seemed to have more promise. The LI-201 pipe was also small -- just 80
metres in diameter -- but 281.1 kilograms of kimberlite contained 60
diamonds, with 14 of them classed as macro-sized stones. One of them was
quite substantial for such a small sample, at 0.15 carat, and the
kimberlite is believed to also have a coarse diamond size distribution. The
small size of the pipe seemed to rule out any mini-bulk sampling, however,
as the total amount of kimberlite in such a body is probably limited to
three million tonnes or less.
The Vega kimberlite was discovered on the Ice claims in early 1999. The
pipe is about 20 kilometres to the southeast of Ranch Lake, and about 20
kilometres north of another 1994 dud, the Torrie pipe, located on the Yamba
Lake joint venture property now led by SouthernEra Resources Ltd. Two holes
were drilled into the body, but both intersected only about 50 metres of
kimberlite, and diamond counts of samples proved to be disappointing.
Despite the disappointments on the Ice claims, the two finds with a coarse
diamond distribution curve seemed to keep Tahera's interest alive, and the
company now seems to be shopping for a new joint venture partner to explore
them further.
In 1997, Lytton struck a deal with Kennecott Canada Exploration Inc.,
whereby Kennecott could earn a 50-per-cent stake in Lytton's Ice, DIA,
Rockinghorse and Hood River properties by spending $50-million in
exploration. That deal has now been reworked so that Kennecott can earn a
25-per-cent interest with the expenditure of $25-million by 2008, and a
62.5-per-cent share if it completes a full feasibility study and makes a
production decision.
Absent from the new deal are the Ice claims, in which Kennecott has
relinquished its interest, in exchange for a 1-per-cent royalty on already
discovered kimberlite bodies. That leaves Tahera with 100-per-cent control
of the Ice claims, but that arrangement may not last for long, as the
company seems to be shopping the property around. Thursday, Tahera said
that it was showing all the relevant data to BHP World Exploration Inc.,
and that company has 45 days to review the information and decide if it
wished to strike an option deal with Tahera.
Tahera now seems to be touting Ranch Lake as having a chance once again.
The company says that the grade, distribution and quality of diamonds "are
very weakly defined," adding that the mini-bulk sample may not be
representative of the grade of the entire kimberlite. Only time will tell
if BHP agrees with that assessment and strikes a deal with Tahera.
The deal with Kennecott seems curious, as the Ice claims appear to have
produced the best finds of all the properties. The first kimberlite found
on the remaining properties was Altair, discovered in 1999 on the
Rockinghorse claims, but it was quickly pronounced to be uneconomic. Last
year, a second body was discovered on Rockinghorse. The new find, Nanurjuk,
is located about 70 kilometres to the west of Jericho, and it appears to be
a series of stacked thin sills that are up to three metres thick and spaced
three to four metres apart. No diamonds were recovered from sample taken
from Nanurjuk, but only 7.2 kilograms of material was processed.
Nevertheless, the partners made no plans to conduct further testing.
The Hood River property yielded its first kimberlite discovery last year.
The Tenacity kimberlite is located about 110 kilometres to the north of
Jericho, not far from the diamondiferous Knife Lake pipe now being explored
by Rhonda Corporation and De Beers Canada. About 558 kilograms of
kimberlite core from Tenacity was processed, and it yielded 218 diamonds,
including 24 macro-sized stones. One of those diamonds was large enough not
to fall through a one-millimetre square sieve, but the partners quickly
wrote off Tenacity as probably not having sufficient grade or size to be
economic on a stand-alone basis.
The finds do seem to have whetted the appetite of Kennecott, as the company
has now agreed to spend a minimum of $2-million this year, and at least
$1.5-million per year over the next several years, on exploration on the
Rockinghorse and Hood River properties. As a result, they will likely
receive a good look.
The Kennecott agreement once included the DIA claims, located just east of
the Ice property. One kimberlite was discovered on the DIA ground, about 50
kilometers to the east of the Ranch Lake pipe. A total of 48 diamonds were
recovered from 222 kilograms of DIA-1 kimberlite, two of which were
macrodiamonds. The pipe is very small -- about 35 metres in diameter -- and
its size and low diamond content ruled out any further work. Kennecott
ultimately chose to terminate its option deal on the DIA ground, and
nothing has been done since then.
Tahera has also signed an option deal of its own. The company has an
agreement with Navigator Exploration Corporation that would allow it to
earn a 51-per-cent stake in Navigator's 370-hectare JH1 and JH1A
properties, which are located about 25 kilometres to the southeast of
Jericho. The properties are small, but two promising kimberlite targets
have already been identified. To earn the interest, Tahera must conduct
ground geophysics over the two targets, and the company must also drill at
least one of those targets and process at least 50 metres of kimberlite
core -- assuming it actually hits kimberlite. Tahera must also complete
1,500 metres of drilling and complete a 10-tonne mini-bulk sample on a
prospective kimberlite within the next four years.
The JH1 properties are probably attractive to Tahera due to their proximity
to Jericho. As well, the general area has produced one economic pipe --
Jericho itself -- and a few other that have had grades of about 0.3 carat
per tonne in smaller mini-bulk samples like the JD/OD-3 and Contwoyto-1
kimberlites. All that would seem to make the two targets worth taking a
look at.
Tahera also has a 22.5-per-cent stake in the Roundrock property that is
being explored by Ashton Mining of Canada Ltd. In 1996, Ashton discovered
the Aquila kimberlite on Roundrock. The find was initially described as a
series of dykes with a considerable strike length, but it was later termed
a small pipe with a series of dikes associated with it. No matter, as just
16 microdiamonds and three macros were recovered from about 125 kilograms
of sample.
A second find was made last year, when Ashton located the Cygnus
kimberlite, which appeared to be a horizontal body about 20 metres thick.
Eight microdiamonds were recovered from about 88 kilograms of sample, which
suggested to Ashton that the kimberlite had little promise. Apparently
Tahera thinks so too, as the company declined to participate in the
Roundrock exploration program last year, and its interest was diluted as a
result.
Tahera traded as high as 23 cents last year as the market became aware of
the improved prospects at Jericho, but speculators seemed to tire of the
story, and the stock retreated to an 11-cent low at the beginning of April.
Since then, interest seems to be picking up again, and Tahera has returned
to the 15-cent level. That remains a far cry from the glory days in the
spring of 1993, when the heavily promoted Lytton ran to $6.50 per share,
based on the hype surrounding the Ranch Lake pipe and the Ice claims.
Tahera moved up one-half cent Thursday, to 15.5 cents.
(c) Copyright 2001 Canjex Publishing Ltd. stockwatch.com |
