Tuesday January 29 6:46 PM EST
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Canada's New Diamond Rush in Quebec And Nunavut
By Lesley Wroughton
TORONTO (Reuters) - Miners are rushing to stake claims in the frozen terrain of northern Quebec and Nunavut after Ashton Mining re-energized Canada's diamond sector with new discoveries there, analysts and producers said on Tuesday.
"We're in the midst of the next discoveries," said Graeme Currie, a diamond analyst for Canaccord Capital.
"In four months we have had a series of discoveries and that spurred on a staking rush in Nunavut and Quebec. It also resurrected interest for diamond exploration in Canada," he said, adding that there had been a rash of private placements and other financings for small-cap diamond exploration firms in the last two months.
Until now, Canada's diamond exploration sector had slipped off most investor radar screens with no new discoveries of merit since Snap Lake in the Northwest Territories in 1997, an asset acquired in a hostile takeover in 2000 by South African diamond giant De Beers and its first major asset outside southern Africa.
Ashton Mining of Canada Inc. said last month that kimberlitic rocks on its Artemisia property in Nunavut and in north central Quebec around the Otish Mountains were highly diamondiferous.
Since then there had been a claims rush around the Otish Mountains and further south near Mistassini Lake in Quebec where miners can stake online, whereas in Nunavut physical staking is required.
Analysts said Ashton's results were still early stage but "very encouraging". Its shares have risen 470 percent in a year to C$4.04 on the Toronto Stock Exchange.
Most of Canada's diamond finds have been in the Northwest Territories near the Arctic Circle where diamonds were first discovered 10 years ago, and in northern Ontario where De Beers is also active.
Canada is still a newcomer to the global diamond industry with only one mine, Ekati, owned by Australia's BHP Billiton , in production in the Northwest Territories. The second mine, Diavik, is slated to come on stream in 2003.
Ashton president and chief executive, Robert Boyd, said the new discoveries had stoked the interest of London-listed Rio Tinto Plc , which acquired his company in a takeover of parent Ashton Mining Ltd. of Australia and has been looking to sell the Canadian operation.
But Boyd said Rio Tinto indicated it may now not want to sell.
"It's an overnight success that has taken us three to five years of regional exploration," Boyd told Reuters.
Close to Ashton's find in Nunavut, Canada's Tahera Corp
and partner Kennecott, which is Rio Tinto's wholly owned exploration unit, have also made significant finds on their Rockinghorse property and Jericho claims, about 120 kilometers (74 miles) apart in Nunavut.
Boyd said Ashton, which was busy with advanced exploration in Alberta, returned to Nunavut after De Beers and Tahera were seen dropping claims.
"There was still potential for other discoveries in Nunavut," Boyd said of Ashton's claims in the predominantly Inuit northern territory.
In Quebec, the staking rush had seen the arrival of BHP-Billiton and partner Majescor, the largest landholders, followed by Canabrava Diamond Corp. , and Quebec-based Plexmar Resources Inc. and Dios Exploration Inc.
"The most exciting area in respect of competitor activity is the Otish Mountains area," Boyd said, adding: "One area in particular, in the north of the Otish Mountains, we had very encouraging indicator mineral anomalies that had very favorable kinds of chemistry that has been very rare in exploration being conducted in Canada to date, and results that were similar to the Ekati indicator anomalies." |
