curteousy of Stockwatch-Will Purcell
Twin's Freightrain and Cargo deliver more diamonds
Twin Mining Corp TWG
Shares issued 72,109,529 Jul 10 close $0.45
Thu 11 Jul 2002 Street Wire
by Will Purcell
After a long wait, Twin Mining Corporation has finally received the diamond
counts from about two tonnes of kimberlite that had been drilled from two
of its promising bodies at Jackson Inlet, on Baffin Island. The results
suggest that the two kimberlites contain a modest number of microdiamonds,
along with some larger, macro-sized stones, but whether there will be
enough larger diamonds to actually support a mine is something that remains
to be seen. In the meantime, the latest numbers seem to offer both
encouragement and frustration for Twin's shareholders.
The Freightrain kimberlite is the most advanced of the two kimberlites at
Jackson Inlet. Twin has been poking around the potentially large body for a
few years, and the company completed a series of smaller mini-bulk tests on
the complex body earlier this year. As a result of that program, there is
no real need to worry about the possible implications that the latest
diamond counts might have on the grade of Freightrain, but the number do
seem to support the notion that Freightrain contains sections with
significantly different grades.
In all, Freightrain produced 1.1 tonnes of core that was analyzed by
caustic fusion, although it should be noted that the results actually
include the FT-04 core that had been processed earlier. In all, the rock
yielded 538 stones, including 53 macrodiamonds. That total included 15
macros that were at least 0.5-millimetre in two dimensions, and eight of
those were one millimetre in two dimensions. The three largest diamonds
were more than two millimetres in length.
That result is encouraging, although it pales once the earlier result from
FT-04 is removed. Discounting that hole, Twin processed 870.57 kilograms of
kimberlite, recovering 468 diamonds, including 43 macros. Only seven of
those were 2-D macros however, compared with the eight such stones that had
come from the 234-kilogram sample from FT-04. The new results included four
stones that were one millimetre long in two dimensions, equal to the number
that the FT-04 sample had produced on its own. Furthermore, just one of the
three two-millimetre diamonds came from the recently processed core
samples, while the other two originated in the FT-04 kimberlite.
All that would seem somewhat disheartening, if it were not for the
mini-bulk tests that have already been processed, providing a clearer
picture of the grade at Freightrain. That work produced a grade of 0.20
carat per tonne from a cumulative sample that weighed 228 tonnes, but it
was the central regions of the body that seemed of most interest. A total
of 17.3 carats had been recovered from a 76.3-tonne batch of kimberlite
taken from the centre of the Freightrain anomaly, a site dubbed JI-1, and
that suggested a grade of about 0.23 carat per tonne, while a 41.87-tonne
sample taken from site JI-4, near the southwestern edge of the main
anomaly, had yielded 14.1 carats, suggesting a grade of about 0.34 carat
per tonne. The combined grade of the two samples was about 0.27 carat per
tonne, and subsequent modelling by AMEC E&C Services suggests a total
diamond grade of about 0.5 carat per tonne in this region.
Just three of the core holes were drilled into this region, including
FT-04, and they provided the majority of the macrodiamonds recovered by
caustic fusion. A total of 574 kilograms of rock was processed from the
area around JI-1, and 252 diamonds were recovered, including 32 macros.
None of the holes were completed close to what seemed to be the best
mini-bulk site, JI-4.
Most of the remaining macrodiamonds came from the northern portion of
Freightrain. Seven shallow holes were drilled into this region, and 378
kilograms of kimberlite were sent for processing. A total of 209 diamonds
were recovered, including 19 macro-sized stones. One of the mini-bulk
sample pits was nearby. Twin Mining extracted 56.9 tonnes of kimberlite
from site JI-3, and that material yielded 7.45 carats, for an indicate
grade of 0.13 carat per tonne; about half of what the two best pits had
produced. Based on the data, AMEC came up with a total diamond grade
estimated to be about 0.2 carat per tonne.
Twin also processed 140.85 kilograms of kimberlite from the southern
portion of Freightrain, coming up with 64 diamonds, but just two
macro-sized stones. One of the two holes that provided the sample came from
mini-bulk sites JI-5 and JI-5S, from which a total of 26.2 tonnes of
kimberlite were extracted. That rock produced 2.83 carats, for an indicated
grade of 0.11 carat per tonne, similar to AMEC's modelled total diamond
grade of 0.1 carat per tonne.
Twin also drilled three holes in an area that the company refers to as its
western zone, although it appears to be on the eastern portion of the
anomaly shown in the company's annual report. Just 11.7 kilograms of
kimberlite were recovered from that material. The rock produced 13
microdiamonds, but none of the bulk tests were completed in that area. As
well, the remaining bulk sample had tested a zone that had not been
drilled. A total of 26.95 tonnes of kimberlite from site JI-6 had yielded
4.535 carats, suggesting a grade of about 0.17 carat per tonne. AMEC
subsequently modelled the total diamond grade at about 0.3 carat per tonne.
Meanwhile, the latest data provides the first real indication of the
diamond content of a second kimberlite, now named Cargo. Earlier, Twin had
processed 18.65 kilograms of kimberlite from hole JI-CG1-02, recovering 11
diamonds, including four macros. Two of those diamonds were longer than one
millimetre, and they weighed a total of 0.028 carat. That fuelled hopes
that Cargo contained the real goods, but the latest numbers would seem to
tell a different story.
A total of 588 kilograms of kimberlite from JI-CG1-02 have now been
processed, along with another 336 kilograms of kimberlite from JI-CG1-01.
Combined, the two samples weigh about 925 kilograms, and the rock yielded
223 diamonds, including 43 macros. Included in that number were six macros
that were greater than 0.5 millimetre in two dimensions, along with at
least two diamonds that were longer than one millimetre.
Unfortunately, those two largest diamonds had originated in the first tiny,
19-kilogram Cargo sample, which means that there were no particularly large
diamonds in the remaining 900 kilograms of rock. As a result, it seems
disappointing that a majority of the kimberlite freight at Cargo seemed
little more than excess baggage. Nevertheless, the rock at Cargo appears to
be composed of at least two kimberlite facies, and Twin finds encouragement
in the fact that there appeared to be higher-grade sections along the
length of the hole. It would be significantly more encouraging if the
richer rock was confined to a particular section of the kimberlite body, as
could be the case at Freightrain, but it is yet too soon to say if Cargo
will produce a similar result.
Although the latest diamond counts might seem disappointing to others,
Hermann Derbuch, Twin Mining's president and promoter, was his usual
optimistic self. He noted that AMEC had cautioned against comparing the
diamond counts with those from other deposits, saying such comparisons
would not be meaningful, due to what Mr. Derbuch termed the unique nature
of the Jackson Inlet diamond deposits.
Mr. Derbuch said that a key factor contributing to the unusual nature of
the diamond counts at Jackson Inlet is that the lower quality and smaller
diamonds were resorbed to a significant extent. That would have reduced the
size of the diamonds to some degree, but would also have significantly
lowered the numbers of smaller stones, skewing the size distribution toward
larger diamonds. That seems reasonable, although Jackson Inlet may well not
be entirely unique. Ashton Mining of Canada has produced diamond counts
from its Renard cluster of kimberlites that seem heavily skewed toward
larger stone sizes, and a few of the Ekati pipes also had a similar size
distribution as well. In any case, investors would now seem to have enough
diamond counts from the two Jackson Inlet pipes to compare and base their
own conclusions upon, without straying further afield.
Unique or not, only a larger sample will help answer the question of just
what the grade of Cargo might be, and perhaps prove AMEC and Twin Mining
correct. Mr. Derbuch seemed willing to take up the challenge. "We have
proven it at Freightrain, and we will eventually prove it on Cargo as
well," he stated, adding that the 20-tonne sample recommended by AMEC was
definitely in the cards for later this year.
Like Freightrain, the Cargo kimberlite can be found just beneath the
surface, covered by a layer of broken limestone about one metre thick. As a
result, taking the sample should not pose much of a problem for Twin, which
grabbed significantly larger portions of kimberlite from Freightrain last
year, as well as a 20-tonne sample a year earlier. If Twin does manage to
take the sample this year, it would be a good sign that the company indeed
has the faith in Cargo that Mr. Derbuch's optimism would suggest.
Nevertheless, the top priority for this year will be drilling the remaining
anomalies on the company's Jackson Inlet property. Twin has one dozen such
targets, but the company will be taking things slowly, rather than rushing
into a drill program. Twin Mining is expected to conduct a ground
exploration program over the targets, including magnetic and gravity
surveys, along with soil sampling. The results of that work will help point
the way to the best drill sites. Mr. Derbuch said that Twin would drill at
least one 200-metre hole into each anomaly, and more were possible,
depending on the result from the first hole. "Our objective is to define
large tonnages of highly diamondiferous kimberlite," Mr. Derbuch said.
That might be interpreted as a slight slip in importance for Freightrain
and Cargo, but drilling the remaining anomalies seems a reasonable and
prudent next step at this stage, especially for a junior explorer such as
Twin Mining. Nevertheless, additional work will be required to properly
delineate the complex Freightrain kimberlite, as well as to test the
relatively unexplored portions of the kimberlite. That work can wait until
the additional anomalies are tested and the merits of Cargo are determined,
but Mr. Derbuch said that additional drilling of Freightrain was a distinct
possibility for later this year as well.
If Twin can actually accomplish all of that this year, the market should
have a much clearer picture of the Jackson Inlet play, which has so far
managed to produce some high-quality diamonds from two pipes that appear to
have a modest grade at this point. To ultimately prove its play, the
company will have to advance at least one of its kimberlites to the next
plane. That would involve extracting a bulk sample and completing a proper
valuation of the diamond parcel to back up anecdotal comments about the
apparent high value of the stones. First, Twin would want to be certain
that it is testing the right portion of its best kimberlite before it
attempts such a costly program.
In the meantime, speculators remain undecided about the Jackson play.
Twin's shares rallied early this year, hitting a high of 82 cents in early
February, but since then, the stock has declined to about half of that
peak. The latest news seemed to be quite in line with the market's latest
expectations, as Twin remained unchanged Wednesday, closing at 45 cents. |
