International Samuel Exploration Corp (C-SAZ) - Street Wire
Int'l Samuel scores a Churchill hit
International Samuel Exploration Corp SAZ
Shares issued 14,195,655 Sep 15 2003 close $ 0.35
Tuesday September 16 2003 Street Wire
by Will Purcell
Conrad Swanson's International Samuel Exploration Corporation has come up with its first kimberlite. The find, on the Churchill West property in which the company can earn up to a 65-per-cent stake, is immediately to the west of the large Churchill property where Shear Minerals, Stornoway Diamond and BHP Billiton have discovered 15 kimberlites this year. Although it has been that latter project that has garnered most of the attention this summer, the first find on the Churchill west property is a hopeful sign that the kimberlite clusters extend westward, into Samuel's area of interest.
As a result, Mr. Swanson could get two cracks at a toutable story for its diamond play near Rankin Inlet in Nunavut. Shear and its partners are expecting the diamond counts from the bulk of its samples in the coming weeks, and even if they fall short of the mark, Samuel should have a second chance, with some counts of its own later this year from its first find.
A Samuel share cost just a nickel late last year, but the North Vancouver-based Mr. Swanson managed to attract new interest to his struggling diamond explorer early this year, first through a series of moves that improved International Samuel's financial state, and then with the acquisition of the Churchill West option in May. All that helped carry Samuel's stock to a peak of 45 cents in mid-June.
The Nunavut diamond hunt has been fertile ground for the promotions of Shear and Stornoway this year, helped along by the presence of Pam Strand and Eira Thomas, who have long been involved with the search for gems and have become media favourites. Diamonds have been a more recent focus for Mr. Swanson however, and with most of the notice directed on the ground farther to the east, Mr. Swanson's promotion had been flagging of late. As interest waned during the summer, the company's shares briefly dipped below the 20-cent mark in mid-August. Things have been on the upswing again in recent weeks however, as speculators seemed to get the jump on the news of a Churchill West drill program, and the quick find of the first kimberlite pipe.
Mr. Swanson was a realtor starting in the 1970s, but in the early 1990s he made the move to Howe Street. Early in 1995, Mr. Swanson was appointed to the board of Goldbank Ventures and made president just days later. Goldbank's shares were trading for less than a thin dime at the time, but things improved dramatically in 1996, when Mr. Swanson and Goldbank bought a private company with coal licences in British Columbia. The company's stock surged as a result, peaking above the 70-cent mark later that year.
The company subsequently pursued a number of metal plays in British Columbia, but the late 1990s turned out to be a tough time to tout mineral plays, and Goldbank's stock had dipped to a nickel by 2000, when it was rolled back on a 1-for-4 basis, becoming Consolidated Goldbank Ventures, and Mr. Swanson moved on shortly after that.
Coal did not work out well, and Mr. Swanson ultimately decided to try a form of carbon with much more sparkle. He first made a detour into the high-tech sector however, when he took control of Speyside Ventures and converted it into TranDirect Holdings, a provider of Internet services for the financial and retail sector.
It took a few years to complete the transition, but Mr. Swanson still seemed to have the jump on the Internet craze. Nevertheless, he had difficulty selling the story to the market, as the company could not seem to penetrate the tough United States market. As a result, the company was transformed again early in 2001, becoming International Samuel the diamond hunter.
International Samuel's first Churchill West kimberlite hit appears reasonably substantial. The discovery hole was drilled at a 45-degree angle, hitting kimberlite at a vertical depth of about 10 metres, and was still in kimberlite at a vertical depth of about 50 metres, producing roughly 60 metres of drill core. Samuel and its partners will be shipping much of that off for processing, and diamond counts should be available later this fall.
The find is about 50 kilometres to the north of the 15 kimberlites that Shear and Stornoway have found on the main Churchill property. The Churchill West discovery apparently lies on an eastward bulge of the property, while the cluster of finds on the main Churchill claim block lie on the southwestern portion of the large 600,000-hectare property. The first 11 finds were scattered across an area about 30 kilometres from east to west, and about 15 kilometres from north to south, and the next four discoveries were made another 15 kilometres to the north. With the new find at Churchill West, the area of kimberlites now covers a substantial region.
Shear and its partners are still waiting for the diamond counts from their 15 kimberlites, but the news was not good on the Meliadine property, just south of the Churchill ground, where Cumberland Resources and Comaplex Minerals discovered 11 kimberlite bodies this year. Ten of the kimberlites were tested for diamonds, and nine of them proved to be barren, with just one producing a haul of three tiny microdiamonds. That result let some of the air out of the Churchill promotions, but the result may not say much about the diamond content of the 15 finds on the Churchill property, or the first discovery on Samuel's western block.
The main Churchill property produced a considerable amount of geochemical hope over the past few years, and because of that, Shear and its partners believe that the diamond prospects are far better on their ground. The surface sampling programs produced quite an array of indicator minerals, including eclogitic garnets and pyrope garnets with a high proportion of G-10s, above 40 per cent, which are considered indicative of a diamondiferous source.
The mineral chemistry is a favourable sign, but Shear's drill targets were selected primarily on geophysics, rather than a detailed surface sampling program, although the targets that produced the four latest finds appear to have been selected in areas with favourable chemistry. There is no certainty that the recent discoveries lie at the heads of the swaths of indicator mineral promise however, and that might lower the chances that the current crop of discoveries will produce an impressive parcel of diamonds. Even if the recent finds are duds, the prospects of the Churchill property would still seem bright, based on the geochemical results.
That situation is also the case on the Churchill West property, which has seen some airborne geophysics, but comparatively little in the way of surface sampling. The geophysics generated 13 targets, and those were checked out in greater detail last month, with three top targets and two possible one making the cut. Those targets will presumably be drilled in the current program. As well, Samuel and its partners plan more geophysics, and they will collect about 300 surface samples to get a handle on the mineral chemistry on the property. All that should cost about $850,000, which will put Samuel well on its way to earning its interest.
The chances of finding a diamondiferous kimberlite on Churchill West seems good, as the limited surface sampling work to date did identify six sites with anomalous numbers of indicator minerals. As well, as the ice movement was generally from the northwest, some of the indicator minerals on the western portion of the main Churchill property might conceivably have originated from a source on the western property. In any case, the region should remain quite active for some time to come.
Soon after the company changed its name to International Samuel, Mr. Swanson quickly picked up a number of diamond properties, and the company added some directors that were more familiar with diamond exploration and promotion. One of International Samuel's new directors, John Fraser, may have played a role in introducing Mr. Swanson to his ultimate Churchill partners.
Ms. Strand's Shear and Mr. Fraser's Mantle Minerals had rival properties in the region, on the eastern fringe of the Slave craton, and their two companies had occasionally cooperated on their respective exploration programs. Mr. Fraser was added to Samuel's board in the spring of 2002, and later that year, Samuel, Dasher Energy and Shear Minerals agreed to an option deal on the Afridi Lake property that Mr. Fraser's Mantle Minerals had been working since the mid-1990s. Little has come of the Afridi play, but the deal did get Mr. Swanson and Ms. Strand working together.
Mr. Swanson also had a previous deal with John Robins's Northern Empire Minerals and Eira Thomas's Stornoway Ventures. Early in 2002, the two companies agreed to a deal with Mr. Swanson's International Samuel and two other junior companies to explore a property in the North Slave region of Nunavut, but so far, there has not been much in the way of promotable news from the Jubilee property.
The terms of the Churchill West deal will allow International Samuel to earn a 65-per-cent stake by issuing 200,000 shares and spending $1-million on exploration over a two-year period, including $500,000 by the end of this year. If the current discovery proves diamondiferous, Samuel would almost certainly complete its earn-in, but in a curious twist, both Shear and Stornoway can buy back a 10-per-cent stake for $100,000 each, and that seems likely if Churchill West produces some glitter. In that event, International Samuel would be left with a 45-per-cent interest.
After a mid-June frenzy that carried Shear's shares to a peak of $1.70, speculators now seem willing to wait for the diamond counts from the 15 finds on the main Churchill property, and the company's shares are now trading in a range near $1. Meanwhile, the recent drilling and subsequent discovery on Churchill West gave International Samuel a boost back to the 30-cent mark. The stock moved up 3.5 cents on Friday, and another 1.5 pennies Monday, closing at 35 cents.
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