Diamonds North hunts diamonds and clues at Blue Ice
Diamonds North Resources Ltd DDN
Shares issued 13,047,885 Sep 17 close $0.65
Thu 18 Sept 2003 Street Wire
Also (TEK)
by Will Purcell
Diamonds North Resources and Teck Cominco continue to poke away on their Blue Ice diamond play on Victoria Island. The resulting string of diamond counts that will be spread over the next several months will likely generate several more questions, as well as providing a few answers. The partners have sent over two tonnes of material taken from several kimberlite bodies scattered along the 15-kilometre Galaxy Structure, which runs in a northwesterly direction across the northern part of the Blue Ice property. Although the amount of rock available is unlikely to produce diamond counts that will provide any definitive answers about diamond grade, a few promising batches could go a long way toward advancing the project to the mini-bulk stage. Teck and Diamonds North recovered kimberlite from 11 Galaxy bodies, but just five of them accounted for most of the rock. For the most part, the largest samples came from the kimberlites that had produced the better results during the 2002 program that Diamonds North had completed, before the deal with Teck, but a significant sample was also taken from a body that has not been tested since the late 1990s, when the ground was being worked by De Beers. It is no great surprise that the largest batch of kimberlite that has been sent to Lakefield Research for diamond recovery was collected from the Sculptor body, about five kilometres from the southeastern end of the Galaxy structure. Teck and Diamonds North have shipped 656 kilograms of material off to the lab, retaining an additional 300 kilograms of rock for future testing and analysis. Last year, it was Sculptor that produced the best diamond counts from one of the larger Blue Ice samples. Diamonds North processed nearly 209 kilograms of kimberlite, coming up with 254 diamonds larger than a 0.106-millimetre sieve, or about 1,200 stones per tonne. That haul was significant, but it was the size distribution of the stones that offered the real glimmers of hope. In all, 68 of the diamonds were macro-sized stones, and a dozen of them were at least one millimetre long. The detailed sieve data provides a better idea of the favourable size
distribution. There were 67 diamonds large enough to remain on a
0.30-millimetre screen, accounting for more than 26 per cent of the entire parcel, and 34 of the diamonds remained on a 0.425-millimetre mesh, or just over 13 per cent of the entire parcel. Encouragement was also to be found in the larger sieve classes. There were four diamonds large enough to be recovered by a 0.85-millimetre screen, which is frequently used as the minimum cutoff for mini-bulk samples, and two of them remained on a 1.18-millimetre mesh, which is a cutoff often used in larger bulk samples. The largest diamond measured more than two millimetres in two dimensions, and it may have weighed in excess of 0.03 carat. Although the diamond size distribution of the Sculptor diamonds compares favourably with some potentially economic diamond deposits in Canada, the absolute numbers of stones in the first test were significantly lower, suggesting a modest grade. Tiny samples can be very misleading however, and the current test should provide a better idea of the actual diamond content and size distribution at Sculptor. If the current test produces a result comparable with the 2002 result, Teck and Diamonds North should come up with about 800 diamonds from its 656-kilogram sample. If the larger test produces a significantly greater number of stones, it would bode well for the deposit, as it would suggest that the earlier test had not sampled any richer zones. Alternatively, a number of diamonds well below 800 would imply that the earlier test had been a bit lucky, sampling more of a higher-grade region than the subsequent, larger test. There should be some important size distribution clues in the larger test as well. It would be a good sign if one-quarter of the diamonds recovered by the larger test were big enough to remain on the 0.30-millimetre sieve, and half of those clung to the 0.425-millimetre mesh,. In that case, there should be some larger diamonds in the mix, which would prove far more toutable for Diamonds North. If the sample is similar with the 2002 result, there would be about a dozen diamonds caught by the 0.85-millimetre screen and six left clinging to the 1.18-millimetre sieve. As well, it would be reasonable to expect at least one or two larger stones to be found in the larger test, perhaps remaining on a 1.7-millimetre mesh, with dimensions in excess of two millimetres, or more. If Sculptor can match or beat the earlier results, the body, which was discovered in the fall of 2002, would be a prime candidate for a still larger test next year. Teck and Diamonds North also appear to have high hopes for the Snow Goose kimberlite, which was discovered and subjected to a small test by De Beers in 1997. Teck and its partner sent 565 kilograms of kimberlite off to the lab for testing, and they are keeping another 580 kilograms in reserve. That should provide the first real indication of the potential of Snow Goose, as the De Beers test was a curious mix of modest counts and larger stones. That initial test was thought to have sampled the Gosling body, but a closer look at the actual location of the drill site indicates that the rock had been taken from the fringe of Snow Goose, which is just over 10 kilometres to the northwest of Sculptor. De Beers processed 151 kilograms of kimberlite, coming up with just 55 diamonds, or about 365 stones per tonne. That was less than one-third the rate at Sculptor, but there were some larger diamonds that made Snow Goose a target worthy of a closer look. The largest diamond weighed about 0.23 carat, which ranks as the largest diamond recovered from Victoria Island to
date. As well, there were two other two-dimensional macrodiamonds
recovered, and at least one of them may have weighed in excess of 0.01 carat, as the entire parcel weighed just over 0.26 carat, and the paltry haul of micros would have contributed relatively little to that total. As a result, the results of the latest sample will be very interesting, but also entirely unpredictable. The total microdiamond counts in the initial test were modest, and there is a good chance that the latest test will deliver an increase in the number of stones per tonne. Far more important to the chances of Snow Goose will be the presence of larger macrodiamonds however. Although Diamonds North and Teck will likely not find a stone to rival the 0.23-carat diamond, the presence of several diamonds remaining on the 1.18-millimetre sieve would likely be enough to attract the notice of the market, especially in view of the earlier result. As well, the partners are processing 35 kilograms of kimberlite from Gosling, which is in the immediate vicinity and had been thought to be the source of the promising larger Snow Goose diamond until this year. The proximity to Snow Goose could still be a hopeful sign, and signs of a favourable diamond size distribution from the tiny sample would likely prompt more work next year, especially with a good result from Snow Goose. Meanwhile, the partners have shipped at least 250 kilograms of kimberlite from three other bodies off for processing. That includes 276.5 kilograms of kimberlite from Sand Piper East, with another 630 kilograms kept in reserve. It was a tiny sample of kimberlite from Sand Piper, near the southeastern end of the Galaxy structure, which went a long way toward reigniting interest in the Victoria Island diamond play. Although Diamonds North did not manage to duplicate the result last year, the partners still have hopes for the kimberlite complex. In 1997, De Beers came up with just 28 microdiamonds from 162 kilograms of kimberlite, but it was a far different story last September, when 6.49 kilograms of material
delivered 118 diamonds with a size distribution that seemed quite
comparable with that at Sculptor. As a result, the parcel contained some larger stones, including five diamonds large enough to remain on a 0.85-millimetre screen, including two that clung to a 1.18-millimetre sieve. Another 77 kilograms of material produced just 30 diamonds however, and the size distribution of those stones was no match for the first tiny test. Therefore, the significantly larger test should provide a better idea if the tiny initial sample last year was just a stroke of luck, or if there will be additional zones within the Sand Piper complex that have a higher grade. Diamonds North and Teck will be processing 256 kilograms of kimberlite from Pegasus, which a few kilometres northwest of Sand Piper, parallel and adjacent to Sculptor. Pegasus was another 2002 find, but its diamond counts were short of the levels of its neighbour. Diamonds North processed over 336 kilograms of kimberlite, coming up with just 52 diamonds. The size distribution also was not as healthy as Sculptor's, but one of the diamonds was one millimetre long, and that helped prompt a closer look, as small samples have occasionally produced misleadingly poor results in the past. The last of the larger tests was taken from Snow Bunting, another of the old finds made by De Beers. The 1997 find is about one kilometre southeast of Sand Piper, at the southeastern end of the Galaxy structure, and it produced some conflicting sample results as well. De Beers is believed to
have recovered just 23 microdiamonds from about 137 kilograms of
kimberlite, but Diamonds North had a happier result last fall, coming up with 15 diamonds in less than 17 kilograms of sample. The haul was far too small to provide much insight into the size distribution of the 2002 parcel, but there were signs of encouragement, as three of the stones remained on the 0.425-millimetre screen. Helped along by the more toutable result last year, the partners have sent 279 kilograms of rock to the lab and are keeping another 168 on hand for possible future testing. Two other bodies have been subjected to tests in excess of 100 kilograms. The Vega kimberlite, also near the southeastern end of Galaxy, delivered 22 diamonds from a 20-kilogram sample last year. That was too small to provide any real indication of the diamond content or the stone size distribution, so Teck and Diamonds North are processing 125 kilograms this year, with an equal batch kept aside. The partners are also processing a 105-kilogram batch of rock from a 2003 discovery, the SLT-4 kimberlite dike, as well as 40 kilograms from Fornax and 20 more form Orion. Both of the latter bodies were also discovered during the current drill program, and significant diamond counts from any of the new finds would likely prompt a larger test next year. With a significant amount of rock at Lakefield's lab, it will take quite some time for all of the diamond counts to be completed. As a result, speculators should receive a steady stream of data over the next six months, as the partners do not anticipate receiving all of the data until March of 2004. That should keep the Victoria Island diamond play in the news through the long, quiet Arctic winter, which could be helpful to Diamonds North's promotion, if at least some of the results live up to the market's hopes. The company's shares have been trading in a broad range near the 75-cent mark for the past several months, but closed down six cents Wednesday, at 65 cents.
(c) Copyright 2003 Canjex Publishing Ltd. stockwatch.com
Click here for company snapshot:
new.stockwatch.com
Click here for recent SEDAR documents:
new.stockwatch.com |
