Diamonds North adds a new play
Diamonds North Resources Ltd (TSX-V:DDN)
Shares Issued 27,913,821
Last Close 12/2/2004 $0.75
Friday December 03 2004 - Street Wire
By Will Purcell
Mark Kolebaba's Diamonds North Resources Ltd. has a new grassroots diamond project. The company quietly collected surface samples in an area west of Hudson Bay in Nunavut, and found enough encouragement to warrant the staking of two blocks of ground. Diamonds North has several large projects on the go, although most of them have other companies paying the bills through option arrangements. It is too soon to tell if the company will hunt for a well-heeled partner for its new Tasiq play, or if it will get things rolling on its own dime.
The Tasiq project
Diamonds North seemed to get a jump on De Beers Canada Corp. when it staked the Tasiq property. The project lies about 100 kilometres southwest of Baker Lake, in a region where De Beers holds a large number of exploration permits. One of the Tasiq properties lies on the southwestern fringe of the De Beers project area, while a large De Beers property entirely surrounds the second Tasiq block.
De Beers left a significant amount of ground open in the middle of that block, but that apparently had nothing to do with the merits of the region. De Beers used the permit process to pick up its big land position, and ground bordering on active claims may not be acquired using the permit process. The result was an area measuring roughly 40 kilometres across, which surrounds a tiny claim held by Phelps Dodge Corporation of Canada Ltd.
Mr. Kolebaba said that his company knew that De Beers leaving the ground open had nothing to do with the merits of what is now Diamonds North's Tasiq project. That block, which lies immediately south and east of Mallery Lake, is slightly larger than the second Tasiq property.
That group of claims is near Tebesjuak Lake, about 15 kilometres southwest of the first property. Combined, the two blocks cover about 120,000 hectares of ground. Diamonds North has another major rival with ground near its Tasiq project. BHP Billiton Diamonds Inc. holds a large block of ground about 25 kilometres to the southwest of Mr. Kolebaba's new play.
Mr. Kolebaba said that Diamonds North was testing in the area this summer. He added that the company collected "a fair number of samples," thinking that its rivals may have missed some prospective mineral grains in the barren regions of the Churchill craton.
As things turned out, he could be right. Diamonds North apparently found arrays of indicator minerals in some of its till samples. As a result, Mr. Kolebaba thinks the chances are good that the source for the mineral promise lies on its new Tasiq play.
Mr. Kolebaba said that Diamonds North followed the mineral grains up ice, and a set of samples in that direction failed to produce any grains. That would suggest that the developing mineral train originates somewhere on the Tasiq claims. Based on its hasty first look, Diamonds North has what Mr. Kolebaba terms "an apparent cut-off" to its mineral finds.
As well, Mr. Kolebaba found encouragement in a piece of kimberlite attached to one of the indicator mineral grains. That would also suggest the fragment did not travel far from its bedrock source, offering added hope that Diamonds North will not have far to search for a drillable target on Tasiq. "You don't see a piece of kimberlite stuck on an ilmenite grain very often," Mr. Kolebaba added.
Precisely what Diamonds North found in its till samples is unknown, excluding the kimberlite encrusted ilmenite grain. Mr. Kolebaba was suitably close-mouthed about the mineral results from Tasiq, mainly because the main batch of data are still trickling in. He did say that Diamonds North found more ilmenite grains than its rivals reported from surrounding projects. Although Mr. Kolebaba was not in a talkative mood about the Tasiq mineral grains, they apparently include a wide variety of indicators, with enough promise to prompt the staking of claims.
The area encouragement
The main newsmaker on the Churchill craton continues to be Shear Minerals Ltd. and its Churchill project, parts of which lie just 90 kilometres to the east of Tasiq. The Churchill project continues to generate great chemistry and many kimberlite finds, but very few diamonds, much to the chagrin of impatient investors.
Shear found close to 20 kimberlites in 2003 and six more this year, but all of its finds were barely diamondiferous at best. The company and its partners are finding it a challenge to sort out the sources of its geochemical promise from the abundance of kimberlites on its play. The slow progress is not deterring Shear and its partners, and 2005 is shaping up to be the busiest year yet on their Churchill property.
Shear's inability to produce promotable diamond counts from any of its finds prompted Mr. Kolebaba to note that Shear still had no explanation for its promising chemistry, which would mean that far more prospective kimberlites await discovery.
Perhaps in case Shear and its partners struggle again next year, Mr. Kolebaba observed that Shear's main hunt is taking place nearly 300 kilometres east of Diamonds North's Tasiq property. Still, significantly diamondiferous kimberlites span distances greater than 300 kilometres on the other active cratons in Canada.
The Slave hunt extends well over 300 kilometres from north to south and the Superior play spans an even greater distance. As a result, the indicator mineral results from Shear's Churchill play still offer a spark of promotability to the Tasiq project, despite the distance. That spark would become an open flame, should Shear hit it big next spring.
Shear's main effort is taking place just northeast of Rankin Inlet, near the coast of Hudson Bay, where Hunter Exploration Group first found intriguing arrays of indicators in its reconnaissance samples several years ago. Hunter then passed the play along to Shear and a group that now includes BHP and Stornoway Diamond Corp.
Shear built on Hunter's early promise, collecting several thousand till samples along the way. One of the more promotable aspects of the Churchill hunt is the proportion of G-10s among the haul of pyrope garnets. That fraction tops the 40-per-cent on occasion, attracting the likes of BHP and conjuring up images of Diavik in the minds of speculators.
The Churchill play is also proving promotable farther to the north, where Stornoway and BHP came up with significantly diamondiferous kimberlites near Melville Peninsula. Stornoway's AV-1 outcrop produced the best diamond results so far from the Churchill craton. About 10 tonnes of kimberlite samples delivered about eight carats of diamonds. A BHP pipe about 600 kilometres northeast of the Tasiq play produced a grade of about one-quarter of a carat per tonne.
The Tasiq plan
Just what Diamonds North plans to do with its Tasiq property is unclear. The company is increasingly willing to option out its top projects, giving well-heeled partners a majority stake in the projects, in exchange for them paying the bills.
Teck Cominco Ltd. is a partner on a large part of the Victoria Island hunt that Mr. Kolebaba rescued after he took the top job at Diamonds North in 2002. Earlier this year, Diamonds North picked up two more partners on its big grassroots project south of Kugaaruk in central Nunavut, about 600 kilometres northeast of Tasiq.
Kennecott Canada Exploration Inc. is a partner on the 400,000-hectare Amak property. That project is immediately south of the Amaruq project. That big play now covers close to three million hectares, after Diamonds North and BHP combined their projects in the area.
As a result, Diamonds North might be looking for a willing partner on the Tasiq play. "You have to think De Beers might want that," Mr. Kolebaba said, referring to the gaping hole in the middle of the property held by the diamond giant that now is part of the Tasiq project.
He said that Tasiq might also be something that the company would take a bit further, as Diamonds North was fairly confident the ground has kimberlites on it. The future of Tasiq may well depend on how the remaining samples turn out. "I am hoping it is the start of a whole lot of things," Mr. Kolebaba said.
Diamonds North already has many projects going. As a result, there should be a flurry of news from the company in the coming months, as results come in from the several active projects across the North. As well, Diamonds North will receive the remaining sampling results from its reconnaissance programs at Tasiq and across other areas of Canada. That information will influence the company's plans for Tasiq and determine its priority on Mr. Kolebaba's scheme of things.
Diamonds North has a few other projects without a partner. The company has a play in the northeastern corner of Manitoba that it is still working on its own. It flew a 42,000-line-kilometre geophysical survey over the 360,000-hectare Manitoba Highlands property this year, and the information will keep the company busy through the winter.
Interest in the Manitoba hunt is again on the rise, after a play about 200 kilometres to the southwest petered out a few years ago. Diamonds North could use some promotable news from one of its newer plays. The company's shares traded as high as $1.79 early this year, but dipped below the $1 mark this summer.
Diamonds North slipped four cents on Thursday, closing at 75 cents.
© 2004 Canjex Publishing Ltd. |
