From Canaccord this morning.!!
* Aber Resources (ABZ : TSE : $10.50 : Issued 45.5M)
Aber has yet to comment on caustic fusion results from the analysis of
four kimberlites discovered in 1998, which brought the tally for
Diavik kimberlites to 53. Other targets, 5-7 anomalies, located about
15 km from the development site remain to be tested, possibly this
year.
We note with some interest via the SouthernEra second-quarter report
that additional "interesting results" have come in microdiamond
analysis of a further 580.9 kg of core from the C-13 kimberlite pipe.
C-13 we believe is located about 20 km SE of the Diavik development
site. The joint venture is comprised of SouthernEra (10%)/Aber
44.4%)/Kennecott Canada (45.6%).
Our previous figures for C-13 were for a 269.3 kg sample that yielded
15 macros and 40 micros for a count of 0.56 macros per 10 kg, and a
macro-micro ratio of 0.38. The new result just published by
SouthernEra, indicates that the analysis of 581.9 kg of core yielded
50 macros and 121 micros, for a count of 0.86 macros per 10 kg, with a
macro-micro ratio of 0.41. SouthernEra added: "Twelve of the
diamonds are greater than 1 mm in their largest dimension, including
four diamonds greater than 2 mm. Further evaluation will continue on
both pipes." In terms relative to Lac de Gras counts, these are not
outstanding figures, but still very interesting.
C-13 was initially discovered in 1993, and to our knowledge the joint
venture has drilled at least seven holes in the C-13 target, six of
which intersected diamond-bearing kimberlite. Drill intersections
range from 6.1 m to 50.1 m in length, but none of the holes drilled
appeared to have intersected the main body of the kimberlite pipe. It
is the indicator minerals recovered from this pipe which have returned
excellent diamond inclusion geochemistry that placed a high
exploration priority on the C-13 target. A further extensive
delineation program was carried out in the fall of 1997, but
apparently has not changed the geological picture all that much: the
puzzle remains unsolved.
Aber/Rio Tinto are expected to file the Environmental Assessment
Application for the Diavik Project itself in the very near term. The
period for response to the Draft Environmental Assessment Guidelines
ended in the past week or so, apparently with no particular surprises.
Production from Diavik is expected to begin late in 2001, and as
outlined in our recent report: Aber Resources - A world class diamond
producer in the making, the stock is trading below our estimates of
after-tax net present value (mid-$teens) and at only about 5X 2002 net
earnings. We may well be looking at cyclical low ranges for mining
stocks, but Aber should be a first priority on resource funds'
shopping list when the tide turns.
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