Investor's Digest November 6th Story on the Alberta Diamond Play written by George Werniuk:
Three explorers worth exploring
There's not only gold, but diamonds in those hills
October 14 was a historic day for the Canadian mining industry as it marked
the opening of the Ekati Mine, Canada's first diamond producer.
BHP Diamonds Inc., which holds 51 per cent, Dia Met Minerals Ltd., holding
29 per cent, as well as the two discoverers are the owners, with BHP
operating the mine in the Lac de Gras area of the Northwest Territories 300
kilometers northeast of Yellowknife.
The discovery of diamonds in the area in 1991 set off an exploration rush
whose consequences are still being felt today.
The success of diamond exploration in the Northwest Territories led to
diamond fever in other parts of the country.
Ashton Mining of Canada Inc. (ACA-TSE, $1.30, 604-983-7750) in a
joint-venture with Pure Gold Minerals Inc. and the Alberta Energy Company
Inc. discovered kimberlites (rocks that host diamonds) in the winter of
1997 on its Buffalo Hills property in the Buffalo Head Craton of northern
Alberta.
Some of these kimberlites contain diamonds, and a new diamond play has
developed.
Troymin Resources Ltd. (TYR-ME, $0.35 1-800-557-1545) acquired 100 per cent
ownership in five land packages totaling about one million acres in the
Buffalo Hills Craton that are strategically located with respect to the
Ashton Group properties.
These five land packages are so attractive that Monopros Ltd., (a wholly
owned subsidiary of De Beers Consolidated Mines Ltd., the world's leading
producer of diamonds) entered into a joint venture with Troymin for these
properties.
Monopros has the right to earn a 51 per cent interest in the five blocks of
ground by spending at least $5.5 million on exploration and development by
February 28, 2002, of which $0.5 million must be spent by February 28, 1999.
Monopros can earn a further four per cent interest by financing Troymin's
share of a full feasibility study for the construction and development of a
mine.
By arranging financing for Troymin's share of the development costs of the
first mine, Monopros may earn an additional five per cent interest,
resulting in ownership by Monopros of 60 per cent and Troymin 40 per cent
in the joint venture.
Monopros will begin a drill program when the ground freezes to test the
most prospective targets. This program will certainly put Monopros over the
top for its first year financial commitment.
Troymin has a 50 per cent interest in several other properties in and
around the Buffalo Hills Craton area.
It also has varying interests in properties in the Northwest Territories,
Quebec and the Yukon.
As of June 30, 1998 the company was debt free and had $2.1 million in
working capital. There are approximately 21.9 million shares outstanding.
Share prices have hit a high of $1.07 in April at about the time the joint
venture with Monopros was announced, but the shares are now trading near
their 52-week low of around $0.35.
Watch for the price of the stock to increase if drilling results are positive.
PS- Its getting colder in Alberta- minus 5 in Edmonton- about time!!!
REgards
Tom |
