George, here is a paper, less diagrams, put together by Dr. Bob. As soon as I get your email address I will send his phone number. Good reading. It was scanned so there may be spelling errors.
WINSPEAR'S CONE SHEET(S)
Ten Questions + Answers by Dr. Bob
1. Location?
Around and under Snap Lake, Camsell Lake area, NWT in the southern group of known economically potential kimberlites. Close to McLeod Bay in the Northeast Arm of Great Slave Lake, it could be serviced with a 50 km all weather road from a wharf in the Bay receiving supplies by barge from Hay River (end of rail). Alternatively it could be serviced by a very short (25km) spur from the Yellowknife Ekati - Lupin winter road (open only from late January to April) and by air (strip not yet built, but Snap Lake will handle float or ski planes in season).
2.What is Winspear's Cone Sheet?
It is a gently dipping conical sheet of hypabyssal (deep seated} highly diamondiferous kimberlite with a centre or locus at a depth of 700 metres. The sheet may not be a complete cone, but the well defined peninsula portion suggests the sheet dips 12 degrees easterly into Snap Lake and could be mined initially by open pit (700,000 tonnes). Much of the sheet will be mined underground over a strike length of 2,000 metres, a down dip ex-tension of 2,000 to 3,500 metres. Snap Lake is shallow (30) metres maximum), and the cone sheet where mined would have a minimum of 60 metres of cover rocks below the lake. The deepest section of the cone sheet would be at 700 metres, posing no insurmountable mining problems. (The Con mine (Mramar) at Yellowknife mines gold ore at 2,000 metres depth beneath Yellowknife Bay in rock with a very comfortable constant year round temperature.
3.How many tonnes of kimberlite ore are proven or drill indicated?
1,648,000 tonnes have been proven by close spaced drilling on the peninsula which juts into the west side of Snap Lake. The ore sheet averages 2.7 metres in thickness.
Basaltic cone sheets in the islands off the west coast of Scotland (Skye, Mull, Ardnamurchan) have proven to be remarkably uniform in composition and continuity. Some are on exactly the same areal scale as the cone sheet at Snap Lake.
By geologic analogy with Ardnamurchan, supported by widely spaced drill holes down dip 3,000 metres from the peninsula and more than 1,500 metres along strike the peninsula cone sheet should have minimum dimensions of 2,000 x 3,000 metres at an average thickness of 2.7 metres.
4.What ore reserves can we expect?
A sheet of kimberlite 1,000 metres by 1,000 metres has an area of 1,000,000 square metres. Multiplying this by 2.7 metres for thickness and 3.0 for specific gravity yields 8 million tonnes per square kilometre. In a block 2,000 x 3,000 metres (6 square kilometres) the tonnage would be 48,000,000 tonnes, as much as the Ekati reserves.
Assuming the ultimate strike length is 5 kilometres (like the Ardnamurchan cone sheets) and the dip length (from the peninsula exposure to the centre of intrusion) is 3,500metres there would be I5 units x 8 million or 120,000,000 tonnes of ore. There will be some wedging as the cone comes towards the centre reducing tonnage slightly.
5. Why did the Winspear Camsell Lake kimberlite form a cone sheet rather than the conventional carrot shaped kimberlite pipe?
The hypabyssal (deep seated) magma rising 250 kilometres from the mantle of the earth was unusually low in volatiles (ffiO, C02). It was more like a mulled still wine than a C02 rich champagne,anditjustfailed to pop the cork in a violent volcanic eruption. In other words,it is a failed kimberlite pipe. The sheet spread out westerly from a centre near the east side, and 700 metres below Snap Lake. It intruded very quietly carrying large undamaged diamonds over an inunense area at a depth safely below the present erosion level. Probably 500 metres of Cretaceous sand (a prominent contanminant in the Ekati pipes) has been eroded, but the Camsell Lake cone sheet appears to be almost intact.
Conventional kimberlite pipes lose about 80 % of their volume (and diamonds) to volcanic blow out and erosion by water and ice. For 65 million years the Camsell Lake cone sheet was safely buried and remains a great uncontaminated treasure yet to be tapped.
6.What is at the cone centre?
Possibly a buried cylindrical kimberlite pipe which could be mined by underground block caving. We assume it is a geometrical point with no ore tonnage.
7.What is the grade of this kimberlite cone sheet?
At present this is defined by two I 00 tonne bulk samples collected several hundred feet apart where the erosional edge of the cone sheet was covered by only 2 metres of glacial drift. The samples were treated in the Kennecott plant at Yellowknife under the same security used for the Diavik samples of Aber. They yielded a grade of 1. 14 carats a tonne (close to Ekati's 1.09 carats/tonne at the Panda pipe now being mined). The Winspear stones are all of gem quality and were evaluated by three Antwerp diamantaires as being worth $301 US a carat ( as compared with $ 120 US a carat for the stones at Panda).
8
S.Are the three large stones (I I,8 and 6 carats) Russian salt?
All the stones in the Winspear bulk sample appear to form a very symmetrical group following the distribution curve for diamonds at Bellsbank South Africa (Rex Diamonds). This is a narrow dyke mine near Kimberley, which has been mined profitably for 50 years, Four percent of the stones by weight at Bellsbank are greater than IO carats. Four percent of the 228 carats of the diamonds in the Winspear bulk sample (I stone) are over IO carats. The Bellsbank diamonds average $290 US a carat, very similar to Winspear's $301 US a carat. Consistently Bellsbank recovers stones of +30 carats and occasionally stones over 100 carats. The same could be anticipated for the Winspear CamseU Lake cone sheet. It may yield a great named stone of over 5OOcarats, Winspear's Northen Light.
9. You have based many of your conclusions about the Camsell Lake cone sheets on an analogy between the Camsell Lake kimberlite setting and the type cone sheets of the islands off the Scottish coast, particularly Ardnamurchan. Do you have other analogies?
The Camsll Lake cone sheet represents one extreme of the behaviour of kids with ice cream cones,a typical kimberlite pipe-the other. The pipe kid balances his ice cream precariously on top of the cone, often loosing much of the ice cream to the sun or rain (erosion) or plops it on the ground (crustal contamination) or has it stolen by a bully (an unwanted early takeover). The cone kid pushes the ice cream safely down into the cone where it can be consumed in its entirety at leisure.
The magma that formed the Camsll Lake cone sheet spread out quickly, smoothly and thinly like dough on a cookie sheet. This promoted rapid cooling and prevented brecciation, feathering, breakage, resorption and overcoating which often affect the gem quality of diamonds in a large kimberlite pipe. In this, as in other qualities, the Camsell Lake cone sheets diamonds resemble those of Bellsbank, South Africa, a dyke which is only one half a metre wide but characterised by large high quality gems. The kimberlite ground mass at Snap Lake is not serpentinized nor clay rich, a distinct advantage in milling and diamond recovery.
One hopes that the kimberfite at Camsll Lake mines cleanly and does not stick to the top or bottom of the sheet which would promote unwanted dilution or loss. This information will only come out as the company gathers a 5,000 tonne bulk sample which, if clean, should yield 5,500 carats of diamonds including 20 stones of more than 10 carats, silencing critics.
10.What is the value of a Winspear share?
The only Canadian comparison available is with Diamet, a 29 % owner of the 10, 000 tonne/day Ekati mine, with a $220 million debt to be repaid. Even if Winspear proves up huge tonnages, it will probably never be n-dned at a rate of more than 5,000 tonnes a day since it will be a very labour intensive operation, somewhat Eke a Cape Breton coal mine.
At 5,000 tonnes/day, Winspear would mine 2 million tonnes a year yielding 2 million carats of large high quality diamonds worth more than $600 million US. This would meet roughly ten percent of the world's annual high quality gem market. Owning 68 percent of the mine, Winspear's shares should be more valuable than Diamet's, providing there is no excessive share dilution in achieving production.
The present price (-$2 a share) relates in part to problems of permitting. These should be minimal as the underground mine is well understood in the Yellowknife area (Con, Giant, Ptarmigan, Discovery, Lupin) and the cone sheet could be developed as a long lived envirorunentally sensitive operation, employing a large local workforce for a life time. There is widespread disbelief in the size, grade and quality of the stones soon to be resolved by a 5,000 tonne bulk sample. There are uncertainties regarding tonnage and uniformity to be resolved by this winter's drilling. There are difficulties of financing a diamond mine in a post Bre-X, Asian depressed market.
To my mind none of these uncertainties, though real, are insurmountable. Winspear's shares should climb a wall of worry to an appropriate level of $20-1 00 a share.
R.E. F. November 1998 |
