Hello Chuck
Just a few thoughts to augment Walt's and Spence's info from (https://www.siliconinvestor.com/readmsg.aspx?msgid=6628607). They give a fairly good summation of everything. Although Spence is getting a little exuberant with some of his numbers, much of what he says is essentially close to the mark.
What is probably worth adding to the discussion is the following:
1. Barging supplies from Hay River to McLeod Bay is a distinct possibility but one must consider that the Federal Government has had a Land Withdrawal for a National Park proposal for this area of Great Slave Lake for several decades, which shows few signs of advancing quickly. The park proposal does not include the north shore or waters of McLeod Bay but until finalized I would suggest that this should not be considered likely. Barging to a north shore bay west of Utisingi Pt. On the Pethei Peninsula is probably less controversial but one must keep in mind that this is a completely unpolluted and pristine sports fishing area with significant natural values immediately adjacent to a proposed National Park. Therefore, any such proposal would probably still earn the ire of environmentalists and the Dene communities of Lutsel K'e and Fort Reliance. Not a good footing to try to start an NWT mine proposal on therefore I suggest a variation on the alternate servicing route would probably be more likely.
2. The GNWT (Territorial Government) is currently evaluating and undertaking feasibility studies and environmental impact analyses of several new all weather road routes in the NWT. One of these is proposed to extend the end of the Ingraham Trail east of Yellowknife up to the Lac du Gras area and on up to Bathurst Inlet on the Arctic Ocean. This road would obviously make existing mines more economic and significantly increase the potential of developing both innumerable established and yet to be discovered ore bodies, not to mention immeasurably improving tourism potential.
3. The currently proposed corridor cuts about 25 to 50km north of Winspear. However, should potential mines shape up both at Snap Lake, at Kennedy Lake (Monopros/Mountain Province), Munn & Margaret Lake (Southernera/Kalahari/Island Arc), and Thore Lake (Highwood Resources), then I submit that it is entirely likely that these sites stand a reasonably good chance of being directly serviced by all weather road. From a collective mining and tourism perspective, such an all weather road linking Yellowknife, these mines, recreation parks, Great Slave Lake, the Barren Grounds and Arctic Ocean would be preferable and more economically viable.
4. The land around Snap Lake is all highly exposed and eroded granite, with very little overburden / ground cover. No mudstone or graywacke. In fact, apparently the reason the smallish and very nondescript kimberlite float was so easily found on surface is that its brown weathered colouring contrasted significantly with the predominant pink background granite bedrock and boulders.
5. As Spence suggests, there probably has been significant erosion of overlying sediments, graywacke and granite. He suggests about 500meters however depending on the circumstances, this figure could be low or high. I'll get into the reasons I suggest this later.
6. There are three visible diabase dykes in the immediate area of Snap Lake. Two north-south trending and one east-west. I mention this as typically NWT kimberlites have been found in association with dyke swarms.
7. Snap Lake is shaped very similarly to Great Bear Lake (much larger), with the two east arms forming a bit of a crab claw. The east-west trending dyke parallels and repeatedly meanders back and forth across the east-west trending Snap Crackle Fault both of which run through the uppermost “claw” and on through the middle of the north portion of SL, paralleling the north shore. This is probably a Proterozoic (common) but possibly Archean fault both of which are widespread on the craton and predate known NWT kimberlites. I have questioned local very experienced Geologists and experts from NRCan in Ottawa and opinions differ on their depth. Some suggest that they typically plunge no more than about 8 to 20km then run horizontally, others suggest that they may penetrate through to the Moho or even the Mantle, as the diabase dykes are believed to do.
8. No petrographic studies have been conducted and therefore no WSP kimberlite age is available, however, no NWT kimberlites have been found to be older than 120my to my knowledge, and typically 70my to 30my is the norm. It may be possible that WSP's is older but the SC fault, in my mind, makes this unlikely, as I will explain later.
9. Presumably then kimberlite emplacement followed the diabase dyke and/or, possibly the SC fault, as it would be the path of least resistance.
10. Now, WM suggested that 670,000 tonnes of ore is potentially open pitable on the west peninsula. What I do not believe has been discussed however, is the more important possibility of a similar but larger resource on the north shore. If you project the theorized cone circumference, a significant portion occurs under the north shore.
11. Three north shore drill holes have been driven on the most northwesterly portion of what is presumed / projected to be the circular limit of the model conical kimberlite sill/dyke. These were relatively widely spaced and all intersected hypabyssal kimberlite of similar facies and width at the approximate depth anticipated by the conical model.
12. While the rest of the north shore that may contain the remainder of the suggested kimberlite sill/dyke has not been drilled, it is reasonable to anticipate that if the geologic model holds true to form, next year's drilling MAY confirm the existence of a significant additional open pitable resource.
13. If it does, the model implied north shore target area is roughly five to seven times the area of the west peninsula, which suggests that an open pitable kimberlite resource of at least another 3,350,000 tonnes might possibly be proven, up to the 70 meter max. depth economic open pit cutoff.
14. While confirmation of grade and value consistency through an extensive bulk sampling program is extremely important, in my view, any possible additional open pitable resource is probably the most important factor that will make or break the market's long term interest in this deposit, and limit significant dilution of WSP shareholder's equity for mine development. Give or take a couple hundred thousand, such an additional open pitable resource assuming all other data remains consistent, establishes the possibility of a speedy mine development pay back of a year or two, as $1.3 billion US might be recoverable on a volume mining basis over a limited period of time. In effect, this makes debt financing feasible and dilution potentially unnecessary.
15. Now WM indicated that WSP had drilled numerable holes where their previous geologic model and the slope of the various sill intersections suggested the central feeder pipe should be. Of course the pipe has not been found. There is by the way, no mag low any where near where the pipe was anticipated.
16. So, is there a pipe and if so, where is it? Up until now, I had the impression that WSP had drilled the lake bottom into swiss cheese but WM's maps dispelled that. I did get the impression however that a “shot in the dark” drilling approach has been followed. Regardless, after reviewing WM maps I now believe there could still be one or more pipes in Snap Lake, and they may be large by NWT standards.
17. Why? Let's get back to that SC fault. WM had a large Snap Lake ground-mag map up on the wall. While these are notoriously unreliable for pin pointing NWT kimberlites in general, that is typically the case where pyroclastic flows have been re-consolidated in the erupted pipe craters. As an example, three of Aber's four pipes and eight of ten Monopros pipes on the adjacent Hardy Lake claims apparently exhibit this trait. Hypabyssal kimberlite (kimberlite magma) typically does display a distinctive mag low and occasionally a mag high signature. Other features such as clay, metasediments and bretcha pipes can also exhibit contrasting low signatures however kimberlites tend to have a very distinctive deep low signature and in this case, the background granite could not give off a more contrasting (high) mag signature unless it were pure iron (illustrative overstatement).
18. The mag map showed a few very small but very deep mag lows scattered around the lake bottom and along the south and southeast shoreline. A few of these were coincident with EM highs and kimberlite float finds, however, most have been drilled with no success or only kimberlite dyke intercepts. In fact, as you know and as previously mentioned a significant number of shallow holes were grid drilled immediately east of the west peninsula in an extensive and tightly spaced pattern with no success.
19. However, that diabase dyke that meanders back and forth across the SC fault reads, as do all diabase dykes, as a distinctive linear high on the mag map. Significantly perhaps, there are two large relatively deep mag lows (bulls-eyes) smack on top of that east-west dyke/fault. THESE HAVE NOT BEEN DRILLED.
20. The diabase is not magnetically visible where these two lows occur. That is to say, it is completely invisible or overwhelmed by the large mag lows. Why these two targets have not been drilled I could not say other than they are geo-physically northeast and north of the west peninsula target area and must have therefore been assumed to be inconsistent with the emplacement model previously being followed.
21. Regardless, they will be drilled, and in my opinion, offer shareholders their only remaining hope of finding a major 6 to 15 million tonne open pitable pipe resource at Snap Lake.
22. What I find particularly intriguing about these two lows and especially the northeast target, are two things. Firstly, how coincident they are with the fault and diabase dyke. They are north and north west and set off from the cone center, but not enough to eliminate them as potential sources of the cone at depth. More importantly in my mind, I can not see how any eruptive event (kimberlite emplacement) could possibly erupt/emplace laterally (sill) in granite on either side of a fault, without also erupting up through the fault either as a dyke or a pipe. Again these faults typically are much older than the known ages of NWT kimberlites and therefore should predate emplacement. They represent the most significant and obvious zone of weakness, much more so than a diabase dyke. How could a kimberlite which is believed to be the most powerful of volcanic eruptions, possibly come up from the mantle through 150km to 700km of craton in a matter of hours, through the tightest and tiniest of openings, suddenly within a few kilometers of the surface, with decreasing restrictive pressure and traveling 300km per hour with expanding CO2, intersect a major fault, and not follow it to the surface?
23. Spence draws some analogies to Basaltic cones in Scotland having similar geometry and suggests that WSP's kimberlite was “low in volatiles” and emplaced/intruded as a “mulled wine” and did not have the explosive chemistry to erupt to the surface.
24. This is very interesting, but opinions are like, well… you know what, every body has one. A kimberlite is not a basalt. Basalt is not typically bretchiated and kimberlites are. Basalts intrude like toothpaste, kimberlites intrude like bullets. Every scientific paper I have ever read on kimberlite emplacement (including J.J. Gurney) and every expert I have ever spoken to, all state unequivocally that kimberlites erupt violently. Diamond preservation requires that kimberlites make their journeys quickly and cool quickly or diamonds convert to CO2 or graphite. There is no getting around that. It is apparently a geophysical geochemical fact proven by detailed analysis. Now some might suggest that anything is possible and everything ultimately is theory, and WSP's Russian has suggested that they have found two similar blind cones. However, he did not to my knowledge indicate if the Russian cones have preserved diamonds and are economic. Since I have never heard of any being mined over there, I will presume the answer is no. So, until this new theory is proven, I will put my faith in the expertise of the recognized experts.
25. I also find it very difficult to subscribe to the unerupted kimberlite theory, especially considering the existence of the SC fault and reported relative size and quality of the diamonds. WM confirmed that some reabsorbtion is exhibited as is granite heat alteration, but not a significant amount.
26. Therefore, one of three things must have happened.
27. Firstly, the kimberlite predates the SC fault, which would make it the oldest known NWT kimberlite. It is completely eroded and was likely fed through numerous narrow vertical fissures all over the bottom of Snap Lake. While I am sure there are fissures, I find this age very unlikely as the cone does not appear to have been off set by the SC fault (no down-dip change) and no kimberlites have been found to be that old in the NWT. No more than a few hundred meters of ABZ's, DMM's or MPV's pipes have been eroded and there is no reason to believe WSP's is any different.
28. Alternatively, the kimberlite is much younger than the SC fault. Emplacement followed the diabase dyke but could not overcome the strength of the granite until within a few hundred meters of the surface at which time it started to form a classic kimberlite cone but stalled due to pressure relief or venting through numerous but narrow kimberlite dykes. This is very possible, but there is only limited evidence of kimberlite dykes outcroping. In addition, why would the kimberlite not erupt through the fault which it appears to bisect? It is the path of least resistance?
29. Finally, it erupted up the diabase dyke or SC fault as a classic kimberlite pipe(s). The conical sill/dyke would most likely be a failed ore shoot or possibly a root zone. The majority of the pipe could still be intact or eroded as Spence suggests, if most of the upper rock unit was a Cretaceous or Devonian sediment. If this model theory holds true, WSP will find a pipe(s) somewhere along the SC fault most probably in association with one or both of those two untested mag lows. Again, the fault is the path of least resistance and the most likely host to a kimberlite.
30. If no pipe(s) are found then the bottom of Snap Lake must be laced by narrow kimberlite dykes too narrow for the mag map to differentiate.
31. Spence is probably correct when he suggests that an underground mining operation probably would not operate at more than 5,000tpd even with multiple adits on the south, north and west shores. There would be some dilution as a narrow parallel sister sill does exist on the west peninsula. Regardless, considering the possibility of the larger northern openpitable resource, if ore consistency can be established, I now suspect that payback could be quick enough to consider debt financing which would excite market interest as share dilution would not be necessary.
32. Two other points. Walt indicated, those holes drilled at the cones modeled centre intersected kimberlite, but it was more than 150 meters deeper than the model suggested. Walt suggests that this may be due to faulting of the sill, but there is no evidence of such a fault and if that were true, I do not believe the sill symmetry would be as consistent as it is in three directions. In my opinion, this intersection suggests more of a champaign glass or daffodil emplacement geometry for the sill.
33. Finally, WM indicated that the land/geology all around Snap Lake is essentially raised or swelled slightly higher than the more distant surrounding geology/land. SL has no major drainage system connection (no river in). This may just be coincidence, but it is suggestive of volcanic uplift or swelling.
Hope the above was of interest and please excuse the spelling errors. That is not my strong suit.
I look forward to hearing the results of drilling those two fault related mag lows and to the establishment of an open pitable resource on the north shore. If the valuations and ore consistency hold up, WSP shareholders may yet have reason to check out beachfront in the Bahamas.
Regards and have a Merry Christmas
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