Hello Goalie, Peter & Alan
The NR caught me a little off-guard as I was not expecting it until tomorrow, so some of what is stated below will be redundant as it was written in part last Thursday and the remainder on Monday. Regardless, good corroboration of what I had written but with less detail. For those who don't want to read about the same thing, there is also some information garnered from a Kim Freeman conversation on Klipspringer which of course the NR did not communicate.
So hope this still of interest.
I spoke with Larry Revitt (President of MIY) and Lisa at Tanqueray last Thursday. They confirmed that Howard Bird (SUF) had done his DAPS which had been attended by about 80 people. Neither could provide a great deal more of additional detail but were able to offer the following:
1. Based on geochemical sampling, a modest amount of micro-probing, Mag and EM survey data and geology, SUF is very enthusiastic about the property's potential.
2. We of course already know that SUF has committed a minimum of $1,000,000 this year to exploration and drilling.
3. The processing of all of last fall's geochemical till samples is not complete, but the majority that have been processed indicate some extremely exciting potential.
4. Previously, the Ptarmigan pipe had only had a 27kg sample analyzed for diamonds which is a very small sample by today's standards. Because of the size of that sample, the fact that it was only a short hole on one localized area, and the fact that 44% of the Chromites probed plotted as sourced from the Diamond Stability Field, it will be re-sampled with a minimum 100kg sample from various areas/phases.
5. The Gooseneck Peninsula is definitely one of the high interest target areas based on SUF's geochemical re-sampling down ice.
6. The analysis of SUF's Glacieologist (Lisa) suggests that much of the north half of the property appears to be under at least two distinctively different layers of glacial till. This is interesting as CAV came up with no trains in this area however, the upper layer apparently has had a masking effect on truly representative soil sampling. In other words, if previous (CAV & DB's) sampling was not taken from a deep enough level it did not likely contain geochemical indicators representative of the contributing bedrock conditions. Hence, previous estimates of the site's potential would have been underestimated or at least inaccurate, based on limited sampling of truly representative geochemical indicators.
7. The north half of the site will therefore be re-sampled with sonic drills down to at least this second layer of till, and probably all the way to bedrock.
8. SUF expect to be drilling priority targets by the third or fourth week of March.
9. The number of high interest areas was not revealed.
10. Aside from the Chromite data on the Ptarmigan pipe, there was no specific geochemical data.
11. SUF is flying a low level helicopter Mag and EM survey now on a tight 100 metre grid and north-south axis. The preliminary findings of this survey are anticipated as early as this week as each day's data is processed and plotted daily on site.
12. All samples will be processed on site and results available within 24 hours.
13. Larry indicated that if he could get his hands on some graphics, maps, plots, etc. he would try to have them posted on MIY's web site. I hope he will include updated Mag and EM survey maps superimposed on geochemical train plots and geophysical relief (lakes) maps. Any such over lays are not only extremely fascinating, but also very promotional. When shareholders and prospective investors can physically see graphic testimony to potential combined with confidence in the operator (SUF), they can not help but get excited by SUF's, MIY's & TQY's prospects.
14. As a matter of interest, MIY has about 45M shares and a solid Cuban gold property asset. TQY brings 22M shares (8M tightly held) and $500,000 to the table. Neither is liable for any investment on Yamba exploration for the foreseeable future and both are carried by SUF for 19.5% share in the play up to a bulk sampling decision I believe. My own observation is that MIY is actively traded while TQY is pretty quiet.
Aside from their NR this morning, SUF's belief in this property was confirmed by their Feb 23rd NR stating, “A number of high interest pyrope garnets with excellent G-10 chemistry that do not relate to the known kimberlite pipes on the property have been recovered. “
Although Howard Bird is notoriously tight lipped, I did call and speak with him. Frankly, I wanted to confirm what I had heard from MIY and TQY, but also to ask a few other questions. I managed to catch him between telephone deals and he was very candid and informative. The gist of our conversation follows.
One caution however, this is my recollection and understanding of what was said and while I attempted to write down everything, some things might have been confused in the translation. Therefore, please DO NOT attribute any of this information as being completely accurate nor sourced from anyone else but me. This is NOT a HB or SUF NR.
We talked about a number of things with our conversation rambling through various subjects so if my summary seems disjointed I apologize. Before I get into it however, the following is probably required. For those of you who have not read much on the subject, I will as concisely as possible summarize some relevant information as I understand it. There are a considerable number of different kinds of kimberlite indicator minerals and no one hard and fast rule encompasses all the known range (geochemical components) of economic kimberlites in which there is considerable variation.
Through experience, experts have refined a system of attractive combinations and key markers, but there are ample exceptions to “the norm” that have proven economic, therefore, this is a tool who's significance can be substantial but not conclusive. There are any number of reasons why key indicators may not be found such as sample source depth, the fraction processed or processing error, so one should not read too much into absence but rather what was found.
Many of you who have followed diamond plays for several years have heard the terms G-9 and G-10 pyropes. This term refers to the relative Cr and Ca content of Peridotitic garnets which have been typically sourced from deep in the earth's crust 100km to 250km below surface in an area believed to be the incubator of diamonds, typically called the Diamond Stability Field. By probing till sourced pyropes and plotting them by their Cr & Ca content on what is called a Dawson-Stephens Plot, the number and quality of the highly sought after sub-calcic G-10's can be reviewed.
I say quality of G-10's as not all are created equal. A few years ago, J.J Gurney and Chris Jennings proposed further segregating G-10's into 10 sub-groups of J-1 higher in Ca through J-10 lower in Ca. Most can have elevated Cr2O3 levels (as low as 2% or high as 13%) but it is the Cr to Ca ratio in G-10's which is critical. Low CaO is considered the dominant indicator of high likelihood of diamond preservation stability field sourcing and higher diamond contents (Gurney 1984). There are some application methodologies to be considered and applied but this is the simplified explanation/rule.
This in no way excludes the significance of some other geochemical chemistry such as the presence of eclogitic garnets which can have less than 2% Cr3O2 or potential for diamond re-absorbtion reflected by the Ilmenite R-factor. It is merely one strong indicator of potential economics.
Typically J-1's to J-3's are considered on the cusp of the G-9 categorization. Alternatively, J-5's through J-7's are considered highly attractive and J-8's through J-10's outstanding. It should also be noted that J-10's in HB's words “are considered extremely rare” by the industry.
Incidentally, Diamet's economic pipes have garnets that plot in the J-5 to J-7 range and Olivenis (sp?) can be plentiful in geochemical trains.
So lets get down to it:
Munn Lake/Margaret Lake (Back Lake Property) - SUF/IAR/KLA
1. G-10 plots here have included pyropes that plot within the J-7 and J-9 categories
2. Olivines are not typically found in large quantities down ice.
3. HB is convinced that the Yuri is sourced from Munn Lake.
4. The Yuri could be sourced from a sill lying at say a 12 degree (shallow) angle but it is considered unlikely.
5. No local dike geochemistry matches the Yuri therefore a sill source is deemed less likely than a pipe.
6. It is believed possible that upwards of three pipes may be in Munn Lake and more in Margaret.
7. HB and SUF have seen geochemistry from all across the NWT and consider the Back Lake property geochemistry to be the most exciting seen to date.
Yamba Lake Property – SUF/MIY/TQY/CAV
1. G-10 pyropes typically plot within the J-5 and J-7 categories.
2. Not many pyropes or other minerals have been probed.
3. Olivines are typically found in large quantities down ice of target areas similar to the DMM property.
4. Illmenites are running 10% to 12% Mg which is considered in the ball park.
5. Processing and plotting of all geochemical till samples will be complete by month's end.
6. Two distinct trains have been identified in the “Gooseneck Peninsula” area with pyropes plotting as noted in #1 above.
7. Another distinct train is observed north of the GP.
8. There appears to be as many as 5 trains north of the Torrie pipe and indications of 6 to 7 EM targets which will be refined through the current north-south survey. The Torrie is part of a known five pipe cluster which make the above observation even more interesting.
9. The Torie will be re-drilled as the indicator train down ice has some of the better chemistry HB has seen in the NWT.
10. Another pipe may be hidden in the lake north of the Torie pipe which as noted, has a distinct and very attractive geochemical train not entirely attributable to it.
11. The Ptarmigan pipe at the north end of the property, will be re-drilled as noted earlier. While never defined by drill, Mag and EM signals suggest that it is roughly 2 hectares, about the size of a typical Diamet pipe.
12. The T-10 pipe will be examined closely as another pipe is believed to lie nearby. Since it is on a small pond, it can be drilled later when ice has made other targets inaccessible.
13. Because the previous geochemical sampling only picked the large fraction and was typically dug from shallow depths and because there is upwards of three glacial till layers on the northern half of the property, it was resampled and all processing and picking is focusing on the fine fraction.
14. Previous east-west fixed wing Mag and EM surveys were flown on a 200 metre grid. Current Mag and EM surveys are being flown on a 100 metre grid on a north-south axis. It is believed that this will avoid the problem previously experienced with Mag/EM signature off-sets and should materially assist targeting drilling.
15. The extensive boulder fields found at the Diamet site do not appear to extend onto the Yamba property and it is relatively easy to negotiate on foot or access with equipment/drills.
16. It is possible the Yamba Lake property might see drilling as early as the third week of March but because of the masking till layers and confused trains, drilling will primarily be based upon promising Mag and EM signatures.
17. In the past, several coincident Mag and EM signatures were ignored simply because no geochemical train was sampled down ice.
In comparing the two properties, in terms of quality of chemistry and geology, HB believes the Back Lake property offers the most exciting chemistry suggestive of very very good economics, with anywhere from 3 to 8 possible pipes. Under similar exploration terms and considering the proximity to Lac de Gras and existing emplacement evidence, Howard believes the Yamba Lake property offers the highest number of possible pipes. Total conjecture of course, with little supporting evidence, but possibly underline POSSIBLY as many as 15.
OK,… take another breadth, cus I ain't finished yet!
I also spoke to Kim Freeman at SUF Friday. As always he was very personable, forthright and informative and was able to tie together some suggestions made in SUF's last NR as well as offer some interesting tid bits that we might all appreciate.
Firstly, he clearly indicated that SUF is very aware that shareholders are frustrated with the lack of intermittent NR's and that this void appears to be at least partially responsible for the lack of share price support. We did not discuss the matter in detail, but I was left with the clear impression that we should be seeing a higher frequency of NR's in the coming months, with another this week.
Another caution before I go on. As before, this post is my recollection and understanding of what was said and while I attempted to write down everything, some things might have been confused in the translation. Therefore, please DO NOT attribute any of this information as being completely accurate nor sourced from anyone else but me. This is NOT a KF or SUF NR.
We also talked about a number of things with our conversation rambling through various subjects so if my summary again seems disjointed, I apologize.
The February 23, NR stated the following:
“Current data suggest that the Leopard and the adjoining M-1 kimberlite system, separated by 9 kilometres, are part of a single 14.5 kilometre system running through very hilly terrain. More than 8 kilometres of this system occur on properties owned 100% by SouthernEra. Regional exploration anomalies detected from kimberlite indicator grains and their mineral chemistry along the strike length reveal high diamond interest.”
Translation: Kim and his team have sampled stream and other sediments between the Leopard fissure on the Rusland farm to the west all the way to the M-1 pipe (9km) on the Marsfontein farm to the east and another 5.5 km, direction and distribution not indicated. They have found consistent indicator minerals of a quality suggesting economic source(s) and therefore it would appear that a strong likelihood exists for one or more fissure like deposits to connect the two distant farms through what is believed to be a corridor of weakness in the earth's crust.
NR: “At present the Leopard kimberlite system has been delineated along a 3kilometre strike length. The eastern 1.55 kilometres (the Ingwe Section), has an inferred resource of 1,980,000 tonnes from surface down to a level of 990metres above sea level. The Ingwe Section is initially being developed at a mountainous section commencing at 1,490 metre level and working to surface. This upper section contains an undiluted resource of 361,500 tonnes grading 70 carats per hundred tonnes. Grades at fissure mines in South Africa tend to remain constant with depth.”
Now most of you are aware that SUF announced several years ago that geochemical samples taken periodically along strike of the Leopard fissure strongly suggested that economic kimberlite appeared to be present along at least a 40 km corridor.
So my inference is the .9 metre average width Leopard fissure contains 1,980,000 tonnes @ .7 c/t = 1,386,000 carrats @ $95/carrat net = $131,670,000 in a 1.55 km strike or $84,948,000 in 1 km. Therefore by admittedly unsubstantiated extrapolation, 40 km = $3,397,935,484 US.
NR: “The Klipspringer exploration program is continuing to the west and the north. A subtle, parallel, 20 kilometre long anomaly exists a few kilometres to the north of the Leopard Fissure system. This is being followed-up with detailed stream sediment and soil sampling.”
Translation: Firstly, there is now at least one known magnetic and EM anomaly coincident with geochemical evidence suggesting that a third fissure north of the Leopard fissure runs at least 20 km west onto the Pruissen farm which would also suggest that it lines up with the pipe found there in 1997. Secondly, I draw your attention to the word “parallel”. We already know that at least part of the Sugarbird fissure runs parallel to the Leopard. Now, there is a strong suggestion of a third fissure running parallel for what would appear to be at least 3 km of proven Leopard strike.
Let us presume that only 20% of the extrapolated resource noted above is duplicated in parallel fissures of similar width and grade. The additional resource value would therefore be: .2 x $3,397,935,484 = $679,587,000 not counting surface gravels, coincident blows or pipes and of course, reasonable proximity to the Leopard should reduce recovery costs as parallel fissures can be mined concurrently.
So the reasonable implication to the share value is $3,397,935,484 + $679,587,000 = $4,077,522,000 x 1.44 = $5,871,633,000 Can / 32,000,000 = $183.49 / share.
Let me see $183.49 / share by my high school math and $6.90 / share in the market.
Fund Managers can add,…. can't they?
Kim also had the following tid bits of interest:
- There is a fissure in the wall of the M-1 pipe meandering back and forth within a diabase dike. Because of its shifting position, actual width has not as yet been determined, but it appears to be of a similar width as the Leopard fissure. No information on strike. The kimberlite in these two intrusions is different and therefore the M-1 does not appear to be a blow but rather a younger pipe intruding a pre-existing dike which intruded a pre-existing diabase.
- Coincident with the geochemical anomalies referenced in the NR, there are at least five circular magnetic and EM anomalies exhibiting the same or similar signatures as the M-1 and its siblings.
- As the NR stated, the new 50tph plant will process, “Over the first four months, a 40,000 tonne bulk sample of Marsfontein M-3 gravels and a 2,000 tonne bulk sample of M-3 kimberlite”. It will then be run up to a production rate from the Leopard fissure anticipated to be 20,000 tonnes/month by January 2000 which should contribute $15,960,000 or $0.50 / share in annual earnings.
- The M-1 has produced a few fancies described as Canary Yellow. In addition, there have been a few pinks and one green.
- The Leopard produces some fancies as well trending more towards the Cape Yellow designation.
- The largest intact gem quality found to date was 99 carrats but had poor colour and inclusions.
- The next largest gem was a 32 carrat which had good colour and few inclusions.
- that large stone that was believed to be shattered by mechanical recovery was in fact intact until it got to the acid leaching circuit. Its many flaws were filled with cementing minerals which were dissolved by the acid and it literally fell apart once the cement was eliminated. It is now believed that its various parts added up to approximately a 200 carrat original weight.
I also hope to get further information on the following three kimberlites referenced in the 1997 AR and will pass along any information.
- Preliminary investigations of the large but irregular Pruissen pipe????????
- Preliminary investigations of the Doornrivier kimberlite ?????????
- Preliminary investigations of the Meinhardskraal fissures and adjacent indicator mineral anomalies ?????????
Certainly, with all that SUF has going in 1999, shareholders should presume to anticipate a steady stream of very positive production and exploration news this spring, summer and fall. I strongly believe MIY, TQY, IAR, KLA and CAV shareholders will be, and should expect to be directly effected by a considerable number of them.
My thanks to Larry and Lisa and especially to Howard and Kim for their patience and assistance. If I find out that I have contradicted anything anyone has said (misquoted) I will certainly be posting a correction.
Regards to all and happy 99 (fingers crossed)
P.S. Peter: February closed with a week of warm weather in the -6 to -10 range and I was concerned, but March has come in with an attitude, -15 to -25 so far. While I don't expect it to last till month's end, a welcome chill for the drillers.
No ice fishing since Christmas. Unless another half crazy friend comes into town for a visit, I will put that off until my little guy is old and tough enough.
Regards |
