Hi Folks! A happy Easter to ye! -- For all, I shall relay here another great response from Rick Boulay:
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Again, thanks for passing on another excellent question.
Re: the magnetic character of the P-1 layer. We are re-evaluating the entire magnetic survey of the area in light of the discovery of dense sulphides in the layer. We now believe that the very positive magnetic expression on Target 9 is caused by the sulphides. Therefore, we have to consider that the entire layer is magnetically consistent, or that it is variable. If it is variable, then what are the controls. We don't know the answer yet but we are working on it. Going back to a vertical pipe model for a moment on, say, the Ashton or Montello properties, lets remember that the anomalies merely represent a representation of the amount of magnetite below the airplane. Some pipes have lots of magnetite, some have less and some have none. The magnetic ones are easy to find but they may not be the best ones for grade, its too early to tell. My guess, just a guess, is at the end of the day about 20% of the Alberta pipes will have very weak to very strong magnetic anomalies and that 80% will not have any useful magnetic expression. Magnetic data is a critically important tool, but its only one tool to be used. Right now, our intelligence suggests that other companies in Alberta are localizing pipes on very, very weak anomalies using other methods.
There may be useful magnetic differentiation within the P-1 layer and in other layers we are studying. If we are correct in interpreting the current data available and the material is again confirmed to have originated from a diamond bearing volcanic source, then it is logical that the diamonds will lie disseminated throughout the entire volume of material. This would logically be true for pyroclastic material which is undisturbed, with the proviso that it would be logical to find more diamonds and bigger diamonds closer to the source of the vent or vents. We also have evidence of volcaniclastic material in the core. This is material that has been re-worked by water. In these cases, its logical to expect depletion of heavy grains in some areas and concentration in other. Magnetics are useful here because magnetite is heavy and should be a pathfinder to grains, like diamond, which have densities that are higher than most of the enclosing material. We need to do more work on the P-1 layer and we await the results of the geochem and diamond related analyses. There is also the matter of expected grades if the unit proves to be diamond-bearing. We have no idea and cannot speculate. In general, pyro/volcaniclastics near productive pipes tend to be much higher in grade than the pipe material. But, we cannot professionally take that observation and apply it to an exploration project in a new setting. As to drilling thousands of holes, why not. Ten little quads equipped with sampling augers can probably drill ten fifteen meter holes a day. Just kidding!
The real answer is that we don't know how to measure this thing at this stage. The first step is to pedigree the P-1 sequence to conform with what "observers" call a "kimberlite". This is for purely business reasons since we have already have ample evidence that the area is prospective for diamonds. One small unaltered olivine grain in the core will likely do the job and confer the official K-blessing on the core. Do we care? Technically, not one bit. Promotionally, for our shareholders it would be nice I suppose, even in this skeptical market. The next task is to recover diamonds, then we'll worry about the rest since the follow-up costs will be very, very low. This is good since it allows us to maintain 100% interest in most of our land position.
Finally, as to predicting the odds of an economic deposit. Not a chance! Doing so would be unprofessional and would probably break the spirit and substance of a number of securities regulations. Besides, its impossible to predict, even for pipes. The current rule of thumb numbers for pipes, ten percent with diamonds, and ten percent of those for mines, is terribly misleading and just plain nonsense. Besides you can't apply global rules of thumb to Alberta. Its unique in that the entire volcanic edifice is preserved. In the NWT, in Africa and in other places most of the volcanic superstructure has been removed by erosion. We are on the exploration frontier here, that's what makes this play so exciting, the risk bearable and the potential rewards enormous.
This might be a good place for a couple of historical examples of past exploration frontiers and how they resolved. I was discussing this the other night with Sudhir Khanna. In 1910, during the first big electrification push, copper was mainly mined from vertical, vein type deposits except for some bedded deposits in Europe and Michigan. Within four years, helped by the return of big equipment from the Panama Canal job, most of the world's copper came from mass tonnage, very large open pit porphyry copper deposits. In 1952, most of the world's uranium came from small, vertical veins and shear deposits. Within two or three years, 100 percent of the world's supply came from horizontal, mass tonnage bedded deposits in Canada and the western United States. Existing mining and exploration models are great tools, but they should not represent barriers to exploration beyond the current frontier.
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Thnx Rick--A grreat discussion!
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Must run -- Cheers,
-j
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