To: Steve Joy (507 )
From: bully
Monday, May 10 1999 8:44PM ET
Reply # of 511
Major General Resources Ltd -
Ascot and Major General attack the Northern Flank
Major General Resources Ltd
MGJ
Shares issued 38,065,143
1999-05-07 close $0.26
Monday May 10 1999
Also Ascot Resources Ltd (AOT)
by Will Purcell
Major General Resources Ltd. and Ascot Resources Ltd.
await the results of the 1999 spring exploration program on
their Victoria Island diamond project being conducted by the
project operator, Monopros Ltd. Monopros can earn a 51 per
cent interest by spending $2-million in exploration over three
years. Monopros spent $350,000 in 1998 and the current
budget is estimated to be $450,000. Should Monopros
complete the required spending, Major General and Ascot
would each retain a 24.5 per cent interest.
The property, centred about 200 kilometres west northwest of
Cambridge Bay on southern Victoria Island, was originally
acquired in 1994. The ground was selected on the basis of
favourable geology, and the presence of a large regional
gravity low similar to the Lac de Gras area. The companies
initially conducted over 30,000 line-kilometres of high
resolution airborne surveys late in 1993, and the more
prospective areas indicated by these surveys were then staked.
At the time, Ascot had the right to increase its share to 75 per
cent by financing the next $1-million in exploration costs.
By early 1998 Ascot had indeed exercised this option. A new
agreement was then struck, which allowed Major General to
earn back the lost 25 per cent by spending $1-million by the
end of 2000. The agreement also allowed the company to
actively seek a third party willing to accept an option on the
property. In a strange twist, it was agreed that if a third party
incurred at least $1-million in exploration expenses, Major
General would also have its interest in the claims increased to
equal that held by Ascot. It was apparent that Major General's
commanding officer, Glenn Shevchenko would actively seek
such a partner. A few months later, Monopros emerged as that
joint venture partner. In 1994, Monopros had acquired a large
property immediately to the north, and the company had
recently discovered several diamondiferous kimberlite pipes.
The prime area of interest on the Major General and Ascot
property was believed to be centred on two detailed magnetic
anomalies, observed a short distance from till sample sites
which returned high garnet counts. Furthermore, these targets
were apparently just to the south of the discoveries on
Monopros ground. As part of the 1998 exploration program,
the joint venture performed percussion drill testing of the main
targets, and conducted preliminary work elsewhere.
The joint venture was not long in reporting its first success,
with the first target drilled resulting in a kimberlite
intersection. By mid-June, five kimberlites had been
discovered after testing only eight targets. The bodies were
named Phalarope, Golden Plover, Longspur, Snowy Owl, and
Whimbrel, in the order of discovery. Approximately 300
kilograms of sample was recovered from each, and
approximately half was sent for caustic dissolution processing
in South Africa. Of particular interest were the Snowy Owl,
Golden Plover, and Longspur kimberlites which were the
targets found up ice from the most promising indicator mineral
sites.
The fall of 1998 saw the diamond counts pour in. A sample
from the lower priority Phalarope contained only six
microdiamonds in 160 kilograms of kimberlite, and the initial
Whimbrel kimberlite weighing 160 kilograms was barren. A
small 80 kilogram sample from Longspur contained eight
microdiamonds and one macrodiamond. Golden Plover was
more promising, with a reported 39 microdiamonds contained
in 160 kilograms of kimberlite. In late October the best results
yet were announced. The Snowy Owl body reportedly
contained 75 diamonds in only 80 kilograms of sample.
A curious development occurred in late November, when
results of additional small samples became available. The
joint venture junior partners released a complete breakdown
of the diamond counts by sizes, for four of the five bodies.
This release of such detailed information was considered
unique, but apparently did not especially arouse the ire of
Monopros, as the results for the fifth body were released using
a similar format some two months later. The detailed diamond
counts confirmed that the three most promising bodies were
indeed the Snowy Owl, Longspur, and Golden Plover. The
largest diamond recovered originated from Longspur, a stone
which did not pass through a one millimetre square mesh.
Monopros also measured the recovered diamonds, and
reported the results using the more familiar Canadian system
which classifies a diamond as a macro if it exceeds 0.5
millimetres in length. The Snowy Owl body contained 90
diamonds, including five macrodiamonds, in 88 kilograms of
sample. Golden Plover returned 44 diamonds, three of which
were macrodiamonds, from 180 kilograms of kimberlite. One
of the macrodiamonds exceeded one millimetre in length.
Longspur sample, weighing 90 kilograms, had contained 39
diamonds. Three of these were macrodiamonds, and two of
those exceeded one millimetre in length.
Results from the two lower priority bodies were far less
promising. There were no macrodiamonds found in either. The
Phalarope body contained six micros in 180 kilograms, and
one lone microdiamond emerged from 180 kilograms of
Whimbrel sample.
The initial results are nevertheless encouraging. Indeed,
Ascot's Ken Carter noted that the average diamond count for
Snowy Owl compared favourably with the initial exploration
results from the Diamet and Aber kimberlites. The results are
not directly comparable however, as the recovery of very
small microdiamonds is better today than even four years ago.
Furthermore, the more important count of macrodiamonds
from the three pipes is markedly lower than the available
Diavik results.
A total of 11 macros were recovered from 358 kilograms of
kimberlite taken from the three high priority bodies, with three
exceeding one millimetre in length. One macrodiamond was
recovered per 18 kilograms of Snowy Owl kimberlite, and a
one millimetre stone was recovered in every 45 kilograms of
Longspur rock.
These figures pale by comparison with the rich Diavik pipe
A-154 south, where one macro was encountered for every two
kilograms of kimberlite, and a one millimetre stone was
present for every seven kilograms of sample.
It should be noted that individual sample results often vary
greatly. The Diavik A-21 pipe, with a grade near three carats
per tonne, contained one macro for every five kilograms, but
individual caustic fusion samples, each weighing more than 80
kilograms, had values varying between one in three to one in
80 kilograms. The A-21 contained a one millimetre stone for
every 16 kilograms of kimberlite, on average.
There does appear to be a poor correlation between diamond
grade and simple macro counts as well. The Tli Kwi Cho pipe
also had one macro per five kilograms of kimberlite, however
the overall grade was less than 0.3 carats per tonne. Core
from the Diavik pipe A-11 north contained one macrodiamond
in every three kilograms of kimberlite, and the resulting
minibulk sample grade for this pipe was a disappointing 0.26
carats per tonne.
The samples collected from the five pipes during 1998 are
almost certainly unrepresentative of the entire body. The
percussion drill program sampled only the uppermost layer of
the five bodies, with penetration depths reportedly ranging
from five to 12 metres. Furthermore, drills of the type used are
known for their habit of breaking larger diamonds. The
macrodiamond counts may be understated for this reason.
The current drill program, which began the third week in
April, will extract eight to 10 core samples from the
kimberlites, possibly to a depth of 150 metres. Caustic fusion
results from these cores should provide a much clearer picture
of the diamond content of the bodies across their vertical
structure.
The results should become available during the summer
months. Of particular interest will be the frequency of larger
macrodiamonds which may be contained in the core samples.
Caustic fusion results from economically interesting
kimberlite bodies generally have contained larger
macrodiamonds. While the 1.76 carat "Aber diamond" was a
rather unique find at the small core exploratory drilling stage,
it has been quite common to see diamonds weighing 0.25
carats or more recovered by caustic fusion of kimberlite from
the more promising kimberlites in Canada's north. The
cumulative sample weights from these bodies submitted for
caustic fusion has generally ranged between one and three
tonnes.
Of interest as well will be a more accurate description of the
size and shape of these kimberlite bodies, and an indication of
the presence of other priority targets that might be drilled later
this year.
Major General stock hit a 52 week high of 53 cents in early
June 1998 with the release of the news that kimberlites had
been found. The share price touched a low of 20 cents in early
March and closed Friday at 26 cents. Ascot also hit its 52
week high in early June, gapping up to $1.06, but declined to a
September low of only 16 cents. The stock has since climbed
slowly, closing the week at 35 cents.
I don't know what this is all about boys
Steve |
