George, I located for staking and final BLM filing of about 20,000 acres and started so to speak just 2 years ago near Maxam Gold which I went to the May AGM 1999 and met Max Cooley and heard him talk. I have the tape, there is really something starting TO BE UNDERSTOOD. From Canada to Arizona, IMHO. KEYS:
<<..Testing and development of analytical protocols are underway in-house and
in facilities at the University of Calgary and various reputable laboratories
and include: - SEM examination of pulps, core samples and process products;
- modifications to conventional wet chemical procedures (including aqua
regia digest) with background-corrected atomic absorption and fire
assay finish; - modified flux fire assays;
- bottle roll leaching with adsorptive recovery of precious metals and
fire assay finish.
Our immediate goal is to improve the analytical procedures under
development to the point that consistency within one or more methods is
achieved. We have retained Max Cooley, a private consultant with 10 years
experience with Barrick Gold in chemical and metallurgical testing and
analysis, to work with our staff and other consultants. Mr. Cooley is a
co-inventor of two patents for gold recovery from carbonaceous/obdurate ores
and consults to a number of mining companies including Maxam Gold Corporation.
Birch Mountain has also engaged an independent third party consulting firm to
audit results of our analytical methods development program...>>
From Wisls last post on the subject. As I type the BMD AGM is going on at 2:30 start time in Calgary, I am expecting a phone call from friends who are able to attend. Best to all at MMU, I hope that some MMU guys showed up there also, it is THE same PROVIENCE! LOL.
Chucka
P.S.- You might benifit from this realtionalship imput( is there such a word guys?)( Rick B- I do respect your creative geology and we may see others in the future comming to ask you questions! IMHO!) between mining and my CURRENT SEC DISCLOSED IR assistance duties for Rhombic Corp: ( Click my S.I. Personal Profile) RE:
techstocks.com
techstocks.com
P.P.S.- I talked with Larry Kryska about the color of diamonds yesterday and what it means to NBL ( New Blue in Alberta etc) for the Cry Lake( Help with Location here- above the West Side of Alberta?) stuff as per the two days old WSP article on the news wires, I can't find the link, it is a must read..edit is closing now..bye!)
CSW info :
Winspear Resources Ltd -
Winspear's "geofantasizing" may continue
Winspear Resources Ltd WSP
Shares issued 39,238,388 1999-06-21 close $3.57
Tuesday Jun 22 1999
BULK SAMPLE'S QUESTIONS AND ANSWERS
by Will Purcell
Winspear Resources Ltd. has now released the much-awaited diamond recovery results from the first of two 3,000-tonne samples, extracted earlier this spring from the northwest peninsula of Snap Lake. The results answered some of the questions surrounding the project, but also served to generate a few new ones.
A total of 3003.9 dry tonnes of kimberlite were processed at the Tahera diamond recovery plant at the Lupin mine site of Echo Bay Gold Mines. A total of 5,542.27 carats were recovered, with a resulting grade of 1.845 carats per tonne. A total of six diamonds weighing in excess of 10.8 carats were recovered, the largest weighing 14.3 carats. The company revealed that a total of 88 diamonds weighing in excess of three carats were recovered. The parcel held a total value of $545,000 (U.S.), and the average value was a respectable $98.42 per carat. The ore had an overall value of $181.58 (U.S.) per tonne.
This sample was extracted from an area adjoining the site of the first pit from which the first of two 100-tonne minibulk samples was extracted and processed last year. The results from the first pit indicated a grade of only 0.848 carats per tonne. Steve Swatton, a Winspear geologist in charge of corporate development, indicated that the largest stone in this 100 tonne sample weighed 6.4 carats. As well, a second stone was recovered that weighed in excess of three carats. Based on this information, the latest results represent something of an improvement over the first pit results from last year.
The sharp increase in reported grade came as a shock to some. At the time the minibulk results were released last year, Winspear indicated that contamination by host rock was a significant problem in the sample from the first pit, artificially reducing the grade, however other factors appear to have contributed to the increase as well. The complete 200 tonne minibulk sample recovered only 1387 diamonds, or an average of seven stones per tonne, whereas caustic fusion analysis of kimberlite taken from drill holes on the northwest peninsula indicated that nearly 44 diamonds were recovered that were sufficiently large so as not to fall through a 1.18-millimetre square mesh. The screen cutoff for diamonds recovered during the current bulk sample is approximately equal to this size. As a result, it would be expected that many more small diamonds would be recovered.
If indeed thirty such small stones were indeed recovered during the bulk sample, they would contribute approximately 0.4 carats per tonne to the reported grade of 1.845 carats per tonne. These small stones would have little or no commercial value, hence the reported value per carat for the latest bulk sample could be considered to be low, as compared to the earlier minibulk results. An approximate commercial value of $125 per carat might realistically be inferred from the latest results.
In response to the question of small stones causing much of the increased grade, Mr. Swatton responded, "Yes, that is what we think". He indicated that the plant appeared to be much more efficient at small diamond recovery than was the Diavik plant, which was used last year. The plant was also kind to larger stones, apparently. Mr. Swatton said that breakage of diamonds during the recovery process did not appear to be a problem, although further study was required to answer this more definitively.
Mr. Swatton declined to comment on whether the overall quality of diamonds equaled last year's results, but he did state that "There was a high proportion of high quality stones in the sample." He noted that the six stones larger than 10.8 carats were all "special stones". A special stone is a diamond that exceeds 10.8 carats, and possesses sufficient quality that it would be cut.
Mr. Swatton said that the company was pleased with the high number of diamonds that were recovered in the two to four carat size range. He stated there currently is a shortage in this size category; a size commonly cut for stones used in wedding rings.
Questions about fancy diamonds have arisen since Winspear first announced in 1997 that a small percentage of diamonds recovered by caustic fusion were coloured green and pink. Mr. Swatton said that this was a natural occurrence for many diamond populations. He indicated that "not all of the stones were white", but added that any coloured stones recovered were insignificant. Winspear president, Randy Turner has repeatedly said that the value of the Snap Lake deposit would lie in clear, white, gem quality diamonds. This appears to be confirmed by the recent results.
The second 100 tonne minibulk sample taken last year contained a higher grade, larger diamonds, and a much higher overall value per tonne than did the sample from the first pit. Some estimates indicate that 75 per cent of the total value came from diamonds recovered from this second pit. If so, the value per tonne may have exceeded $500 (U.S.) per tonne. Two particularly high quality gems were recovered from this second sample, one weighing 10.82 carats, and the other 8.4 carats. A total of 17 diamonds with a weight greater than one carat were recovered from the second pit, as opposed to only eight such stones from the first pit.
Results from the next 3,000 tonne bulk sample are expected in mid to late July. The kimberlite for this sample was extracted from an area adjoining the much higher valued second minibulk pit. Mr. Swatton stated that the company expected a slightly higher overall value from the next sample, due to its proximity to the second pit. He said there was no geological reason to assume that either of the two minibulk pits better represented the value of the dike as a whole. Large, high quality gems are a rarity, and their distribution within a kimberlite is extremely difficult to predict. The bulk sample in general contained stones larger, and in greater quantity than did a comparably sized bulk sample processed by Ekati.
Much work lies ahead before Snap Lake might become a mine. Mr. Swatton said that the company officials would sit down and plan their next steps after the results of the second bulk sample became available. He said the current drill program was now complete, with the last drill hole being completed Sunday night. Results for the current round of drilling, the caustic fusion results of holes drilled earlier this spring, as well as an updated analysis conducted by MRDI Canada would be available later this summer.
There are currently no plans to take a bulk sample from the north shore area, due to logistical reasons. The shallowest intersection of the dyke in that region was apparently 50 metres, which would make the recovery of a sizable sample difficult. Nevertheless, the company will continue to look for a site where such a sample might be possible. The original bulk sampling plan, announced last winter, was to extract three 2,000 tonne samples, including one from the north shore, but no suitable site was found.
Mr. Swatton indicated the company was pleased with the results of the first bulk sample. He stated that the results were not a surprise, although they were hoping for a somewhat higher valuation, perhaps up to $250 (U.S.) per tonne. Mr. Swatton indicated that they expected another 5,000 carats or more, with a value the same, or higher, possibly in the low $200 range. "We really don't know.", he stated. He said Winspear was taking a conservative approach in its expectations, but acknowledged that higher values were indeed possible.
Large, high quality diamonds contribute most of the value given to a parcel of diamonds. Guessing the value of a bulk sample in advance is therefore very inaccurate, due to the random and rare occurrence of these stones. Mr. Swatton said that very little variation was noted across the first 3,000 tonne bulk sample, noting that predicting the occurrence of smaller stones is far more accurate. "Trying to predict grade is harder with large stones.", he said.
Analysts were mixed in their reaction to the news. John Kaiser advised his subscribers holding Winspear to sell, writing, "If you can sell at prices above $3, do so". Mr. Kaiser expects the volatile trading of Winspear to stabilize , "Once the market spin has made the transition from the 'diamond find of the century' to one of a very interesting mine candidate whose project economics still needs lots of serious work".
Sudhir Khanna appears more optimistic, suggesting that the risk has been removed from Winspear, and he expects the stock to reach new highs later this summer. Canaccord analyst David James appears suitably impressed with the results. He writes, "All said, we think we have a new diamond mine for the Northwest Territories...". He recommends Winspear on any pending weakness.
It appears likely that the valuation guessing games, or what Mr. Swatton describes as "geofantasy", will continue among investors and analysts alike, until the second bulk sample results are announced.
While many investors may have been "geofantasizing" about much higher value from the initial bulk sample, one should view the current results in context. Ekati, Canada's only operating diamond mine, contains proven and probable reserves of 66 million tonnes grading 1.09 carats per tonne, valued at $84 (U.S.) per carat, or $91 (U.S.) per tonne. The Panda pipe is the richest, with a total value of $142 (U.S.) per tonne.
The Diavik project of Aber Resources and Rio Tinto has a higher ore value than Ekati. Diavik has a resource of 37 million tonnes with an average grade of 3.5 carats per tonne worth an estimated $55 (U.S.) per carat, or $193 (U.S.) per tonne. The A-154 south pipe carries an estimated value of just over $300 (U.S.) per tonne.
The Kennedy Lake project of Mountain Province Mining Ltd. and Monopros Ltd. appears to have a potentially economic deposit as well. The joint venture is awaiting the results of a bulk sample taken this spring, but results to date suggest an ore value of $100 (U.S.) per tonne, with the Tuzo pipe having a value in the neighbourhood of $150 (U.S.) per tonne.
With the combined results of the bulk samples, weighing a total of 3,200 tonnes, Snap Lake would appear to have a very high valuation, at $193 (U.S.) per tonne.
In addition to the final 3,000 tonne bulk sample results, the revised MRDI Canada scoping study will prove to be of interest to investors. The initial report suggested a profitable open pit and underground mining operation was possible, based on preliminary data. The revised report will have access to much better defined value and tonnage data. There has been recent speculation by some analysts, such as Deutsche Bank's George Albino, that mining rates in excess of the original 1,000 tonne per day mine envisioned by MRDI are indeed possible. The revised report should provide investors with a clearer picture of the scope and potential for the Snap Lake deposit.
Winspear shares were particularly active over the past two weeks, climbing abruptly from the $3.50 range to a high of $5.30 on May 31. The stock traded just under $5 until June 10, when it began a slide, reaching $3.61 on June 15. Winspear closed at $4.05 last Wednesday, at which point trading was halted, pending the release of the sample results. Winspear opened Monday morning at $3.60, and quickly dropped to $3.20 on heavy volume, before recovering to close at $3.57, with well over two million shares changed hands.
(c) Copyright 1999 Canjex Publishing Ltd.
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