Twin Gold Corp - Twin gets company in Ungava area
Twin Gold Corp
TWG
Shares issued 44,829,072
1999-11-05 close $0.45
Monday Nov 8 1999
UNGAVA GEMS SPARK INTEREST
by Will Purcell
Twin Gold Resources Ltd. recently announced the diamond counts
resulting from caustic fusion analysis of several kimberlite samples
taken from dykes on the company's diamond prospect near Alluviaq
Fjord on the east shore of Ungava Bay in Northern Quebec. The
company acquired the property early this summer, and has moved
rapidly to assess the potential of several outcropping kimberlite
dykes, and to develop a diamond exploration program.
Late in September, Twin Gold announced that grab samples from
the Torngat-2 and Torngat-3 dykes were highly diamondiferous. A
total of 10.86 kilograms of kimberlite, which was collected from
rubble at the base of the dykes, was submitted to Lakefield
Research Laboratory for caustic fusion and 26 diamonds were
recovered, of which four were considered to be macrodiamonds,
with one dimension exceeding 0.5 millimetre.
The most recent results revealed that 16 diamonds were contained
in additional grab samples weighing a total of 26.94 kilograms that
were collected from the two dykes. Of the 16 stones, five were
classified as macrodiamonds, and three exceeded one millimetre in
length. Of those, one was 1.85 millimetres in length. This latest
sample shows a significantly lower microdiamond count, but the
macro to micro ratio and size distribution appears to be more robust.
Taken as a whole, a total of 42 diamonds have been recovered from
37.8 kilograms of kimberlite, including nine macros and at least
three macros larger than one millimetre. Based on these very small
samples, the dyke material appears to contain 1,100 diamonds, 240
macrodiamonds, and about 80 stones larger than one millimetre per
tonne of kimberlite. The ratio of macrodiamonds to microdiamonds
is 0.27 to one, again based on a very small sample.
The results continue to show promise, and compare fairly well with
the early results from economic diamond deposits in the Northwest
Territories. Caustic fusion results from over two tonnes of
kimberlite taken from Aber Resources A-154 south pipe revealed
1,400 diamonds and 520 macros per tonne. There were 136 stones
larger than one millimetre per tonne of A-154 south kimberlite, and
the macro ratio was a robust 0.54 to one. The A-154 south pipe is
one of the richest in the world, with a grade well in excess of four
carats per tonne.
Comparisons with Aber's A-154 north and A-21 pipes yield even
closer results. A-154 north contained 1,350 diamonds, 400 macros,
and 90 one-millimetre stones per tonne, while the A-21 body
contained 790 diamonds, 220 macros, and 60 one-millimetre
diamonds per tonne of kimberlite. The macros to micro ratios for
these two pipes were also robust, at approximately 0.4 to one. The
grade of both Aber pipes is well in excess of two carats per tonne.
The latest sample confirms the earlier finding that the diamonds
were of high quality. Of the 42 diamonds recovered, 93 per cent
were classified as white, with the remainder being off-white, and 86
per cent of the stones were transparent. Early diamond recoveries
from the high quality Snap Lake deposit of Winspear Resources and
Aber suggested that 44 per cent were white, and an additional 3 per
cent were off-white. Approximately 88 per cent of the Snap Lake
diamonds were classified as transparent. The data does fuel hope
that any large commercial-sized Torngat diamonds might carry
considerable value, as the Snap Lake diamonds are valued in excess
of $100 (U.S.) per carat.
There is a certain folly in interpolating the results from very small
samples to the body as a whole, and the data is far from statistically
relevant at this juncture. No meaningful assessment of the economic
viability of the project is prudent, or even possible at this stage.
Nevertheless, the diamond counts so far suggest that the dykes are
highly diamondiferous, and the size distribution of the diamonds
indicates that at least some commercial sized stones can be
expected.
Twin Gold also received the diamond counts from caustic fusion of
a much larger sample collected from the larger Torngat-1 dyke. The
data, released in mid-October, indicated that 112 diamonds had been
recovered from 212.2 kilograms of kimberlite. Of these, 13 were
considered to be macrodiamonds, and one measured 1.65
millimetres in length. No formal indication of the colour or clarity of
the stones was offered, but they were apparently of high quality as
well. Dr. Bruce Jago of Lakefield said, "The high proportion of
white and transparent stones compares very favourably with
microdiamond populations elsewhere in Canada."
While the Torngat-1 diamonds may have been of high quality, the
distribution of larger stones is somewhat disappointing at this stage.
It was a small sample from Torngat-1 that triggered the interest in
Ungava diamonds, when a 1.5-millimetre diamond was recovered
from a sample weighing approximately 25 kilograms. Based on the
results to date, Torngat-1 appears to contain just over 500 diamonds
per tonne, with only 60 large enough to be considered
macrodiamonds. No counts were provided for stones larger than one
millimetre, but it seems likely that between 10 and 20 stones would
exceed this size in a tonne of kimberlite. Again, the sample size is
still too small to be statistically relevant, even though it is nearly ten
times larger than the sample from the Torngat-2 and Torngat-3
dykes.
The more southerly Torngat-1 dyke is approximately 2.5 metres
wide, and is visible throughout a 300-metre cliff. The dyke has been
traced for over 1,500 metres on land, as well. These dimensions
alone would suggest that nearly three million tonnes of kimberlite are
possible, and the dyke appears to be open in length and depth. The
Torngat-2 and Torngat-3 dykes are much narrower, but are in close
proximity to each other. The Torngat-2 body is approximately 0.6
metres in width, and the Torngat-3 dyke is about one metre wide.
These two sister dykes are separated by approximately three metres
of gneissic host rock. Should the kimberlite ultimately prove to be
economic, a mining operation would be required to remove the host
rock as well, resulting in a significant dilution factor, as
approximately two-thirds of the mined rock would be considered
waste.
Late in October, Twin Gold announced a further discovery, to the
south of the three existing dykes. Four larger dykes were identified,
and a 27.48-kilogram grab sample was analyzed and found to
contain seven microdiamonds. Again, these dykes were visible
throughout the nearly 450-metre cliffs, and may be as large as three
metres wide. The number of diamonds recovered was lower than
the rates for the more northerly dykes, although the quality was
again very high. After this discovery, Twin Gold added still more
land to its holdings, and now holds 444 square kilometres in the
area.
Twin Gold has moved quickly to acquire property and commence
exploration in the area, and has apparently produced results of
sufficient quality to generate interest in the region, as several junior
explorers have hopped aboard the Torngat train. Twin Gold's initial
claims covered a 50-square-kilometre region around the initial
discovery area, but the company tripled its land holding in August,
and doubled it again in September to hold a total of 331 square
kilometres in a contiguous block, before the most recent addition.
Meanwhile, other juniors sprung into action.
In late September, Marum Resources Inc. acquired a
57-square-kilometre block adjacent to the Twin Gold property, and
has continued to add to its holdings in the area. Marum performed a
satellite image analysis of the region, and selected property with
similar features to those on the Twin Gold claims. Marum president,
Richard Boulay, said that the company was planning a remote
sensing program, and stated that a number of the participants might
contribute to such a program. Marum is best known for its
Chinchaga gold and diamond prospect in northwestern Alberta, and
has acquired some diamond exploration experience as a result. In
addition to the Marum block, Mr. Boulay said that he had acquired
an additional 61 square kilometres of claims for International Tower
Hill Mines Ltd., and the two companies might possibly form a joint
venture to explore their properties. Mr. Boulay was optimistic that
many kimberlites would be found in the region, which he described
as being limited by Ungava Bay to the west, and the Torngat
Mountains to the east. He stated, "I will bet you that there are
blowouts and pipes there as well." He added that one advantage to
the region was the relative lack of soil, which makes identification of
potential targets possible, both visually and through remote sensing.
The vertical nature of the dykes would make any future mining
operation rather easy, Mr. Boulay said, adding that vertical dykes
would be easier to mine than a horizontal body. He envisioned a
vertical shaft, with crosscuts to access the ore. He said that having
the entire milling operation underground would perhaps be the most
efficient operation, with conveyor belts carrying the processed rock
out into the fjord. He stated that it was also possible to have an
initial open pit operation at the surface, but he said that would be
conditional on whether or not it would be better to leave a crown
over the workings.
Dumont Nickel Inc. was also soon on the scene. The company
announced in late October that it had acquired claims totalling 233
square kilometres in the region, with one larger block contiguous and
southeast of the Twin Gold block, and a smaller section contiguous
and northwest of Twin's claims. Dumont is new to diamond
exploration, but has some experience in the area. The young
company had acquired properties in the Lac Rocher and Lac Raglan
areas of northern Quebec earlier this year. Dumont has plans to
carry out remote sensing over its diamond play during the winter,
and will commence a surface exploration program next summer.
Ayrex Resources Ltd. has also joined the fray. The company staked
92.5 square kilometres of ground northeast of, and adjoining the
Twin Gold property. Ayrex plans to conduct a surface geological
examination and sampling program with an estimated budget of
$250,000. The move by Ayrex is curious, as the company had
previously devoted itself to the oil and gas sector. Ayrex had sold off
several assets recently, and apparently had plans to acquire a
telecommunications company and abandon the resource sector.
These plans fell through, and Ayrex now hopes to be a diamond
miner.
Copper Hill Corp. is yet another junior exploring for Ungava
diamonds, and appears to have been the first on the scene. In late
1996 and early 1997, the company staked four claim blocks in
northern Labrador, about 100 kilometres to the northeast of Twin
Gold's find. Copper hill conducted an exploration program during
1998, and seven suspected lamprophyre dykes were mapped and
sampled. Stream sediment and soil samples were also collected
through the claim blocks in the region of the dykes to further define
the extent of potential diamond indicator minerals. On Friday, the
company announced it had discovered its first kimberlites. Samples
from at least two of the dykes indicated they were kimberlitic, and
contained diamond indicator minerals. Copper Hill plans to collect
approximately 150 kilograms of sample from each dyke to be
submitted for caustic fusion analysis to check for the presence of
diamonds. The company also plans an exploration and sampling
program on the property.
Marum shares have shown some strength in recent months. The
stock rebounded from a December, 1998, low of 5.5 cents to reach
26 cents in late April. A summer swoon took the shares back below
10 cents, but an early fall rally took Marum briefly back above the
25 cent mark in mid-October. Marum closed the week at 15 cents,
unchanged on the day. Dumont commenced trading in late February
in the 45-cent range, and reached a late spring high of $1.23.
Dumont shares declined steadily during July, as drilling progressed
on its Lac Raglan property without success. The stock dropped
below 20 cents in August and has since remained fairly flat until a
recent rally began on the strength of the kimberlite news. Dumont
closed the week at 36 cents, up six cents on the day.
Investors have paid little attention to Ayrex over the past year. The
very thinly traded Ayrex stock had declined to a low of 10 cents last
December, but last traded at 25 cents in late October. Copper Hill
shares have also been very thinly traded on the OTC market over
the past year, but interest seemed to suddenly pick up in
mid-October. The share price perked up as well, climbing from five
cents to 27 cents early this month. Copper Hill closed the week at
15 cents, down three cents on the day.
The company responsible for most of the interest in the Ungava
diamond play has turned in a better market performance than its
competitors. Twin Gold declined steadily throughout much of 1998
and the first half of 1999, reaching a low of 8.5 cents in June. The
move to diamonds sharply reversed that trend, and the
announcement of positive results quickly took Twin Gold shares to
the 72-cent mark in late September. Interest has recently cooled
somewhat, and the stock closed the week at 45 cents, unchanged on
the day.
With the prime activity season stretching from May 15 to early
October, work over the next several months will take place mainly
behind the scenes, although Twin Gold does plan to conduct a
magnetometer survey over its property. Mr. Boulay said that many
of the explorers will meet in Quebec City near the end of
November, and perhaps some agreement will be reached on sharing
data, and pooling resources for surveys. As well, Twin Gold has
apparently collected additional, larger samples, and the caustic
fusion analysis results from these may be released in the coming
months. The size of the larger diamonds so far found in the small
samples is encouraging, but still larger ones must be found in these
bigger samples. If a few macrodiamonds larger than two or three
millimetres are found, perhaps large enough to be reported in
fractions of a carat, it seems likely that next summer will be a busy
time indeed on the shores of Ungava Bay.
(c) Copyright 1999 Canjex Publishing Ltd.
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