Jesse, does this glittering report from TWG mean that: 1) There seems to be a lot of stuff there? and 2) We really will not be geting into it till next summer?
Twin gets company in Ungava area
Twin Gold Corp TWG
Shares issued 44,829,072 Nov 5 close $0.45
Mon 8 Nov 99 Street Wire
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.
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