TAH-t...in the news.
Tahera's northern plays show more hope
Mon 5 Nov 2001
Street Wire
by Will Purcell
Some healthy diamond counts and an unexplained mineral train generated new
hope on two separate fronts in the Nunavut diamond play for Tahera
Corporation and its partner, Kennecott Canada Exploration. The diamond
counts are the latest in a series of promising results in an area located
about 250 kilometres to the northwest of the Ekati mine. The region has
long been explored, but it is just recently begun to generate some
encouraging and certainly promotable discoveries.
Although several independent explorers have found diamondiferous
kimberlites in the area, two companies controlled by Rio Tinto figure
prominently in a majority of the discoveries, which might just make
cooperation a bit easier in the future. Meanwhile, the location of a new
train of kimberlite indicator minerals provides reason to hope that
Kennecott will find additional kimberlites in the Jericho region, located
about 150 kilometres to the northwest of Ekati, an area that remains the
best bet to ultimately produce a diamond mine for Tahera.
Tahera's latest diamond counts came from Anuri East, but the original Anuri
kimberlite still seems to be the best of the new finds. Hopes that Tahera
might have a chance at a second diamond play began in mid-July, when the
Kennecott discovered the Anuri kimberlite on the Rockinghorse property, on
which Kennecott can earn a 62.5-per-cent interest by paying all the
exploration bills until a feasibility study is completed.
Although the Anuri anomaly seemed rather small, the initial diamond counts
provided a sign that the kimberlite pipe might contain some larger
diamonds. The initial batch of kimberlite contained a reasonably high
number of microdiamonds, but the best news was that four of the diamonds
that had been recovered from the 276-kilogram sample were large enough not
to have fallen through a one-millimetre screen.
The partners took some additional samples, and when all was said and done
for the year, a total of 656 kilograms of Anuri kimberlite had been sent
for processing to Kennecott's Thunder Bay laboratory. A total of 937
diamonds had been recovered, using a 0.15-millimetre cutoff, or just over
1,400 per tonne. Of those, 337 were microdiamonds, with one dimension in
excess of 0.5 millimetre.
The additional samples seemed to support hopes that Anuri would have some
larger diamonds in its kimberlite. There were 61 diamonds that were large
enough not to fall through a 0.5-millimetre mesh, or just under 100 per
tonne. Nine of those stones, or about 14 per tonne, were of sufficient size
not to fall through a one-millimetre screen.
The big news from Anuri was that one of those nine larger macrodiamonds was
quite large indeed. The diamond weighed an impressive 0.75 carat, which is
a very unusual find in a kimberlite sample weighing less than 700
kilograms. Very few kimberlites have yielded stones of that size in samples
of a similar size, although most of the potentially economic discoveries in
Canada's North have contained similar finds. The large Anuri diamond is
probably a bit of a fluke, and Anuri's future will likely depend on just
how representative the current results are of the kimberlite as a whole.
Even if the Anuri kimberlite manages to make the grade, the ultimate fate
of the Nunavut play will likely depend upon finding enough economic rock to
make it worthwhile. Although much more drilling is required to determine
the geometry of the kimberlite, at this stage the size of Anuri seems
typical of many pipes in the area, with a diameter of just over 100 metres.
If that holds up, and if Anuri turns out to be a steep-walled pipe, it
might contain up to 10 million tonnes of kimberlite. It is unlikely that
even that optimistic estimate would be enough to warrant a mine, which
makes finding more kimberlites a high priority.
As a result, the results last week from Anuri East are highly encouraging.
Those diamond counts did not quite match the results from Anuri, but once
again there is reason to hope that Anuri East will have a fairly coarse
diamond distribution curve and some larger diamonds. A total of 68 diamonds
were recovered from about 78 kilograms of kimberlite, including 18
macrodiamonds.
Those numbers were smaller than the results from Anuri. The Anuri East
sample contained about 265 macros per tonne, just over half the number that
had been recovered from Anuri, but the size of the Anuri East sample is far
too small to provide a meaningful picture of the actual diamond content.
Although just two of the Anuri East diamonds were sufficiently large not to
fall through a 0.5-millimetre screen, one of them was big enough to remain
on a one-millimetre mesh, generating hope that Anuri East will have some
larger diamonds as well.
The two Anuri kimberlites are not the only hopes that Tahera has in the
region. As summer drew to a close, Kennecott and Tahera discovered their
third kimberlite on the Rockinghorse property. The Qamutiik kimberlite is
located about nine kilometres to the northwest of the Anuri twins, and
Kennecott managed to poke two holes into the body, recording kimberlite
intersections of 59 metres and 78 metres respectively. That should be
enough to provide a few clues about the diamond content of Qamutiik, but
the diamond counts are still outstanding.
The three finds and the diamond content of Anuri and Anuri East provide
sufficient reason for Kennecott and Tahera to go back to Rockinghorse next
year with bigger plans and a larger budget. Only a larger sample will
determine if Anuri has a potentially economic grade like Tahera's Jericho
pipe, or if it is a lower-grade dud like the JD/OD-3 or Contwoyto-1 pipes.
As a result, it seems likely that the partners will take a small mini-bulk
sample from Anuri next year and do more drilling on Anuri East. If the
diamond counts from Qamutiik warrant it, more drilling could be done there
as well.
Kennecott is the Canadian exploration arm of Rio Tinto, and another company
owned by the London-based mining giant has been making news in the area of
late. Rio Tinto owns about 68 per cent of Ashton Mining of Canada, thanks
to its successful takeover bid for Ashton's parent company, Australia-based
Ashton Mining Ltd. The acquisition of Ashton last year left Rio Tinto
holding about two-thirds of the shares of Ashton Canada.
It was the Australian assets of Ashton Mining that Rio Tinto was after, not
a stake in the Alberta diamond play or Ashton Canada's seemingly lacklustre
properties in Canada's North. As a result, Rio Tinto put its Ashton Canada
shares on the block this spring. Little has happened since then, and no
prospective buyers have made public an expression of interest. Meanwhile,
Rio Tinto participated in a financing deal for Ashton Canada this summer,
putting an additional $2-million into Ashton's coffers through the purchase
of 2.95 million shares by two Rio Tinto subsidiaries.
A number of things have changed for Ashton since early this year, most of
them for the better. The company now has renewed hope in Alberta, and a
developing play in Quebec, but it might just be some encouraging
discoveries in Nunavut that ultimately catch the eye of Rio Tinto and its
subsidiary, Kennecott.
Ashton has been working a number of properties in the area since the
mid-1990s, but the company had little success in the past, coming up with
just two kimberlites on the Ric property through the years, only one of
which was actually diamondiferous.
Things changed for the better this summer, with the discovery of two new
kimberlites in the area. The first bit of encouragement came from the
Kikerk Lake property, which is located about 50 kilometres to the north of
Tahera's main discoveries in the area. So far, about 208 kilograms of
Potentilla kimberlite have been processed, yielding 252 diamonds larger
than 0.1 millimetre.
Like the Tahera results, there was an indication that Potentilla might
contain some larger diamonds. The best results came from the diatreme phase
of kimberlite. Rock weighing 129 kilograms contained seven diamonds that
remained on a 0.5-millimetre screen. At least three of those stones were
longer than one millimetre, and one diamond was longer than two
millimetres. That stone may have weighed 0.02 carat, or even a bit more.
Ashton obtained what seems to be an even better result from its Artemisia
kimberlite, which is located to the west of Potentilla, about 60 kilometres
to the north of the Anuri kimberlites. The initial kimberlite sample from
Artemisia weighed 103 kilograms, and it contained 380 diamonds larger than
0.1 millimetre. Of those, 38 were longer than 0.5 millimetre in one
dimension, and 13 of the stones were large enough to remain on a
0.5-millimetre screen. Two of the diamonds were longer than one millimetre,
and the largest stone exceeded one millimetre in all three dimensions,
weighing perhaps a bit over 0.01 carat.
Like the results from the Tahera property, Ashton's diamond counts are
sufficiently encouraging to warrant more work and larger samples, but the
samples are far too small to provide more than hope about the ultimate
grade of the kimberlites. If both Ashton and Tahera manage to beat the long
odds and find economic kimberlites in the area, the investment that Rio
Tinto holds in both projects could make cooperation between Ashton and
Kennecott an easier task, and it might even provide the basis for forming a
wider partnership.
Rio Tinto does appear to be interested in the Nunavut play. Through
Kennecott, the company has spent about $20-million on the Tahera properties
through the years, and the company restructured its option deal with Tahera
this spring. Furthermore, Kennecott and Tahera struck a deal that will
allow Kennecott to explore the Jericho property over the next few years.
That work has already begun, and Kennecott has discovered a new train of
kimberlite float material that appears to terminate about 900 metres to the
west of the Jericho pipe, with a suitable geophysical target in close
proximity. That target will certainly be explored during the coming months,
and Kennecott hopes to test at least 20 kimberlite targets next year.
All of that seems to suggest that Rio Tinto remains a believer in the
northern diamond plays, and that should augur well for a busy drilling
season later next year. As well, Rio Tinto is not alone in the area. De
Beers continues to work the Knife Lake pipe, owned by Rhonda Corporation,
which is located between the Ashton and Tahera discoveries. Although the
initial counts from Knife were not up to the levels of Anuri, De Beers has
taken a larger sample and the macrodiamond counts are expected soon.
Hope seems to be returning to at least some of the diamond plays, as Ashton
shares took a leap on the latest round of good news. The stock had been
trading below the 50-cent mark in September and for 85 cents to end
October, but the counts from Artemisia sparked a wave of optimism that
carried the stock to a high of $1.35 last Friday.
Only time and larger samples will say if the optimism of Ashton investors
is warranted. Meanwhile, Tahera's shareholders appear to be taking a more
cautious approach. Tahera shares closed October at 13 cents, and the
diamond counts from Anuri East carried the stock to a high of just 15
cents. |
