Ashton Mining of Canada Inc - Street Wire
Ashton's Artemisia still a market favourite
Ashton Mining of Canada Inc ACA
Shares issued 48,702,025 Jan 21 2002 close $4.040
Tuesday Jan 22 2002 Street Wire
by Will Purcell
Some new diamond counts from the Nunavut diamond play sent the shares of Ashton Mining of Canada to a new high on Friday, as investors apparently remained bullish about the company's chances of coming up with a mine in Canada's North. That new-found enthusiasm, which propelled Ashton to an intraday high of $4.15, is undoubtedly a welcome change for the company's long-term shareholders, who have seen similar speculative frenzies come and go in the past.
Ashton shares hit an all time high of $6.75 in January of 1998. At that time, it was the Alberta diamond play that had captivated the market's eye, as Ashton completed a number of mini-bulk samples that returned modest grades, but somehow managed to maintain the optimistic expectations of investors. Those high hopes disintegrated late that year, as Ashton obtained a disappointing result from a larger mini-bulk sample, taken from what was then believed to be the best pipe in the region. By September of last year, an Ashton share could be had for less than 50 cents.
That began to change as Ashton began to turn up promising kimberlites on its Nunavut properties. Within days, the company had made two kimberlite discoveries in the North Slave region. The first one, named Potentilla, was located on the Kikerk Lake property, where Ashton is paying the bills to earn a majority interest in the project. The second one, dubbed Artemisia, was discovered on the Kim property, about 15 kilometres to the west of Potentilla.
The actual discoveries initially did little for Ashton's struggling share price, but the diamond counts had a much greater impact, and the promotional fires were stoked anew. The Potentilla numbers were available in late October, and the Artemisia counts followed in early November. The news that the two finds were significantly diamondiferous triggered a turnaround in Ashton's slumbering stock, as the company's followers climbed back aboard the bandwagon. The Potentilla results sent Ashton's stock back to the $1 mark, while the Artemisia counts took the stock to a high of $1.35. Speculative interest has continued to grow since then, as a healthy mix of encouraging news from the Quebec and Nunavut plays, along with a few dollops of promotion, have seemingly restored Ashton to its former glory as a hot play.
The recent enthusiasm may be a bit premature however, as it is still far too soon to tell if Artemisia and Potentilla can actually make the grade. That determination will require a series of larger samples, which are likely to be completed this year. In the meantime, a comparison of the latest numbers would seem to suggest that although Artemisia has some potential, the samples taken so far are certainly not comparable with those from the best kimberlites that have been discovered in Canada's North.
So far, about 332 kilograms of Artemisia kimberlite has been processed, and Ashton has recovered 1,241 diamonds that were larger than a 0.1-millimetre cutoff. Of those, 120 were classified as macrodiamonds, with one dimension longer than 0.5 millimetre. A total of 38 diamonds were large enough to remain on a 0.5-millimetre screen, and two were sufficiently large to remain on a one-millimetre mesh. Four of the diamonds are believed to have measured longer than one millimetre.
Based on the samples, the Artemisia kimberlite contains about 360 macrodiamonds per tonne of rock, and about 115 macros, using the more stringent definition that requires two dimensions exceed 0.5 millimetre. The sample results also suggest that a tonne of Artemisia kimberlite contains about six diamonds large enough to remain on a one-millimetre screen, although there could be significant error in that calculation, due to the small sample sizes. Those larger macrodiamonds were an encouraging sign, but none of them were large enough to attract much notice. The largest Artemisia diamond was longer than one millimetre in three dimensions, but the stone probably weighed only about 0.01 carat.
With one notable exception, the results from Artemisia are generally comparable with those from the Anuri kimberlite. Anuri was also discovered in the North Slave region last year, by Kennecott Canada and its partner, Tahera Corporation, about 70 kilometres to the south of the two Ashton finds. Kennecott sent about 656 kilograms of Anuri kimberlite off to its laboratory for diamond recovery, and the rock yielded 937 diamonds larger than the 0.15-millimetre cutoff. That was about 1.4 stones per kilogram, which was significantly less than the 3.7 stones per kilogram that Ashton had obtained from Artemisia, but the two values are not directly comparable, as the Ashton samples used a significantly smaller minimum cutoff, which would inflate the microdiamond counts from its pipes.
The Anuri kimberlite contained 337 macrodiamonds, which suggested that Tahera's pipe contained just over 500 macros per tonne, which was about 40 per cent more than Ashton had recovered from Artemisia. Using the more stringent definition of a macrodiamond seemed to favour the Ashton results however. Anuri contained 61 diamonds that were large enough to remain on a 0.5-millimetre screen, or just over 90 stones per tonne. That was about 20 per cent less than the number that Artemisia has produced per tonne of rock.
At still larger sizes, the comparison again favours Anuri however. The samples taken from the Tahera pipe contained diamonds large enough to remain on a one-millimetre screen at the rate of about 14 diamonds per tonne, which is more than double the rate of occurrence of similar stones in the Artemisia samples, although the samples are perhaps too small to attach much importance to the latter result.
By far the biggest difference between Artemisia and Anuri is the size of the largest diamond recovered from each kimberlite. The largest Anuri stone weighed a whopping 0.75 carat, which dwarfs the largest Artemisia diamond, which weighs perhaps one point, or 0.01 carat. The presence of that one large stone might just be a fluke, and it is also quite possible that Ashton has just been more than a bit unlucky in that Artemisia has not yet produced any larger diamonds. Nevertheless, the limited amount of data available would still seem to suggest that Anuri has a somewhat coarser diamond size distribution curve than does Artemisia.
Kennecott and Tahera found a second kimberlite in the immediate vicinity of Anuri. The new find was called Anuri East, and it was also significantly diamondiferous, although not to the same degree as the main Anuri pipe. Kimberlite samples weighing 129 kilograms contained 109 diamonds, including 34 macro-sized stones, of which five were macros by the more stringent definition. One of the diamonds was large enough to remain on a one-millimetre screen. Based on that, Anuri East contained about 265 macros per tonne, or a bit less than Artemisia, while the two-dimensional macro count was just under 40 per tonne, about one-third of the Artemisia rate. The Anuri East samples contained about eight stones per tonne that were longer than one millimetre in two dimensions, a number comparable with the Artemisia result.
Curiously, neither Anuri nor its sister has done much for Tahera's shareholders. The stock traded as high as 20 cents last summer, prior to the discovery of Anuri and several other northern kimberlites, but the continued good news from the region has not been reflected by the company's share price, which had drifted to a low of 12 cents by early November, just when the Ashton rally was beginning to roll. Since then however, Tahera's stock has recovered some of its losses, closing Monday at 18 cents.
Most of the Artemisia samples were taken from drill core, but about one-quarter of the kimberlite was recovered from surface outcrops and loose fragments at three separate locations that were at least 45 metres distant from the vertical drill hole. The similarity of the diamond counts from the drill cores and the surface samples would seem to suggest that the diamond content at Artemisia is fairly uniform.
That appears not to be the case with Ashton's second kimberlite in the area. The Potentilla samples contained two separate facies of kimberlite, and each had a significantly different diamond population. Samples of the hypabyssal phase weighing 79 kilograms were processed, and Ashton recovered 77 diamonds. Seven of those stones were macros, with three of the diamonds large enough to remain on a 0.5-millimetre screen. Based on that, the small sample contained about 90 macros, and about 40 two-dimensional macros, per tonne.
The results from the diatreme phase were better. Samples weighing 129 kilograms yielded 175 diamonds, including 15 macros and seven two-dimensional macros. That worked out to 115 macros, and 55 two-dimensional macros, per tonne of kimberlite. Included in the mix was one diamond that was large enough to remain on a one-millimetre screen, along with two more that just missed the mark, which suggested that the diatreme phase has a coarser diamond size distribution curve than does the hypabyssal phase.
Although there is encouragement to be had from the Artemisia diamond counts, the numbers do seem to pale in comparison with the better Lac de Gras and Kennady Lake kimberlites, which have grades ranging from one carat per tonne, up to more than five carats per tonne. The potential of those kimberlites was evident in the early stages, not so much from the microdiamond counts, but from the numbers of larger macrodiamonds that were present.
The Hearne kimberlite at Kennady Lake contained 83 two-dimensional macros in just 300 kilograms of material, or nearly 300 stones per tonne, which is more than double the rate at Artemisia. Hearne clearly contained larger diamonds as well. There were at least 15 stones that were large enough to remain on a two-millimetre screen, or about 50 per tonne, and three diamonds weighed at least 0.20 carat. As well, the initial Hearne samples contained 39 diamonds that weighed at least 0.01 carat, or more than 100 per tonne. The latest estimates place the grade of Hearne at about 1.7 carat per tonne.
The Diavik pipes also present a very one-sided comparison. The A-154 South kimberlite contained 1,097 macrodiamonds in 2.1 tonnes of kimberlite, or about 520 per tonne, a number quite similar to the Anuri result, and not that much higher than what Artemisia produced. The Diavik pipe produced large diamonds in abundance, however. There were 287 stones that were at least one millimetre long, or nearly 140 per tonne, which is more than 10 times the number contained in a tonne of Artemisia kimberlite. As well, the Diavik pipe contained three diamonds that weighed more than one carat, and about a dozen stones weighed at least 0.20 carat, a clear sign that A-154 South had a coarse size distribution curve.
Although Artemisia appears not to be in the same league as the Diavik kimberlites, or the better Kennady Lake pipes, it might be comparable with Tesla, a low-grade pipe at Kennady Lake. Tesla yielded 188 diamonds from 245 kilograms, including just 14 that were large enough to remain on a 0.5-millimetre screen. The Tesla sample did not contain much in the way of larger diamonds, as the entire parcel weighed just 0.13 carat. Those counts were significantly lower than those obtained at Artemisia, but mini-bulk samples of the Tesla kimberlite indicated a grade of just less than 0.4 carat per tonne. At this stage there is certainly no guarantee that Artemisia's grade will even come close to that of the probably uneconomic Tesla kimberlite, but that favourable comparison with the Kennady pipe appears to be the basis for much of the speculative optimism surrounding Artemisia.
Speculators could get a clearer picture of the diamond content of Artemisia fairly soon. Ashton gathered up about 1,200 kilograms of kimberlite from the surface of Artemisia, and the company is running the material through its dense media separation plant to recover macrodiamonds. Those results should be available in the coming weeks, well before the company will have to commit itself to a larger sample. Whatever the result, Ashton will likely take that larger sample this spring, perhaps weighing about 10 tonnes, and that would provide a better indication of Artemisia's potential. Ashton closed up four cents Monday, at $4.04. |
