TWG-t...in the news:
Twin's Freightrain delivers tootable numbers
Wed 27 Mar 2002
Street Wire
by Will Purcell
Unlike its experience with a Torngat sample last year, Hermann Derbuch's
Twin Mining Corporation managed to duplicate the grade it obtained with a
larger mini-bulk sample from its Freightrain kimberlite on Baffin Island.
There were a few disappointments with the latest sample, but the news was
largely encouraging, in stark contrast with a similarly-sized sample that
the company had taken last year from its Torngat site, where good news from
the larger sample was hard to find.
Speculators seemed only modestly enthused over the results, but the
Freightrain sample had Mr. Derbuch, Twin Mining's president, talking of a
possible mine at Freightrain. That still seems quite a reach at this stage,
given the modest grade and unknown diamond value, but nevertheless, Twin's
Jackson Inlet play has offered sufficient encouragement that the region
should see another busy year, as the Freightrain complex and several other
anomalies get a closer look.
Twin's 228-tonne sample was taken from six separate sites, and on first
glimpse, the numbers seem fairly consistent. The individual sample sizes
ranged from 76.3 tonnes, down to just 2.5 tonnes, and the indicated grades
of the six samples varied from a low of 0.11 carat per tonne, to a maximum
of 0.34 carat per tonne. In all, the six samples produced diamonds weighing
a total of 46.208 carats, for an average grade of 0.20 carat per tonne.
That result was well in line with the results of an earlier, smaller
sample. Last spring, Twin collected about 18.4 tonnes of kimberlite from
two sites, recovering diamonds weighing 3.644 carats, for a grade of 0.20
carat per tonne. That sample produced a diamond that Mr. Derbuch touted as
Twin's first one-carat diamond, although the actual weight of the stone is
believed to have slipped just under that mark. That diamond, combined with
a 0.768-carat stone that had been recovered from a smaller sample of loose
rock, taken years ago from the surface of Freightrain, had provided hope
that the deposit would yield a significant number of larger diamonds. That
hope was fuelled by speculation that a still larger diamond had actually
been crushed when Twin processed its initial mini-bulk sample last year.
That may well have been the case, but the latest results have lowered the
expectations for larger diamonds to some degree, although Freightrain does
seem to have a healthy diamond size distribution curve. The largest diamond
from the latest sample finally broke the one-carat mark for real, as the
stone weighed 1.577 carats, but it was less than the two-to-five-carat
range that had seemed quite possible, based on the earlier results.
Nevertheless, there were still a significant number of larger diamonds in
the sample. A total of five diamonds weighed more than 0.8 carat, including
yet another stone that fell just short of the one-carat standard. A total
of seven stones weighed at least 0.5 carat, although three others narrowly
missed the mark, weighing at least 0.466 carat. There were 30 diamonds that
weighed at least one-quarter carat, and apparently there were another six
that weighed more than 0.20 carat.
On closer examination, there were some significant differences in the
results from the six sample pits. The Freightrain kimberlite is a
complicated feature, and there could well be significant variations in the
diamond grade and sizes across the potentially large pipe. The largest
sample, JI-1, was taken from the surface of the magnetic anomaly, in close
proximity to the two drill holes that provided the greatest kimberlite
intersections. Hole FT-04 hit kimberlite just below the surface and
terminated in kimberlite at 141 metres, although half of that intersection
had passed through limestone blocks. Diamond counts from that one hole are
now available. The market seemed less than thrilled with the numbers, but
they were quite comparable with earlier surface samples, with a modest
number of stones in all, but some larger macros in the mix. The four
largest diamonds exceeded one millimetre in two dimensions, and weighed a
total of 0.0413 carat.
Drill hole FT-16 was terminated in kimberlite at a depth of 206 metres,
although about 70 per cent of the rock encountered was limestone.
Meanwhile, hole FT-05 was also fairly close to the sampling pit, and it
failed to hit kimberlite at all. Twin did not say how deep the hole was
drilled, but it was completed to a depth of about 160 metres.
As a result, pit JI-1 might be at the centre of a large but complex
kimberlite pipe, but that certainly remains to be seen at this stage. If it
is, it might be a good thing, as the pit produced a significant proportion
of the larger diamonds. The sample weighed 76.3 carat, and it contained
stones weighing 17.3 carats, for an indicated grade of 0.23 carat per
tonne. Included in that total was the largest diamond, along with two other
diamonds that weighed in excess of 0.8 carat. As well, the pit yielded
another larger stone that weighed 0.788 carat, which was big enough for
sixth place overall. There were other fairly large stones in the sample. Of
the 10 diamonds that were large enough to remain on a 3.35-millimetre mesh,
seven of them originated in the JI-1 pit, and 11 of the 30 stones larger
than 0.25 carat came from JI-1.
On the other hand, two of the pits sited closer to the edge of the anomaly
produced poorer results. Pits JI-3 and JI-6 were sited about 100 metres
northeast and southeast from JI-1. The two samples had a combined grade of
0.14 carat per tonne, based on a combined 83.8 tonnes, which was slightly
more than the amount of rock taken from the JI-1 pit. The largest diamond
from the two exterior pits weighed just 0.466 carat, less than one-third
the size of the largest diamond in pit JI-1. As well, while JI-1 contained
seven stones larger than a 3.35-millimetre screen, only one of the diamonds
in the combined sample was sufficiently large to remain on the mesh. Just
seven of the 30 one-quarter-carat diamonds came from JI-3 and JI-6.
In all, pit JI-1 contained 28 diamonds large enough to remain on a
2.36-millimetre mesh, and those diamonds weighed an average of 0.34 carat,
while the slightly larger combined samples from pits JI-3 and JI-6 held
just 12 such diamonds, which weighed an average of 0.29 carat. Another
indication of the healthier diamond size distribution at JI-1 is the
average grade using a larger, 1.18-millimetre mesh, which is similar to
that used by many bulk samples in recent times. Using that cutoff, pit JI-1
had a grade of about 0.21 carat per tonne, while pits JI-3 and JI-6 had a
combined grade of about 0.12 carat per tonne. At a cutoff of 1.70
millimetres, the difference was even more striking. Pit JI-1 would have a
grade of 0.17 carat per tonne, while the two exterior pits had a grade of
just 0.08 carat per tonne, less than half the figure at the supposedly
central JI-1 pit.
Meanwhile, the best grade originated from pit JI-4, which was located to
the southwest of JI-1. A 41.87-tonne sample of kimberlite contained just
over 14 carats of diamonds, which suggested a grade of 0.34 carat per
tonne. Included in the parcel was one stone that weighed 0.867 carat, but
Twin may have been a bit unlucky with pit JI-4, based on the comparative
distribution of the somewhat smaller diamonds. Also suggesting that Twin
was unlucky is the fact that 10 of the 0.25-carat stones came from JI-4,
which fell just short of the number of similarly-sized stones in the
significantly larger sample from JI-1.
If the area surrounding JI-4 also has a healthy distribution curve,
comparable with that of JI-1, it could be good news for Twin, as an
optimistic interpretation would suggest that there could be a portion of
Freightrain, covering the area sampled by both pits, which might have a
higher overall grade and a coarser diamond size distribution curve than the
sample as a whole. The combined grade of the two samples is about 0.27
carat per tonne, and it would appear to account for most of the largest
stones, a combination that could maximize the rock value if there are no
significant variations in diamond quality.
Alternatively, it is possible that the variations are just a statistical
fluke, and Twin's next job will be to determine if there are significant
variations that might indicate a high-grade section of the Freightrain
complex. It is possible that the caustic fusion results from the core
samples collected last year will start to provide some clues, but much more
work will be required for Twin to get a reasonably accurate handle on the
three-dimensional grade and shape of the Freightrain body.
That will take more drilling, a still larger sample and more money. Twin
has poked about 17 holes into the body, although that work has resulted in
kimberlite intersections of just 314 metres. That works out to less than 20
metres per hole, although most of them were drilled on the edge of the
pipe, and many were terminated at a shallow depth. Nevertheless, that work
has revealed that there are large chunks of limestone embedded within the
kimberlite, at least at the top of the body, and possibly to a considerable
depth. That is certainly not good news no matter how the data is spun, but
it remains to be seen just how extensive the limestone actually is.
As well, Twin will have to take a larger sample to get an accurate notion
of the value of the Freightrain diamonds. The next sample could be on the
order of 1,000 tonnes, although even that would likely provide just a few
hundred carats, which would still be too small to provide a definitive
answer to the question of diamond value.
Twin spent about $4-million at Jackson Inlet last year, and Mr. Derbuch
said that the company would spend about double that amount in the year
ahead. The program would have a base budget of about $2-million, with
$3-million allotted for the next sample and an equal amount for another
round of drilling at Freightrain, Cargo and several other anomalies. Mr.
Derbuch hopes to put a hole into each one of the targets at Jackson Inlet,
and the company should keep the Lakefield Research laboratory busy for
another year.
To do that, Twin will have to go back to the market to raise considerably
more cash, as at the end of last year, Twin's working capital had declined
to just under $2-million. Coming up with money has been tough for most
junior explorers, but Twin has had considerable success with equity
financings in recent years. In 2000, Twin Mining raised about $11-million,
although it resulted in the issue of nearly 22 million shares.
Although most of the focus at Jackson Inlet has been directed toward the
Freightrain kimberlite, the Cargo body also seems quite interesting, based
on an initial tiny sample. That rock weighed 18.65 kilograms, and it
yielded 11 diamonds, including four macros. At least two of the diamonds
were macros in two dimensions, and one of the stones was two millimetres
long, and it exceeded one millimetre in all three dimensions, weighing
roughly 0.025 carat. The sample is still statistically meaningless, but it
is certainly an encouraging start, as the counts are significantly higher
than those from an equivalent sample of Freightrain rock.
Although results from this year's program will be up to a year away, Twin
should have a steady stream of numbers to keep the market busy over the
next few months. All of the mini-bulk results are now in, but the company
will likely provide some indication of the value of the diamonds already
recovered. As well, there are a considerable number of samples in for at
Lakefield's lab. Those samples include core from more than a dozen holes
into Freightrain, as well as two holes into Cargo.
With the activity Baffin Island, the Torngat play is likely to remain all
but forgotten by comparison. Twin still spouts optimism about the project,
but the market has given it up for dead after a 341-tonne sample produced
just 13 carats, for a grade of less than 0.04 carat per tonne. The company
continues to poke around the Torngat region, but the play is not likely to
see a major amount of work any time soon.
Twin's shares hit a high of 82 cents in early February, in anticipation of
the Freightrain results, recovering from a fall low of just 33 cents. Since
then, Twin's stock had retreated to less than 50 cents of late, as
speculators were possibly moving to other plays that have recently become
market darlings. The sample results brought a few of them back, as Twin's
stock hit an intraday high of 58 cents, before settling back to close up
three cents, at 52 cents. |
