From stockwatch-Street Wire
Shear and Northern Empire say TrustMe
Northern Empire Minerals Ltd NEM
Shares issued 7,222,337 Jul 9 close $0.43
Wed 10 Jul 2002 Street Wire
See (SRM) Street Wire
by Will Purcell
John Robins's Northern Empire Minerals has joined Pamela Strand's Shear
Minerals in a quest to revive an old Nunavut diamond play, to the west of
Hudson's Bay. The hunt for diamonds in the region was big news for a brief
time in the mid-1990s, but the glitter quickly came off a number of stock
promotions after results failed to match the hype and hope that followed
some unusual diamond counts. Despite the earlier failures, Mr. Robins and
Ms. Strand have reason to hope that their new project will produce a better
result.
Although the agreement between the two companies has just been reached, Mr.
Robins and Ms. Strand have had their eyes on the play for more than a year.
The project was developed by Adam Vary, a principal of Hunter Exploration
Group, and the notion caught Shear's attention early last year. The company
agreed to complete a regional program of till sampling and pay the costs of
acquisition, in exchange for a 50-per-cent stake in what is now known as
the TrustMe property. So far, Shear has spent about $250,000 on the nearly
220,000 hectares of ground included in the project.
Meanwhile, Mr. Robins did not have to jump through many hoops to get a
piece of the action for Northern Empire, as he is also a principal of
Hunter, along with Mr. Vary and Lawrence Barry. Northern Empire has also
been an active player in the diamond hunt of late, so the deal comes as no
big surprise, although it is mildly curious that Ms. Strand and Shear seem
to have cut a better deal with Mr. Robins than he managed to work out with
himself.
Northern Empire can earn a 36-per-cent interest in the TrustMe project by
spending $750,000 on exploration and issuing 300,000 shares to Hunter, and
the company must also give a 1-per-cent interest to Shear, along with
another 50,000 shares. When all is said and done, Hunter will retain a
14-per-cent interest and Northern Empire will hold 35 per cent. Shear will
own a 51-per-cent stake and be the operator of the project.
Ms. Strand has been involved in the diamond hunt in Canada's North for
several years, starting out as a district geologist with the federal
government during the mid-1990s, a time when diamond exploration was
certainly big news in the region. She moved on in 1997, taking up the hunt
on her own by ultimately acquiring a cash shell that became Shear Minerals.
Since then, Shear has had a number of diamond projects on the fringes of
several area plays, but the company has become more active of late.
Over the past few years, Ms. Strand has completed diamond deals with Randy
Turner's Diamondex Resources and John Fraser's Intertech Minerals, picking
up pieces of projects on the eastern fringes of the Slave diamond play. As
well, Shear has agreed to jointly explore for Alberta ice with Rick
Boulay's Marum Resources. Recently however, Ms. Strand has been dealing
with Mr. Robins's companies with increasing frequency.
Last September, Northern Empire and Shear agreed to explore for diamonds
through the Tumik joint venture. The location of the new play was not
released, although its Inuit name would certainly suggest that it is
another Nunavut diamond project. Since then, much more has been heard about
Tumik, which seems to be a secretive regional exploration program that
might lead to the acquisition of prospective ground.
In May, Ms. Strand was back at it, this time dealing with Mr. Robins
through Hunter Exploration Group. Shear picked up an option to earn an
80-per-cent share of the XYZ property, near Daring Lake in the Northwest
Territories. One of the key attractions of the XYZ property appears to be
an impressive array of diamond indicator minerals, as two beach sand
samples produced encouraging proportions of G-10 garnets. In one sample, 26
per cent of the garnets were G-10s, while the second batch contained G-10s
at the rate of nearly 30 per cent. All that would seem to suggest that Ms.
Strand and shear are big believers in geochemistry, something that may have
provided the attraction for the latest acquisition.
Of course, it is hard to imagine even a minor player in Canada's diamond
hunt not crossing paths with Mr. Robins, a Vancouver-based geologist who
has long been an active staker of ground in a number of diamond plays, as
well as being an active player on Howe Street, through a number of junior
explorers. Mr. Robins has been a frequent associate of Don McLeod and his
friends, and he appears on the boards and in the executive offices of a
number of Mr. McLeod's Northair companies, including International Northair
Mines, Tenajon Resources, and Northern Empire.
Through Hunter, Mr. Robins and his partners picked up large tracts of
ground in the developing Coronation diamond play, northwest of the Lac de
Gras and Slave regions that had kept Mr. Robins hopping through the
mid-1990s. As well, Hunter Exploration Group recently managed to acquire a
significant number of claims in the Otish Mountains region of Quebec. Since
then, Hunter has been actively optioning and selling interests in its large
land position to a number of junior explorers.
The deal between Hunter, Northern Empire and Shear would suggest that Mr.
Robins and his partners at Hunter have also been straying off the beaten
path, or at least off the paths that have been beaten nearly to death over
the past several months. At first glance, the TrustMe diamond project might
seem likely to remain a nonstarter, with speculators far more enthused with
the hot Otish Mountains and Coronation plays, but Mr. Robins and Ms. Strand
claim there are promising indications that kimberlites and diamonds are
lurking somewhere on their new property.
Those promising indications are an abundance of indicator minerals that
would seem to possess the qualities expected from a top-notch
diamondiferous kimberlite. Shear collected 64 till samples last year, and
21 of them contained an array of indicator minerals. One of the samples
contained 58 minerals, but the big news was the percentage of pyrope
garnets that were classified as G-10s. More than 40 per cent of the garnets
were G-10s, and they all were found within a defined corridor on the large
property, which would seem to suggest that one or more indicator mineral
trains await delineation with a closer sampling grid. There was also a
separate eclogitic garnet population, apparently with excellent
geochemistry as well.
The proportion of G-10 garnets is very high, surpassing the levels that
were apparently encountered at Diavik, where the G-10 population is
believed to have been close to 25 per cent, from kimberlite pipes that have
grades running as high as 5.6 carats per tonne. Twin Mining has also come
up with an impressive array of G-10s on its Jackson Inlet property on
Baffin Island, and a series of mini-bulk tests of the Freightrain pipe has
produced a cumulative diamond grade of 0.20 carat per tonne, with some
modelled grades of up to 0.50 carat per tonne.
All that would seem to bode well for the TrustMe play, but a number of
explorers have touted great indicator mineral chemistry for years, without
coming up with much of anything from their intensive exploration programs.
The mineral chemistry on Victoria Island has intrigued a number of
explorers through the years, starting with De Beers in the early 1990s, and
although many diamondiferous kimberlites have been found, none of them were
worth pursuing much further. Nevertheless, there are still many believers
in the Victoria Island play. The Yamba Lake property, northwest of Ekati,
has also puzzled a number of explorers through the years, thanks to what is
believed to be an impressive array of indicator minerals.
Shear and Northern Empire would seem to be the latest to place their trust
in the indicator minerals; although it remains to be seen just how much the
minerals will actually mean if the partners reach the drilling stage. The
explorers took special care to state that their geochemical results are
unique to the region, differing from that obtained from existing kimberlite
and lamprophyric rocks in the area and suggesting a new kimberlitic source.
The comment would suggest that Shear and Northern Empire are hoping to
convince investors that their new diamond play is not just another Parker
Lake, a microdiamond flame-out in the mid-1990s. Several explorers were
participating in the Parker Lake joint venture, when government geologists
turned up a 0.27-millimetre diamond that was in a hand sample collected
from an ultramafic dike on the property, at Thirsty Lake, to the northwest
of Rankin Inlet. That seemed unusual, but as things turned out, the big
surprise was that just one microdiamond was recovered from the tiny sample.
The Parker Lake participants subsequently allowed De Beers to take a look
at the dike, and the diamond giant recovered 2,674 diamonds from about 55
kilograms of sample taken from the dike. That was certainly an impressive
haul, but the diamond size distribution seemed quite ugly, as just eight of
the stones were macrodiamonds. De Beers took another small sample, weighing
7.8 kilograms, and the tiny portion incredibly revealed 6,680 diamonds, but
just three macro-sized stones. De Beers subsequently collected a larger
sample, and that confirmed the meagre size distribution curve, as a
1.15-tonne sample of rock, which was described as a minette or lamprophyre,
produced just two macrodiamonds larger than one millimetre. Both of the
diamonds were greenish and barely translucent, with the largest stone
measuring 2.9 millimetres in length. That was not at all encouraging and
the Parker Lake diamond play petered out after a few years.
In 1993, diamond indicator minerals also led a number of junior explorers
to the area around Dubawnt Lake, about 400 kilometres west of Rankin Inlet.
A kimberlite pipe at Outlet Bay produced an assortment of indicator
minerals, along with a microdiamond that came from one of four 60-kilogram
batches of rock. Flushed with what they bravely termed an extraordinary
find, the explorers collected a 7.5-tonne sample for diamond recovery,
which unfortunately, but perhaps inevitably, proved to be barren.
With little in the way of success, there has been little talk of the Rankin
Inlet diamond play in recent years, but Ms. Strand and Mr. Robins have high
hopes of changing that. The two companies are now laying plans to conduct a
geophysical survey, followed by surface sampling and ground geophysics over
the more promising targets. The market will likely not place much faith in
the TrustMe play unless drills actually start turning, but a few trusting
investors bought into the story, as Shear's stock jumped from 32 cents to a
high of 37 cents in the days following the deal. The sparkle has dimmed a
smidgen since then, as Shear closed down a penny on Tuesday, at 34 cents,
while Northern Empire dropped one cent, closing at 43 cents. |
