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Majescor finds a Wemindji setback
Majescor Resources Inc MAJ
Shares issued 18,429,962 Aug 23 close $0.45
Mon 26 Aug 2002 Street Wire
by Will Purcell
Jacques Letendre and Andre Audet's Majescor Resources Inc. continues to have bad luck with its Quebec diamond plays. The latest project to produce a disappointing result was its Wemindji play, in Northwestern Quebec, on the east side of James Bay. Majescor has just finished processing a mini-bulk sample of Wemindji kimberlite, but the rock produced nothing but disappointment, as no larger macrodiamonds were recovered. Despite the bad news, Majescor's stock actually jumped a cent Wednesday, closing at 45 cents, suggesting that the market did not have high expectations for the Wemindji play. Rather, it seems that Majescor's still hopeful shareholders are pinning their hopes on the properties further to the northeast. The poor result is another blow for the Wemindji project, which has steadily been slipping in importance of late. Ironically, Majescor's Quebec rival, Ashton Mining of Canada, just revealed that it has discovered its seventh kimberlite, on its Foxtrot property in the Otish Mountains region, which is now a much hotter play with speculators. Majescor also has a big land position in that region, but it has been struggling to come up with any real encouragement there as well. Although the mini-bulk test proved to be barren, with no diamonds large enough to remain on a 0.85-millimetre screen recovered, one microdiamond and a macro-sized stone measuring 0.6 millimetre in length were recovered from 190 kilograms of kimberlite that was processed by caustic fusion. Nevertheless, that meagre haul is far from what would be required to be of interest, and that lack of diamonds is clearly one of the key problems with the Wemindji play, so far at least. Diamond finds in the area to the east and northeast of Wemindji have been few and far between. In addition to the tiny stones just found by Majescor, a tiny microdiamond, just 0.10 millimetre in length, was discovered in a 13.6 kilogram batch of rock processed last summer by Dianor Resources Inc., on its Yasinski North property, about 100 kilometres east-northeast of Wemindji. That discovery was followed by the recovery of two additional micros from about 90 kilograms of rock collected from two additional lamprophyre dikes nearby. In addition to the negligible diamond content from the samples processed so far, just finding a prospective kimberlite has proven to be a daunting task at Wemindji. The geophysical background in the region is apparently very noisy, and that makes interpreting the geophysical data a difficult challenge. That is believed to be one of the key reasons that De Beers gave up its search in the Wemindji region in 1999, after spending several fruitless years in the hunt. Nevertheless, there remain some bits of encouragement, apparently enough to keep Majescor's Wemindji hopes alive. It was the presence of a promising array of kimberlite indicator minerals that kept De Beers in the region as long as it did, and Majescor has been touting its collection of indicator minerals since the beginning of its play. It was garnets and ilmenites that provided much of the hope, and that included the presence of G-10 garnets in toutable quantities, although the proportion of G-10s at Wemindji is believed to be significantly lower than in the Otish Mountains region. Majescor's indicator minerals seem reluctant to point the way toward their source however. The company's efforts centred on an area, covering 16 hectares, which contained an abundance of indicator minerals, as well as kimberlitic rock fragments. Majescor drilled six holes into magnetic targets within this area, but the program failed to encounter any kimberlite. Unfazed, Majescor went back early this year and began poking more holes, based on a new interpretation of its data. Three of the holes missed and a fourth encountered just a thin dike, but a fifth hole found a wider zone, and it was from that site that Majescor's larger sample was collected. With the latest failure, it is back to basics for Majescor. The company continues to express faith in its Wemindji play, faith that continues to be based upon its indicator minerals. Although its kimberlite sample proved to be nearly barren, it did contain an abundance of indicator minerals, including chrome pyropes, chrome diopside, eclogitic garnets, picroilmenite and chromite. That would not seem particularly encouraging for future work, although Majescor hastened to add that its prospective new sites contained
a distinct array of indicator minerals that produced a different
geochemical result, and it is those differences that continue to offer hope. Whether that will mean anything remains to be seen, as the company will first have to discover another of those elusive Wemindji kimberlites. A surface sampling program is in progress, and that will be followed by geophysics this fall, and all of that could lead to another round of drilling this winter. Wemindji is sorely in need of some good news, and if there is to be any, it will likely be up to Majescor to provide it. There are several companies working in the region, but their exploration programs to date generally pale in comparison with Majescor's work. Majescor could also use some good news from its two other Quebec diamond plays, and the absence of any real encouragement has taken its toll on the company's share price this year. The stock traded for less than 40 cents last fall, but it hit a peak of $1.95 in late January, as diamond fever swept the markets. Speculative interest waned after that, and Majescor was particularly hard hit this spring, as what little news the company was able to produce, was bad. By midsummer, Majescor's shares had plummeted to 40 cents, where it had traded before any of the Quebec plays had begun to roll. It is said that the best place to find a mine is within sight of a headframe. If so, the Portage project might be Majescor's best play. Although Ashton is far from having a headframe on its Foxtrot property, the company has so far produced the only real Quebec encouragement. In addition to coming up with some decent macrodiamond counts, Ashton has made finding kimberlitic pipes look easy. The company went two-for-four last year, discovering its first two Renard bodies, and it found four more this spring by drilling four more holes. Ashton has now added a seventh kimberlitic body to its list. Majescor and its partner, BHP Billiton, have been having a dismal time of things by comparison. Their Portage property all but surrounds the Ashton ground, with portions of the large property lying within 20 kilometres of the seven Renard discoveries. BHP seemed to rely on geophysics more than Ashton has, coming up with about 20 targets based on a high-resolution geophysical survey completed last year, which was apparently followed by ground geophysics this year. All that came to naught however, as the company drilled 18 holes to an average depth of about 60 metres. When all was said and done, the only toutable thing that came from the
drilling was a better understanding of the local geology and its
geophysical signature. Unfortunately, none of that local geology contained a sniff of kimberlitic rock, and that failure was largely responsible for the collapse of Majescor's previously buoyant stock. Nevertheless, BHP continues to plug away at Portage. The company is flying more geophysics over the property, but it is also collecting till samples, which may help to target the next drill program to the most prospective targets. Although the Portage project has the advantages of being closest to the Renard discoveries and having BHP paying the bills, the next chance for some good news for Majescor might come the Mistassini property, where Canabrava Diamond Corp. is earning an interest in that Majescor property. Canabrava and Majescor have been taking things slowly, but its preliminary exploration could lead to a drill program in a few months. The Mistassini partners have also been using geophysics, but they seem to have placed a priority on sediment sampling programs. Nearly 300 samples were collected earlier this year, in the hopes of prioritizing existing geophysical targets. The program should also help delineate the heads of existing mineral trains, as well as aid in the location of new ones. If the results are sufficiently encouraging, Majescor and Canabrava could be drilling this fall. It remains to be seen if Mistassini can produce enough good news to bolster Majescor's slumping stock. The project lies roughly 100 kilometres to the
south of the Renard finds, but there have been three kimberlitic
discoveries in the region just to the northeast of the Mistassini property. The Lac Beaver kimberlite is just 15 kilometres to the east, and Pure Gold Minerals Inc. and Ditem Explorations Inc. have found two more bodies another 20 kilometres to the northeast of Lac Beaver. Several of Ashton's Renard pipes have produced encouraging numbers of larger macrodiamonds, but further to the south, diamonds of any size have been hard to come by. Although results are still pending from the H-2 find, the news from H-1 was disappointing, as no diamonds were recovered. The original discovery in the Otish Mountains region, Lac Beaver did produce four token stones in a 96-kilogram sample, but a six-tonne batch did not yield any macro-sized stones. Nevertheless, Majescor and a many other explorers still think that there is a good chance that there are significantly diamondiferous pipes lurking in the area surrounding the Mistassini property. Majescor has another diamond play, further to the north, in the Lac Gayot region, about 400 kilometres to the north of Ashton's Renard discoveries in the Otish Mountains district. The company shares that play with Diamondex Resources Ltd., but work has not progressed much beyond the preliminary stages. The company has mused about a possible drill program this fall, but that could be quite optimistic at this stage. Thanks to its partners paying most of the exploration bills, and to some timely private placements, Majescor would seem to have enough cash to keep plugging away at Wemindji on its own. The company reported nearly $2.5-million in working capital at the end of May, and Majescor has closed two private placements this summer, bringing in another $1.4-million through the sale of 60-cent shares. It would seem that speculators still have hopes that Majescor will find diamonds somewhere in Quebec. Majescor gained three cents Thursday but lost them all on Friday, closing at 45 cents. |
