GGL hopes its Seahorse sparkles
street wire by Will P.......curteousy of Stockwatch
GGL Diamond Corp GGL
Shares issued 43,722,510 Sep 17 close $0.24
Wed 18 Sept 2002 Street Wire
by Will Purcell
After a decade of fruitlessly poking around Canada's North, Ray Hrkac's GGL Diamond Corp. finally has a number of kimberlites that it can call its own
-- or at least it thinks it has. After 10 years of failure, a company might well question its first finds, but in fact, it is a regulatory requirement that GGL refer to its promising material as "ultramafic rock that has characteristics consistent with kimberlite," until the company's qualified person can make an official determination. Whatever GGL calls its rock, the market seemed optimistic that it would carry diamonds, as GGL's stock jumped from 20 cents to a peak of 26 cents in the days following the news.
There are several signs that the rock has a good shot at being
diamondiferous, but whether it will contain a significant quantity of the gems is entirely another matter. The three discoveries were made on the company's Seahorse property, which GGL acquired in 2000 by staking ground just to the southwest of Lac de Gras. The property was one of several blocks that the company had acquired in the region just to the south and west of Lac de Gras, and from the start, GGL was optimistic that it would soon have a kimberlite success. That optimism had not been shared by the previous owners of the Seahorse property however. De Beers had been exploring in the area since 1991, and it held a significant land position in the area that it gradually dropped. Kennecott Canada picked up ground over the western portion of Seahorse in 1994, but that property has shrunk through the years as well. The northernmost part of the property was held by the DHK group of companies, including Kettle River Resources Ltd., until earlier this year. It seems curious that little GGL would succeed where a major diamond hunter had failed, but much of Canada's North was given just a cursory glance in the early stages of the diamond hunt. Geophysical surveys were flown over much of Seahorse, but much of that work was completed by De Beers on a line spacing of 250 metres, which would allow many smaller and subtler kimberlite targets to escape detection. Kennecott flew some geophysics on a 150-metre spacing, but even that failed to produce any finds. There had also been a limited amount of till sampling completed, but apparently that work did not produce any distinct mineral trains. Since then, GGL has been conducting preliminary work on the property, completing more till sampling in 2000 and again last year, then following up that program with geophysical surveys on a 50-metre line spacing over the priority areas identified by the sampling program. That led to a drill program in 2001, but nothing came of the one target drilled on the property last year. GGL is hopeful that its new kimberlites will be diamondiferous, and its geochemical work plays a prominent role in supporting that optimism, as a significant portion of its pyrope garnets plot as G-10s. That is nothing new for GGL however, as the company has long been finding toutable tidbits in its geochemical results. Unfortunately, the company's promising pyropes did not amount to much at Fishback or Dessert, and its great geochemistry has so far drawn a blank at the company's Doyle Lake property. In the spring of 1996, GGL managed to craft quite a promotion out of its Doyle garnets, as its stock ran from less than 50 cents to a peak of $3.75 in a few months, but Mr. Hrkac's promotion ran out of steam after that, as GGL
continued to draw kimberlite blanks for its exploration efforts.
Nevertheless, the proportion of G-10s would seem to be an encouraging sign at Seahorse. GGL's kimberlites are about 40 kilometres south-southwest of the Ekati mine, and about 40 kilometres west-southwest of the Diavik mine. That would place it close to two clusters of very rich kimberlite pipes, but so far at least, there has been little encouragement from any of the properties closer to Seahorse. There appears to be a cluster of pipes just to the northeast of Seahorse, and although most of those finds proved to be diamondiferous, none of them came close to being economic. Three of the kimberlites were discovered in 1993, on the DHK property that was being explored under an option deal by Kennecott, just to the north of Seahorse. The property sported some promising indicator minerals, including several G-10 pyrope garnets, and the company's drills began turning on a number of promising geophysical targets. The DD-17 kimberlite proved sufficiently enticing that Kennecott processed about 950 kilograms of kimberlite, which produced 188 diamonds. One of the reasons for the larger sample may have been that the pipe contained a healthy proportion of macro-sized stones. The find was made back in the days when companies
routinely touted their macrodiamond ratios, and DD-17, with 54
macrodiamonds in the parcel, sported a 0.40-to-1 ratio, which was
comparable with some of the better finds at the time.
Nothing came of DD-17 however, and it unfortunately seemed to be the best of a sorry lot. Kennecott discovered the DD-42 kimberlite just a few kilometres further to the north, and it sent about 230 kilograms of rock off for processing. That material contained 44 diamonds, including nine macros, both of which were less than the result at DD-17. Kennecott's third find of 1993 was the DD-39 kimberlite, about one kilometre southeast of DD-17. A total of 217 kilograms of kimberlite yielded 39 diamonds, including seven macros, which was close to what had come from DD-42. As a result, little more was done with the three finds after that, as Kennecott became preoccupied with better things on the Diavik property. Nevertheless, the company did make a fourth find on the DHK property. The DD-2002 kimberlite, a 2.2-metre-wide, land-based dike was discovered in 1999, near DD-42. The dike was diamondiferous as well, although just a tiny sample of rock was processed. Seven kilograms of kimberlite produced six microdiamonds, which seemed encouraging, although the sample was far too small to be definitive. Kennecott seemed to have little interest in dikes however, and nothing more was done. Kennecott gave up the hunt on the DHK property after that, and the claims were due to lapse this year. Kettle River's George Stewart thought enough of the finds that he took a small portion of the DHK property to a 21-year lease through another of his companies, New Nadina Explorations Ltd. Once again, it seemed to be promising geochemistry that kept Kennecott and the DHK group in the hunt through most of the past decade. Mr. Stewart and his partners were oohing and aahing over their pyrope garnets from the early days of the hunt, but their G-10s did not translate into the discovery of economic kimberlites on DHK, or any of their other properties. There were several other finds just to the north and east of the DHK
cluster. Kennecott discovered five kimberlites on ground held by
SouthernEra Resources that it was exploring under an option deal. About 10 kilometres of Seahorse is the EG-03 kimberlite, which was also found in 1993, produced a solitary microdiamond from 150 kilograms of kimberlite. The EG-01 body is within 10 kilometres of Seahorse to the northeast, and it produced a single micro as well, from 46 kilograms of rock. The EG-130 body was found nearby, but it took 490 kilograms of kimberlite to find a single microdiamond. Kennecott did not have as much patience with EG-02, as it only processed 19 kilograms of kimberlite, which was barren. The best find on the SouthernEra property was made in 1999. Kennecott's EG-05 pipe produced 28 diamonds from 129 kilograms of kimberlite, but just one of the stones was a macrodiamond. All of those kimberlites are to the north and east of Seahorse, and they appear to be on the southern and western fringes of the pipe clusters that contain the Ekati and Diavik pipes. Further to the south and west, kimberlite discoveries have been few and far between. The nearest discovery to the south is the apparently economic Snap Lake dike, which is being developed by De Beers. The large dike is nearly 90 kilometres to the south of Seahorse, and there have been a number of indicator mineral trains found in the expanse between the two properties. Chris Jennings has been a big believer in geochemistry, and his SouthernEra Resources was a big explorer in that area for several years, chasing a number of those promising trains and their elusive sources. Several millions of dollars have been spent on the hunt in the area around and east of MacKay Lake, but so far, there has been little to show for it. Things are much the same to the west of Seahorse. The closest discovery is a cluster of pipes just south of Roundrock Lake, about 100 kilometres from the GGL property. De Beers made at least five finds in that region and several more further to the south, near Upper Carp Lake, but nothing has come from any of the finds, although De Beers continues to hold the properties. The closest discovery to Seahorse in the Roundrock cluster is Aquila, which was discovered in 1996. Aquila is thought to be a blow on a dike system, but it proved to be marginally diamondiferous in any case. About 345 kilograms of kimberlite produced just 36 diamonds, including eight macro-sized stones. The Cygnus sill was found in the immediate vicinity of Aquila about two years ago, but it yielded just eight micros from 88 kilograms of kimberlite. The region between Aquila and Seahorse has been explored through the years, although to a limited extent. Much of that ground had been held by Kennecott and De Beers at varying times, and Caledonia Mining Corp. took a crack at the diamond hunt in the region as well in the mid-1990s. Unlike its two larger rivals, Caledonia was quite willing to tout its exploration programs, and the company was especially thrilled with the results of its
sampling program which contained indicator minerals with favourable
chemistry. Nothing came of any off that however, and in recent years, much of the ground has been dropped. In 2000, GGL picked up ground in the region, with several blocks just east of Winter Lake, and the Starfish property, just west of Seahorse. So far, GGL has had no more luck in that area than did any of the earlier explorers.
Nevertheless, hope springs eternal for Mr. Hrkac, GGL and its
long-suffering shareholders, with three kimberlite targets that could be diamondiferous. The acquisition of Seahorse and the other Lac de Gras properties brought renewed interest to the struggling GGL through the latter half of 2000 and early 2001. The stock crested at 37 cents, but the market's patience seemed to evaporate, and late last year, GGL's shares sagged to just seven cents. Since then, things have been a bit better. GGL added three on Monday, closing at 25 cents, but lost one of those cents on Tuesday, closing at 24 cents. |
