Ashton's Potentilla is better, but not good enough
Ashton Mining of Canada Inc ACA
Shares issued 49,062,149 Sep 17 close $1.25
Tue 17 Sept 2002 Street Wire
by Will Purcell
Ashton Mining of Canada now has another piece of its Coronation diamond puzzle, with the macrodiamond results from its Potentilla kimberlite, about 125 kilometres southeast of Kugluktuk on the Kikerk Lake property. The result does not appear to be enough to warrant further work on the pipe, but the resulting grade may have been a bit higher than some investors had expected, after a string of poor results from the company's Artemisia pipe, about 15 kilometres to the east. As well, speculators now have a somewhat better picture of how diamond counts might translate into sample grades for other finds in the region, including two recent Ashton discoveries and Tahera Corporation's Anuri pipes. In all, 5.83 tonnes of kimberlite from Potentilla produced diamonds weighing 1.28 carats, for an indicated grade of 0.22 carat per tonne, for stones large enough to remain on a 0.8-millimetre mesh. The grade dropped to just 0.175 carat per tonne for stones large enough to remain on a one-millimetre screen, based on the recovery of just 1.02 carats. The larger cutoff is closer to reality for an operating mine, which generally recovers diamonds no smaller than 1.5 millimetres, but Ashton has always used a 0.8-millimetre cutoff for its smaller samples in the past. As a result, the 0.8-millimetre grade must be used to compare the Potentilla sample with the company's other finds. The Potentilla managed to produce a grade in excess of Artemisia, on the company's Kim property. The latest Artemisia sample weighed 11.0 tonnes and that rock produced just 1.176 carats of diamonds, for an indicated grade of 0.107 carat per tonne. That sample had been obtained by core drilling into the pipe during the spring, but Ashton had scooped up about 1.16 tonnes of surface rock last fall, to get an initial sniff of Artemisia's grade. That test had produced 0.20 carat, for an indicated grade of 0.17 carat per tonne. In all, 12.16 tonnes of Artemisia kimberlite had yielded diamonds weighing 1.376 carats, for a sample grade of 0.11 carat per tonne. That was just half the value obtained at Potentilla, which was not a great surprise, despite the fact that Artemisia was always the darling of Ashton's Coronation play, at least to many speculators. The hopes for Artemisia were fuelled by the high numbers of microdiamonds in the initial core samples sent for caustic fusion. In all, Ashton processed 332 kilograms of kimberlite last fall, and the company recovered 1,241 diamonds larger than a 0.1-millimetre screen. That was about 3,750 stones per tonne, which was impressive enough to spark a surge of interest in the Coronation play late last year. The market seemed willing to overlook the fact that just 120 of Artemisia's stones were macrodiamonds, or about 360 per tonne, and just 38 diamonds were macros in two dimensions, or about 115 per tonne. Even most of those diamonds would be too small to be recovered in a mini-bulk test. Ashton recovered four diamonds that were one millimetre long, or 12 per tonne, and only two of them exceeded one millimetre in two dimensions, or about six such stones per tonne. Another concern was the small size of the largest diamond, which measured just 1.24 millimetres in length. The largest diamond in the 12 tonnes of Artemisia rock subsequently processed weighed just 0.08 carat, which seemed to confirm that the pipe did not have a particularly favourable diamond size distribution curve. As a result, it was no real surprise that the grade at Artemisia was very modest. Lost in the lower diamond haul from the initial Potentilla samples was the real possibility that the diamond size distribution in the pipe was better than at Artemisia. About 208 kilograms of rock had produced just 252 diamonds, and the rate of about 1,200 per tonne was just one-third of what Artemisia had produced. Just 22 diamonds were macros, and the rate of 106 stones per tonne was also about one-third of what had been found in Potentilla's western sister. Things were a bit better with larger diamonds however. Ten of those diamonds, or 50 per tonne were two-dimensional macrodiamonds, and three stones, or 14 per tonne, were at least one millimetre long. Although just one diamond was longer than one millimetre in two dimensions, another just missed, and the largest stone was longer than two millimetres. Based on all that, it seemed that Potentilla had a good chance of producing a better diamond grade than Artemisia. That has been borne out by the latest sample, and the largest diamonds recovered in the Potentilla sample support the notion that the pipe has a healthier size distribution, as the largest Potentilla diamond weighed 0.34 carat, and the second largest weighed 0.09 carat. Both of those stones are larger than anything found at Artemisia, despite the significantly smaller size of the Potentilla sample. Unlike Artemisia, there are two distinct types of kimberlite at Potentilla, and it is no surprise that the breccia material has a significantly better grade than the hypabyssal rock. Ashton processed 4.48 tonnes of breccia, recovering diamonds weighing 1.07 carats, for a grade of 0.24 carat per tonne. That compared with a grade of just 0.155 carat per tonne, based on 0.21 carats recovered from 1.35 tonnes of hypabyssal kimberlite. That outcome was suggested by the initial sample results. Ashton had
processed 129 kilograms of breccia and 79 kilograms of hypabyssal
kimberlite, and most of the larger diamonds had come from the breccia. All three one-millimetre diamonds had originated in the breccia, as had seven of the 10 two-dimensional macros. All that would suggest that Ashton's two most recent finds have modest diamond grades. The Stellaria kimberlite was found just 700 metes east of Potentilla, but it does not seem to have its sister's diamond size distribution, based on the first tiny batch of samples at least. Ashton processed 105 kilograms of Stellaria kimberlite, which yielded 78 diamonds, or about 740 stones per tonne. In all, 13 of the diamonds were macros, or about 125 macros per tonne, but just one of them was a 2-D macro, or about nine per tonne. That stone was just 0.8 millimetre long. None of that initially seems particularly encouraging, but the tiny sample of hypabyssal kimberlite could be misleading. As a result, Ashton has completed another hole into the body and has sent another 100 kilograms of kimberlite off for processing, just to make sure, but the market is not holding its breath, as Stellaria appears to be a 13-metre-wide dike with a strike length of less than 400 metres. Meanwhile, there was no masking the disappointment at Thrift, which is about 2,500 metres southwest of Artemisia. Ashton processed 101 kilograms of hypabyssal kimberlite from Thrift, but the rock produced just nine microdiamonds. Despite the disappointing grades from Potentilla and Artemisia, and the modest diamond counts from Stellaria and Thrift, Ashton is expected to keep plugging away at its Coronation properties in the coming months. The company has continued with the collection of till samples in regions with unexplained mineral trains and geophysical anomalies, and that work should result in the identification of several new drill targets across the company's properties in the region. Meanwhile, there is still no word on whether or not Kennecott Canada and Tahera Corp. will proceed with a mini-bulk test of its Anuri twins, about 75 kilometres to the south of Artemisia and Potentilla. The main Anuri pipe still has the distinction of having produced the largest diamond recovered from the district, despite the Ashton mini-bulk tests, but it seems likely that the 0.75-carat Anuri stone was a bit of a fluke. In all, Kennecott has processed about 1,500 kilograms of kimberlite from
the two Anuri pipes, recovering 1,648 diamonds larger than a
0.15-millimetre screen. That minimum cutoff is larger than Ashton's, and the result is not directly comparable as a result. The Anuri pipes produced 552 macros however, or about 370 stones per tonne. Of those, 110 were two-dimensional macrodiamonds, which worked out to about 75 stones per tonne. In all, 14 diamonds were large enough to remain on a one-millimetre screen, or nine stones per tonne. None of that seems dramatically different than Ashton's results at Potentilla or Artemisia, other than the presence of the one large diamond, and that could account for Kennecott's slow pace at Anuri. Nevertheless, the main Anuri pipe seems to have a significantly higher diamond content than does Anuri East, and Kennecott may well decide to take a larger test from the pipe this winter. Kennecott processed 656 kilograms of kimberlite from the main Anuri body, and that produced 2-D macros at the rate of nearly 100 per tonne, and one-millimetre diamonds at the rate of about 15 per tonne. That haul included the 0.75-carat stone, but still, the grade at Anuri could prove to be fairly modest. Either way, Kennecott's decision is expected in the next few weeks, but the slow pace has taken its toll on Tahera's stock which has dipped from 41.5 cents in April, to near 16 cents of late. It has been bad Coronation news, not a slow pace, which has taken its toll on Ashton's shares. The stock had traded as high as $4.65 early this year, but dipped close to the $1 mark earlier this month, as disappointment at Artemisia continued. Ashton managed a bit of a rally last week, hitting a high of $1.47 in anticipation of some brighter news, but it was not to be. Ashton lost 13 cents on the news Monday, but it gained a nickel back on Tuesday, closing at a still-dismal $1.25. |
