Ashton drills for size and grade in Quebec
Ashton Mining of Canada Inc ACA
Shares issued 49,062,149 Oct 7 2002 close $ 0.85
Tuesday October 8 2002 Street Wire
by Will Purcell
There have been signs of encouragement that Ashton Mining of Canada might have several kimberlitic bodies with potentially economic diamond grades, but the apparent small size of the bodies in the Otish Mountains region of Northern Quebec has been a significant worry. As a result, the company has spent the summer and fall poking several more holes into existing pipes and additional targets in the Renard cluster. That program has produced a number of mini-bulk samples, but it has also provided more information on the size of some of the kimberlitic bodies. Although all of the Renard pipes appear quite small, the latest drilling offers hope that Ashton could have a significant amount of kimberlite if several of the bodies subsequently make the grade. If so, that would be good news for Ashton, and encouraging for the other explorers in the region.
Ashton has now drilled three more holes into Renard-2, bringing the total number to nine. The latest drilling provided 1.8 tonnes of kimberlitic rock that Ashton will now process for macrodiamonds. The three holes were drilled from the site of the discovery holes, which were drilled last year into what is believed to be the centre of the body. One of the holes bottomed in kimberlitic rock, at a depth of nearly 140 metres. That hole was nearly vertical, while the two other holes were angled at 50 degrees from the horizontal. One of them returned a 103-metre intersection, while the other encountered smaller intersections of kimberlitic rock.
Ashton drilled four more holes into the centre of Renard-2 last spring; the two that were drilled nearly vertically into the body were terminated in kimberlite at depths of roughly 200 metres. The two other holes were drilled at a 50-degree angle, and both of them produced intersections of about 100 metres. The first two holes into the body were drilled last fall, in the same area. A vertical hole was terminated in kimberlitic rock at a depth of 101 metres, while an angled hole encountered 13 metres of kimberlitic material.
The Otish Mountains diamond play had been slow to attract notice last fall, but the diamond counts from the first two Renard-2 holes triggered a market frenzy. The pipe contained a significant number of microdiamonds, and the presence of some larger macrodiamonds was an encouraging sign that the body would have a healthy diamond size distribution and an encouraging grade. That hope and the resulting hype kept speculative interest alive until the spring, when Ashton revealed the results of its 2.44-tonne mini-bulk test. The sample produced diamonds weighing 1.69 carats, for an indicated grade of 0.69 carat per tonne. As well, hopes for a healthy diamond size distribution were supported by the fact that the five largest diamonds weighed between 0.10 and 0.16 carat.
The Renard-2 geophysical anomaly is about 150 metres long and 100 metres wide, but the surface dimensions of the pipe are somewhat smaller than that. Renard-2 now appears to measure about 120 metres long and 65 metres wide at surface. Ashton now has an idea of the shape of the pipe at depth, with nine holes now completed, although more will be required to accurately determine the true shape of what seems to be a small pipe. If the body has fairly steep walls, it could well contain three million tonnes of kimberlitic rock, and possibly as much as five million tonnes, to a depth of 300 metres. Nevertheless, even if the grade holds up with larger samples, Renard-2 is unlikely to support a mine on its own, due to the small size.
That could well be the reason that Ashton has not taken a significantly larger sample from Renard-2 at this stage. The additional 1.8 tonnes of rock will provide a bit more of the picture, but it will hardly offer a definitive answer as to what the diamond grade and size distribution at Renard-2 are likely to be. Taking a larger sample will likely wait until Ashton has an initial notion of the diamond grades and the volume of kimberlitic rock present in the other pipes in the Renard cluster. So far at least, Ashton has come up with results that offer encouragement on both of those scores.
Some of that encouragement was found at Renard-3. Ashton discovered its third Renard body in March, when it drilled a vertical hole to a depth of 102 metres, where it was terminated while still in kimberlitic rock. A subsequent angled hole was drilled from the same site, and that produced an 86-metre intersection. Since then, Ashton has put seven additional holes into Renard-3, coming up with a mini-bulk sample weighing about 4.3 tonnes. One nearly vertical hole was drilled on the eastern edge of the body, and it encountered a 115-metre intersection of kimberlitic material. Two holes were drilled on the northwestern edge of the body, and one of those was a nearly vertical hole that encountered 97 metres of kimberlitic rock.
The four remaining holes were drilled from the same site as the first two holes in the spring, midway between the eastern and northwestern holes. A vertical hole encountered 107 metres of kimberlitic rock, while a second hole, drilled toward the southwest, produced a 184-metre intersection. The two remaining holes also hit kimberlitic material, but to a lesser extent. Based on all that, Ashton believes that Renard-3 is a linear body measuring at least 120 metres long and 20 metres wide. Although more work will be required to accurately determine the shape of Renard-3, there is reason to hope that the body will have similar dimensions at depth. If so, a rough approximation would suggest that Renard-3 could contain about 1.5 million tonnes of kimberlitic material to a depth of about 300 metres.
Renard-3 did not produce a big haul of diamonds, but many of what were found seemed quite large, considering the small size of the samples. Ashton initially processed about 100 kilograms of rock, and it appeared that two larger macrodiamonds were broken during the processing of the sample. As a result, Ashton processed another 55 kilograms, and that seemed to confirm the result. In all, 156 kilograms of rock produced just 40 diamonds, including the two that were likely broken, and 19 of them were macros. The two broken stones were probably longer than three millimetres, and Ashton recovered two other stones that were of a similar size. All that offers hope that the mini-bulk test of Renard-3 will produce an encouraging grade.
Meanwhile, Ashton's fourth find seems just as encouraging, at this stage at least. The latest holes drilled into Renard-4 would seem to offer hope that the body is a bit more substantial than Renard-3. The kimberlitic pipe was discovered in the spring, when Ashton drilled a vertical hole that was terminated at a depth of 102 metres, while still in kimberlitic rock, and a second hole that was drilled from the same site produced a 78-metre intersection. Ashton recently drilled three more holes into Renard-4, to recover a 4.2-tonne mini-bulk sample. The third hole into Renard-4 was drilled to the west, from a site near the northwestern edge of the body, and it was no great surprise that it encountered just 38 metres of kimberlitic rock.
Things were much better with the two remaining holes however. The fourth hole was drilled from the same site, but toward the southeast, and it was terminated in kimberlitic rock at a depth of 254 metres. A fifth hole was drilled from the same site as the first two holes, toward the east, and it encountered 256 metres of kimberlitic material. Based on all that, Ashton has determined that Renard-4 is at least 140 metres long and 60 metres wide, and although more drilling will be required to determine the three-dimensional geometry of the pipe, the substantial intersections would seem to offer hope that the Renard-4 body has a significant areal extent at depth. If all goes well and Renard-4 proves to be a steep walled pipe, it could contain something between three million and five million tonnes of kimberlite to a depth of 300 metres, roughly similar to Renard-2.
That would be good news, as Renard-4 seemed to have a similar diamond content as Renard-3. Ashton processed 102 kilograms of rock, recovering 35 diamonds, including 14 macros. Of those, 11 were two-dimensional macrodiamonds, and the largest stone was longer than two millimetres in two dimensions. As a result, Ashton could glean more encouragement from the 4.2-tonne mini-bulk test. If the grade at Renard-4 lives up to hopes and the size of the pipe holds up, Renard-4 could add significantly to the available tonnage of a hypothetical mine.
Ashton has plans to take a small mini-bulk test from Renard-5 as well, but that work will have to wait until next year, as the body is under a small lake. Ashton drilled a nearly vertical hole into the body this spring, and it returned a 94-metre intersection of kimberlitic rock, while an inclined hole from the same site produced an 18-metre intersection. That is hardly conclusive, but the initial results would seem to suggest that Renard-5 is a small body.
Once again, the diamond counts from a 100-kilogram sample seemed quite similar to those from Renard-3 and Renard-4, with comparatively few microdiamonds, but a healthy number of larger macros. The sample contained 35 diamonds, but 20 of them were macro-sized stones, and 13 of those were at least 0.5 millimetre in two dimensions. The largest diamond was at least two millimetres in two dimensions. That seems encouraging from the perspective of grade, but the body may be quite small, although that will not be known until next year.
Renard-6 also proved to be diamondiferous, although not to the same extent as most of its sisters. A 100-kilogram sample produced just two diamonds longer than 0.5 millimetre in two dimensions, and the longest stone was just larger than one millimetre in two dimensions. The result could be misleading, due to the small sample size, and Ashton is processing additional material from the discovery holes. Renard-6 is also believed to be fairly small, although it is likely larger than Renard-5.
Ashton discovered two more pipes in the Renard cluster this summer. Renard-7 was tested with two drill holes, both of which were drilled at an angle. The first hole produced a 67-metre intersection, and the second hit 102 metres of kimberlitic rock. The surface anomaly at Renard-8 is just 75 metres long and 40 metres wide, but the body could still contain enough kimberlite to warrant a further look if the diamond counts are encouraging. Ashton also hit kimberlitic rock at Renard-7, which has a geophysical anomaly measuring 150 metres long and 60 metres wide. That is significantly larger than at Renard-8, but Ashton's drills did not encounter a substantial amount of kimberlitic rock at Renard-7. A vertical hole hit just 15 metres of the material, and a subsequent angled hole produced just an eight-metre intersection. The rock from the two latest finds is still being processed for microdiamonds, and more drilling will be required to adequately determine just how big the bodies are.
If things go Ashton's way, the company could have something approaching 10 million tonnes of kimberlitic rock, with an encouraging diamond grade. If so, that would be enough to keep the company plugging away in the region, and it should maintain investor interest in the Otish Mountains diamond play. That would be good news for Ashton and its shareholders, as the company's stock continues to slump. Ashton's shares, which traded as high as $4.65 early this year, dipped to an intraday low of 82 cents on Monday, before recovering to close down four cents on the day, at 85 cents. |
