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Gold/Mining/Energy : Canadian Diamond Play Cafi -- Ignore unavailable to you. Want to Upgrade?

To: Letmebe Frank who wrote (458)	12/24/2002 1:54:02 AM
From: E. Charters	Read Replies (1) \| Respond to of 16206

The NWT field is rich in caratage as far as the Diamet and the best Diavik pipes go. Dupuis' pipes are not bad grade either. Otish mts looks good too. There have been of course pipes of grade that do not make it, the same as any other country and field. So far though, the success rate, potential grade and economics are all top drawer. The average SA pipe is larger but much smaller grade than the best Canadian pipes. (Average SA grade of mines is 0.23 carats per metric tonne -- so far it appears that no Canadian pipe where production is contemplated is as low as that) We have many more microdiamonds in the NWT field although history is as long in pipe eras as any field 16 million to one billion year age) The problem with Canadian pipe hunting is that for years it was assumed that it was very difficult to find diamond pipes as DeBeers was here and were looking. There is one main problem with that theory. Neither in United States nor in Canada were DeBeers allowed to find a profitable mine, by government decree. We knew they could have the Canadian Rock company and Mono and Diapros exploring but they were not allowed to start a mine and take money out because of the bans. Ergo, what was the incentive to come up with a pipe where the rules stated in any province you had to be in production in 20 years or lose the lease? (This is a fact that they relax often for Canadian companies but may not have for DeBeers.) Thus the investors and non deep thinkers in Canadian geology were lulled into a false sense for 38 years. They thought that: 1. "DeBeers completely controlled the diamonds trade and South Africa led in gem production." Fact: (The first assumption is false as the market and costs of distribution controls the price cut diamond price, and the Russians lead in Gem production. Before the cartel of the CSO raw price fluctuated so wildly that no diamond mine could make money.) 2. "DeBeers had no reason to lie about existence of diamonds or if they had found something they would tell us." Fact: They had a reason to lie and they never told anyone about what they ever found outside SA. In fact DeBeers had never started a mine outside their political control, or at their own behest in a foreign country. They started the Williams (found by a Canadian geologist) when Tanzania threatened to start it on their own and dump the diamonds on the market. 3. "That raw stones are not profitable as DeBeers holds the price down" Fact: Stones are massively expensive to cut, market and price control, so cut stones have to be ten times more expensive than raw. It is all risk in running the cartel and often it has to buy billions in diamonds to control the price. In fact, DeBeers formed the cartel many years ago to keep the prices high in order that the mines could make a profit. 4. "Gems stones' prices are shaky, there is a glut of certain stones and the prices could fall" Fact: there is no shortage of demand, despite massive efforts by western governments to keep the diamond in disfavour when fighting "apartheid" Diamond prices have kept pace with inflation well and continuously increased in price. In fact the Russian, Australian and South African supply has been in doubt for over 20 years and the price has risen accordingly. 5. "It is very, very expensive to find diamond mines and only DeBeers knows the secrets and are not telling anyone" Fact: Exploration techniques were perfect by Russians over 25 years ago and published in many journals. With indicator chemistry largely established by the Australians in the 1950's it takes relatively little expenditure to prejudice an entire pipe. Where the thinking comes from is that it is largely a regional exploration process, which means looking over a wide area at targets. In fact, it was a Canadian company, Falconbridge, in Botswana that perfected the technique of using aerial magnetometers to find diamond pipes not DeBeers, and the Russians who first started to use infra red photography to find pipes in the 1960's. In addition Canadian companies used conductive gephysics in Nigeria to find pipes where magnetics was ambiguous. Another Canadian junior, Strike Minerals was the first to use Input techniques or time domain electromagnetics with ON-TIME measurement at high frequency of input in order to find pipes in Ontario. 6. "That kimberlites and diamonds are rare or non existent in North America and we do not have the expertise in exploration or cutting, marketing." The first diamonds were found in North America in 1880's in Michigan. Over 20,000 were found in that State. In 1948 a diamond mine was started in Arkansas and it ran for 2 years. In the early part of the century most of the diamonds in the world were cut in Philadelphia. One of the world's centres of raw and cut gem trading is New York. In 1972 the first diamonds in situ were found in the Arctic Islands in Canada by Cominco who also found diamonds in situ in Colorado and Wyoming. In 1963 DeBeers opened exploration offices in Ville Marie Quebec, Colorado, North Bay, Thunder Bay Ontario and Montreal. They found diamonds in the city of Montreal in rock, in Ontario in three locations including James Bay, near North Bay, Ontario and one other unknown location. The drilled over 1000 anomalies and some geologists worked for them for 20 years, never revealing a single thing about their work. You could phone the lab in Thunder Bay and they would answer "hello". 8 Canadian exploration comapanies signed agreements with DeBeers including Noranda and Hudson Bay to explore for DeBeers for a premium payment, never talk about the work and hand over all the Diamond stuff to DB and the CDN companies could keep everything else. Noranda geologists said the best chemistry kimberlites they had ever drilled were near Ville Marie. DeBeers requested and got control of an indicator mineral group drilled by the Ontario government, made a report and returned the stones. It is widely believed that they picked out the stones of good chemistry and substituted others! 3 professors of geology at U of T who reported widely and negatively about Canada's diamond potential and also consulted for DeBeers had been born in South Africa. There were over 3000 kimberlites found in North America by 1975 and some in New York State, Kentucky and Michigan had diamonds in them. It is amazing that DeBeers continued presence in North America and persistence in hunting and the politcal negative never told people that it was a good idea to look for diamonds. It told them the opposite. The huge red penny never dropped. Mousseau Tremblay had tried in vain for 20 years to raise sufficient funds as he believed as did many other geologists that the source of the fabulous diamond train in North America, the largest and richest of its kind in the word, with up to 70 carat perfect gems in it, was in James Bay. He was never able to raise serious money. Cominco explored with indifferent success for 20 years. Finally Hugo Dummet, a South African geologist with Oil money from Superior Oil, funded a geologist who had made a 1000 page report on the diamond potential of Canada in 1980 for the Canadian government, in order that he would try to trace the source of diamonds that had been found by prospectors in the Mackenzie Mountains of Canada. 6 years earlier he had been part of a group that worked in BC and had found diamonds there in some Kimberlites in the Kootenay mountains. This had sparked a rush and Selco a part owner of the CSO had despatched a team ostensibly to look for copper and gold in the Kootenays. They people exploring for Selco used South African screen jigs and they made a heavy mineral eye, and also were instructed to keep all the garnets in their pan. The geologist who headed up the group had worked in South Africa. When I showed him a deep green rock I had found in one of the streams he recognized it as eclogite and he grew quite excited. It was then that I realized that our target was not really copper and gold. The geologist who made the report and found the kimberlite in BC? Charles Fipke. He was the one who trackde the pyrope across the NWT for 8 years culminating in the discovery at Point Lake NWT. If he had more faith he could have discovered that 30 years previous, geologists working for the Geological Survey of Canada had stopped in point lake and with rock hammers sampled outcropping kimberlite and made a report on it. This rock was misidentified and would not be uncovered until many years later. In 1962 a student in grade school surmised to a teacher who had asked the class whether or not their could be diamonds in Canada and where they might be. The student pointed out that SA and Canada were both shield geology and had been scraped clean by glaciers, and that they had been joined prior to the continents spreading apart. They further surmised that the one place where diamonds might be found was in the NWT. Simple reason? Few people had looked there and the country was barren of cover in most places. One day behin their home, the student saw a few young people walking who were not the usual kind. About a dozen in a group. Upon engaging them in conversation the people asked the student what was the most common mineral on earth. The student averred calcite but was told quartz. Further he averred that he knew where there were massive crystals of the stuff. The other people grew quite excited. What was their occupation and who did they work for they were asked? They where geologists, and they worked for DeBeers. Did he know who that was? Of course! "the South African company that sells all the wedding rings." They laughed. And continued out to the area where I had seen the crystals. That are is known as an alkaline centre of volcanism and is the locus of regional kimberlite formation. Some things you never forget. EC<:-}