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

To: E. Charters who wrote (824)	5/21/2003 12:25:36 PM
From: VAUGHN	Read Replies (1) \| Respond to of 16205

Hello Eric Everything you say is true and I do not disagree but as you know, to have a significantly economic diamond deposit in the middle of the Canadian Arctic, companies have to find something in the neighborhood of +/-40,000,000 tonnes of open pitable ore worth at a minimum $40/tonne and probably a lot more (See Kennady Lake delay). Dykes won't provide that much ore and must be long, deep and mined underground and therefore must be worth closer to $100/tonne to be profitable (WSP). As you know, pipes will pretty much have to be numerous, close together and extremely high grade if they are small or must be quite large if they are not, to be open pit mined and profitable. That area of the high Arctic is more heavily eroded than Sommerset and much more heavily eroded than Brodeur and I am making an assumption that emplacement ages are similar to the pipes in those two nearby locals. Heavily eroded areas are less likely to contain large pipes but rather small ones and/or dykes. The first one found in the Arviat area (AV-1) is very very small and while it may subcrop, what I have heard about the mag and EM signature suggests that it doesn't. It may be indicative of what there is to find at least in the areas covered by limestone. So while AV-1 might even be extremely high grade it is too small to mine profitably up here unless there are many others close by. I am not saying that I do not like the Arviat area from a speculation perspective, as the geochemistry is excellent and the market is behind the play. I am simply playing the odds and the degree of erosion hence the probable pipe size is key to whether discoveries will eventually prove to be economic. The market will make investors money on all of the speculation before that question becomes an issue, but at the end of the day, I am sure you'll agree that potential to be economic is the overriding issue and small pipes or dykes have much lower odds of doing that trick up here. On the other hand, if it turns out that many of the Arviat targets are located on Archean basement rock, which I don't think they are, but if they are, then there has probably been less erosion and therefore there should be a greater chance of pipes at least in the 2 hecter range. Good luck Vaughn P.S. Thanks JG - they are active promoters those guys.