Frank, Wills wire from your SH site. Thanks. Interesting comments by Halcrow and nopoo [that's a shitty name, pun intended, but I'm sure hes a good guy and on the ball, so he's probably got a sensible reason for the handle.] tonight on Fipke's latest investment in MTX. Will P even go into it!
Also Frank, you hinted about heading to SI - It has some advantages over SH for sure. Would be nice if there were more posts with substance on your SH thread; it gets hard to follow the threads on the site, too much cheer leading. But is a worthwhile destination non the less.
SUBJECT: New Nadina-Street Wire by Will P Posted By: Famularo
Posted Time: 1/6/05 20:36 EST
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George Stewart's New Nadina Explorations Ltd. is touting plans for its two diamond plays in Canada's North. One old project was a key property of DHK Resources Ltd., a group that included Mr. Stewart's Kettle River Resources Ltd. The DHK play faltered during the 1990s, but Mr. Stewart remained a believer, and New Nadina picked up pieces of the old project. The other play sprang from data obtained by a major. New Nadina regularly touts its plays, but progress has been painfully slow. Nevertheless, there are some promotable aspects to the Monument and Naket projects.
The Naket play
New Nadina picked up its first northern gem play late in 2000, when it agreed to share the Naket project with Kettle River Resources Ltd. The deal began when Kennecott Canada Exploration Inc. offered its exploration data to the two companies through an area of interest agreement.
The digital data covered about 400,000 hectares of ground, but the partners zeroed in on about 5,000 hectares of claims to the northeast of Lac de Gras. The Naket play was clearly on the fringe of the Slave diamond district, as all the existing kimberlite finds lie to the west and south of the series of smaller claim blocks that made up Kettle River and Nadina's project.
The partners did little more than tout their play over the past four years, and Kettle River ended up paying for most of the work in the first few years. As a result, Nadina agreed to spend the next $80,000 on Naket, which has been shrinking in recent years. Naket now covers a single claim in the area east of Pellatt Lake and Hardy Lake, in southwestern Nunavut. That places the claim about 60 kilometres east-northeast of the Ekati mine and 60 kilometres northeast of Diavik.
There are hundreds of kimberlite pipes on the Ekati and Diavik properties, and more than half of the bodies are diamondiferous. As well, De Beers Canada Corp. turned up more than two dozen kimberlites on its Hardy Lake property, just to the southwest of the Naket play.
De Beers recently optioned the Hardy block to Majescor Resources Inc. and the junior plans a busy year on the project. The company will hunt for new kimberlites, but it also plans to test an existing find. The Jack Pine kimberlite is large, and it produced significant microdiamond counts, although larger diamonds were rare. Still, Majescor thinks other parts of the five-hectare pipe are worth more drilling.
To acquire the Hardy play, Majescor must spend a minimum of $1-million per year and average $2-million in exploration over the next five years. As a result, the chances seem good that there will be a steady flow of news from the area just southwest of Nadina's Naket play.
Kennecott did find a nearby kimberlite during its work in the 1990s. The Pellatt Lake dike produced an intriguing array of diamonds, but the story failed to stir much interest with speculators. Kennecott drilled three holes into the body several years ago, coming up with at least one 34-metre intersection that provided about 142 metres of core. The rock revealed 63 diamonds, including nine macrodiamonds.
The Hardy Lake pipes and the Pellatt Lake dike offer encouragement that any kimberlite finds on the Naket play will be diamondiferous. Still, the main challenge for New Nadina and Kettle River will be to come up with some drillable targets. The partners occasionally tout some promising geophysical anomalies, but they are making slow progress at best.
The Monument project
New Nadina added a second Lac de Gras play in 2002, when the company picked up three claim blocks on the south shore of the lake. The three claims were a part of the old DHK property that played a significant role in the big diamond frenzy of the early 1990s.
Kettle River and its DHK partners caught the market's eye as Kennecott found a series of kimberlites, including several on the DHK block. Some of the finds yielded intriguing diamond counts, but the numbers paled in comparison with the rich Diavik pipes and Kennecott eventually soured on the area.
Kennecott and its partners were about to allow the claims to lapse, but Mr. Stewart still held out hope for the old play. Rather than quickly restake the lapsed ground, New Nadina took the three key claims to mining lease status, and Kennecott and its partners transferred their interest in the ground to Nadina.
Once part of a large property, the Monument play now covers just 3,000 hectares of ground about 30 kilometres west of Diavik and a similar distance south-southwest of Ekati. The tiny play contains four known kimberlites that offer varying degrees of promotability to little Nadina, if the company can get a drill turning on the play this spring.
Last summer, Mr. Stewart proposed to take a closer look at the most recent find on the property, the DD-2002 dike that Kennecott discovered in 1999. The company processed just seven kilograms of kimberlite from the find, coming up with six microdiamonds.
That failed to interest the exploration arm of Rio Tinto for long. Still, a larger test of the body could attract attention from investors, if Mr. Stewart can put New Nadina into a position where it can extract a larger amount of kimberlite for testing. A mini-bulk test might be possible, but the company will first have to better delineate the body first, through a combination of geophysics and drilling.
Kennecott put its biggest effort into the DD-17 pipe, which it discovered in 1993. Over the next few years, the company recovered 188 diamonds from just less than one tonne of kimberlite. That was a relatively modest haul, but the size distribution of the parcel offered hints of sparkle, with 54 macrodiamonds in the mix.
The company mused about taking a mini-bulk sample for a time, but its interest gradually faded. Mr. Stewart still thinks there are possibilities however, as the partners never did detail tests of the different parts of the pipe. As a result, there could be significant variations in the diamond content within the body. DD-17 lies about three kilometres south-southwest of DD-2002.
The two other kimberlites on the Monument play offered a few hints of hope as well, although Kennecott did not test the finds to the same extent as DD-17. The company processed about 217 kilograms of kimberlite from the DD-39 pipe, recovering 39 diamonds. Seven of the stones were macros, which was mildly encouraging and potentially comparable with DD-17. DD-39 is a multiphased pipe as well, and New Nadina thinks that Kennecott did not do enough testing to write off all of the body as uneconomic. That makes the old find a possible target for new drilling.
Another of Kennecott's 1993 discoveries also yielded diamond counts that could be spun as encouraging. The DD-42 pipe is about one kilometre north of DD-17, two kilometres northwest of DD-39 and just 100 metres west of the DD-2002 dike.
Kennecott processed 230 kilograms of DD-42 kimberlite in 1993, recovering 44 diamonds. Nine of the stones were macros and there is no strong reason to suspect that the diamond content of the pipe is markedly different from the three other old pipes. As well, the proximity of DD-2002 offers hope that the dike also could have a diamond content comparing favourably with the nearby pipes.
The plans
New Nadina dusted off its Naket promotion late last year, chatting once again about several untested geophysical anomalies within the area. Mr. Stewart and his companies think that a round gravity survey could be the key to unlocking a new kimberlite or two, and New Nadina and Kettle River plan to complete the surveys this spring. A drill program would presumably follow an encouraging result if Mr. Stewart can cobble together enough cash.
With its existing finds, the Monument play is the top priority for the company, helped along by the fact that Archon Minerals Ltd. and SouthernEra Diamonds Inc. are helping with the bills. Each company owns a bit more than one-fifth of the play, with New Nadina holding about 57.5 per cent of the project.
New Nadina plans a second look at several areas, and that would likely mean new drilling into some of the old kimberlites. If Mr. Stewart can finally manage to get a drill turning on the Monument play, New Nadina's diamond story could attract some notice.
Even a modest drill program might seem a tall order for the struggling little company, based on its latest financial report. At the end of August, New Nadina had less than $20,000 in cash and a working capital deficiency of about $85,000.
Things now seem a bit brighter. The company arranged a private placement of one million units that would add $200,000 in new cash to its coffers. Each unit contains two of the company's 10-cent shares and a single warrant that would be exercisable at a dime over the next year. The company plans to spend the cash on Monument and a metal prospect in British Columbia.
The players
Originally a metal hunter from Halifax, Mr. Stewart now lives in Greenwood, B.C. Gems first caught his fancy in the mid-1980s and he was quick to hop aboard the Lac de Gras bandwagon. His Kettle River was the toast of the town in 1993 and its shares soared to nearly $20 when it seemed that the company would have a share of a rich mine. The play blew up the following year and Mr. Stewart's subsequent diamond promotions fell on deaf ears.
Mr. Stewart also found willing buyers for New Nadina's diamond hunt in Saskatchewan during the early 1990s. The stock peaked at $1 in 1994, but it dipped below a quarter by late 1997 and now can be had for about a dime.
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