Ashton adds carats to Renard harvest
Ashton Mining of Canada Inc (TSX:ACA)
Shares Issued 76,419,025
Last Close 2/11/2005 $1.31
Tuesday February 15 2005 - Street Wire
by Will Purcell
Ashton Mining of Canada Inc. has another encouraging set of diamond counts from one of its Renard pipes. The company's prospects seemed to sag last year, when two of its Renard kimberlites produced rather modest grades. The new year got off to a better start when the small Renard-3 pipe produced a hefty grade and encouraging diamond size distribution. Renard-2 added to the rosier picture last week, with a toutable tally of gems and an encouraging stone size distribution. The results offer Ashton a bit of breathing room for its valuations, which are expected within a few months.
The results
Ashton extracted 162 tonnes of kimberlitic material from Renard-2 during its reverse circulation drilling this summer. The rock contained 146 carats of diamonds larger than a 1.18-millimetre screen, good for a grade of 0.90 carat per tonne. That was a mild surprise, although Ashton did produce a greater grade from a small core sample late last year.
That sample yielded 13.3 carats from 11.5 tonnes of rock, indicating a grade of 1.15 carats per tonne. The initial batches of kimberlite that Ashton processed had more modest diamond contents. Those earlier samples were quite consistent, producing grades close to two-thirds of a carat per tonne. Those first three batches weighed a total of 11.5 tonnes and they produced 8.72 carats of diamonds.
That suggested a grade of 0.64 carat per tonne, which is significantly below what Ashton found in its two larger tests. Ashton used a smaller cut-off for those early samples, and that adds to the promise of the latest tests. The company typically uses a 0.85-millimetre sieve for its small samples and the larger 1.18-millimetre mesh for the larger tests.
The latest Renard-2 result was in the range of expectations for the body, according to Ashton spokesman Mike Westerlund. The tally fell short of the grade produced by the last small batch of core, which the company's manager of investor relations termed an outlier. "In small samples you are going to get bounces in the results," he added.
The diamond count from the larger sample is particularly encouraging, as there was also a reasonable risk that all of Ashton's Renard-2 tests were rosy outliers. Based on all the earlier testing, it was at least plausible that a larger test using a larger cut-off could falter, coming in with a grade under one-half carat per tonne. That no longer appears to be a major concern, which is good news for the Renard play.
The Renard-2 sample also revealed a diamond parcel with some larger stones. Two diamonds weighed over two carats and 11 others topped the one-carat mark. In all, those 13 diamonds likely weighed something just under 20 carats and that would account for about 13 per cent of the Renard-2 parcel. The two-carat diamonds weighed 4.32 carats, which is about 3 per cent of the Renard-2 diamonds by weight.
Size matters
The full Renard-2 sample weighed 187 tonnes and the rock held 168 carats. That tally supports an average grade of 0.90 carat for the 0.6-hectare pipe. That grade ranks second among the four potentially economic Renard kimberlites. That is promising, although the small size of Renard-2 dampens the enthusiasm somewhat. The body with the second best grade is also the second smallest of the four pipes.
The grade is promising, but the best surprise from Renard-2 is the coarse size distribution of its diamonds. The Renard-2 haul contains 14 stones with a weight of at least one carat. Ashton did not say how much all of those gems weighed, but the weight may have topped the 20-carat mark. That indicates that one-carat diamonds account for about 12 per cent of the Renard-2 parcel.
The Renard-2 results compare well with what Ashton recovered from Renard-3, which lies immediately to the south. Ashton recovered 204 carats from 165 tonnes of kimberlitic rock that it extracted from Renard-3 over the past few years. That computes to a grade of about 1.24 carats per tonne, tops among the four pipes. Although it has the best grade, Renard-3 also ranks as the smallest of the four bodies. Like Renard-2, the small size of the pipe mutes the grade encouragement.
Renard-3 also had a promotable haul of larger diamonds. There were 12 diamonds that weighed more than one carat, including five stones that topped the two-carat mark. In all, the dozen diamonds probably weighed close to 23 carats. That would amount to about 11 per cent of the weight of the entire Renard-3 parcel.
Renard-3 did have a greater proportion of two-carat diamonds. The five stones likely weighed close to 13.5 carats and that works out to about 6.6 per cent of the entire diamond haul. Meanwhile, the two two-carat diamonds weighed 4.32 carats, which accounts for just 2.6 per cent of the parcel weight.
That might suggest that Renard-3 has a better size distribution, but it is too soon to jump to such a conclusion. With just a few two-carat diamonds in each parcel, the proportions are subject to a large degree of error. As a result, the one-carat populations may be more meaningful. If so, that will bode well for Renard-2 being a significant source of larger diamonds.
Detailed microdiamond recoveries provide an excellent method of predicting the results of larger samples, but normal statistical error can occasionally skew hasty conclusions. In the case of Renard-2, that statistical variation delivered a pleasant surprise, as the pipe could have a diamond size distribution comparable with its smaller sister.
That possibility was not evident in the initial diamond counts from the two pipes. There was no doubt that Renard-3 would deliver a toutable array of larger diamonds right from the start. Ashton recovered some larger stones during the caustic fusion stage and two of the largest stones shattered during the initial crush.
Renard-2 had significantly higher stone counts, but few larger stones. Ashton recovered microdiamonds at a rate of nearly 900 stones per tonne, but only five of the 145 stones were longer than 0.5-millimetre in two dimensions. Three of the diamonds topped the one-millimetre mark in two dimensions.
A comparable amount of material from Renard-3 produced microdiamonds at a rate of just 400 stones per tonne, but 17 of the 81 diamonds were two-dimensional macros and six were longer than one millimetre in two dimensions. One of the diamonds weighed an impressive 0.13 carat and the Renard-3 tallies did not include the two broken stones that may have topped that weight.
Expanding Renard
A key part of Ashton's effort in the Otish Mountains region this year will be a drilling program on Renard-2 and Renard-3. Mr. Westerlund said that the extent of the Renard bodies was still uncertain, and Ashton would be doing "a lot of work to push the tonnage up on all of them."
Renard-2 is one of the key pipes that Ashton pegged for drilling. The company poked around the edges of the pipe in earlier drilling efforts, and that work apparently produced smaller kimberlite intersections. Finding a significant amount of kimberlite peripheral to the main pipe and with a comparable diamond content would be a welcome bonus for the Renard play.
Opportunities also exist at Renard-3 and Renard-4. The latter body has a promising zone that Ashton is checking out, but there is also a good chance that the size of the pipe will grow with a new round of delineation drilling. Expanding Renard-3 would prove particularly promising, based on its grade and small size. Adding a significant amount of kimberlite to the tally could boost revenues, but also lower operating costs.
Renard-4 and Renard-65 will get one last shot at boosting their diamond grades before Ashton begins a detailed evaluation of their merits. The company has about 60 tonnes of rock from Renard-4 to process, along with about 25 tonnes of kimberlite from Renard-65. The two pipes are significantly larger than their richer sisters, and a boost in grade would be promotable.
So far, Ashton has a 55-carat parcel from 123 tonnes of Renard-4 rock, which works out to a grade of 0.45 carat per tonne. That could be marginally economic, depending on the result of Ashton's valuation exercise, and relatively small grade gains could be significant. Renard-4 covers about one hectare at the surface, which makes it potentially larger than Renard-2 and Renard-3 combined.
Boosting the grade at Renard-65 would also have a promotable payoff. Ashton gleaned just over 40 carats from nearly 160 tonnes of rock, and that supports a grade of barely one-quarter of a carat per tonne. One-10th of the diamond weight lies in a single stone, and that suggests that the modest sample grade might actually be optimistic. As a result, it will be a welcome relief of the remaining small batch of rock has a healthier grade and some more large diamonds. Renard-65 covers about 1.5 hectares at the surface, making it the largest of the four Renard pipes.
The diamond valuations are due within a few months and that will help determine Ashton's future plans at Renard. Mr. Westerlund said that until Ashton knew the value of its Renard gems, the company could not predict its next steps. Drilling of the better pipes seems a certainty, and the company is willing to get a jump on that work, in advance of its valuations.
The company should have plenty of news over the next year. Ashton will also have diamond results from mini-bulk tests of Renard-9 and two Lynx samples. Beyond that, the company should have kimberlite intersections and diamond counts from its delineation drilling program, as well as its exploratory drilling beyond the Renard area.
Ashton added cents on Monday, closing at $1.35. |
