Twin identifies new targets
Twin Mining Corp (TSX:TWG)
Shares Issued 132,788,542
Last Close 2/22/2005 $0.195
Wednesday February 23 2005 - Street Wire
by Will Purcell
Hermann Derbuch's Twin Mining Corp. is touting new hope for its Jackson Inlet diamond play on Brodeur Peninsula, on the northwestern corner of Baffin Island. The High Arctic is becoming a hot district for diamond explorers, but Twin was the first company to deliver promotable diamond results from the region. That was several years ago and Twin's play has been struggling of late, but there have been other hints of sparkle on Brodeur. Twin now has new encouragement from preliminary work on its claims, and its earlier results support hopes that new finds could be significantly diamondiferous.
The Brodeur encouragement
Twin Mining now has plenty of drill targets on the northern portion of its Brodeur play. The company has over 75 intriguing geophysical anomalies, including many that lie in clusters. The magnetic anomalies have signatures resembling kimberlite bodies and are generally circular in nature. The features appear to be the size of typical kimberlites, with diameters ranging from 90 metres to 250 metres.
Most of the potential kimberlites are nothing new. Last fall, Twin touted the presence of 67 drill targets on the Jackson Inlet blocks. Nine of the features lie along a 12-kilometre-long corridor near its Cargo-2 site. As well, there is a cluster of targets about eight kilometres east of the feature.
Another cluster of targets lies about six kilometres southwest of Cargo-2 and a final cluster turned up 14 kilometres farther to the southwest. Twin's mineral sampling is not as advanced on the eastern block, but the company has bits of mineral hope near some of its anomalies.
On the western block, Twin found four smaller clusters of targets. The groupings contain between three and six drillable anomalies and lie from 10 to 15 kilometres to the south and west of Twin's Freightrain pipe. All the clusters appear supported by Twin's mineral work, which produced arrays of indicator minerals.
Four of the magnetic anomalies lie on the northeasternmost part of the Vista property, which was caught by the southern fringe of the geophysical survey. Meanwhile, Twin directed much of its required Vista spending on mineral sampling.
The company collected 1,200 samples last year and it now has preliminary results from about 700 of the tests. The mineral grains came from several broad swaths running in a northeasterly direction across the property. So far, Twin thinks it has at least 15 clusters of indicator minerals on the Vista play.
The company does not have the detailed results from its grains, but Mr. Derbuch and Twin have great expectations that geochemical analysis will point toward a diamondiferous source. As well, two of Twin's indicator anomalies coincide with two geophysical targets identified on a survey completed about 20 years ago. The two features could be kimberlites, although the coarse nature of that survey leaves much to the imagination.
Nevertheless, the results from Jackson Inlet and Vista seem encouraging that clusters of potentially diamondiferous kimberlites exist across large parts of Twin's Brodeur play. It will likely take more detailed mineral sampling and geophysical surveys to nail down the best of the drill targets. Still, Twin has had success at advancing other preliminary targets to the drill stage.
The road to today
Twin Mining picked up its first piece of the Brodeur project in the spring of 2000. The company signed a deal with the Niagara Falls-based Helix Resources Inc., giving it what was then a 2,885-hectare property covering the old Zulu kimberlite pipe and the nearby area. The arrangement required Twin to make a series of cash and share payments to Helix and to complete a study on the project.
Twin added 53,000 hectares of ground to the play in 2001, when it staked new claims based on its encouraging results. The following year, Twin added more ground, staking another 34,000 hectares of claims. The play seemed past its peak by 2003, but Twin made its biggest land grab that year, snapping up another 412,000 hectares of claims that it now calls the Vista block.
At one time, Twin was the lone voice touting the merits of the High Arctic diamond hunt, but the company soon gained some neighbours. Kennecott Canada Exploration Inc. picked up a series of big blocks all across Brodeur Peninsula, including a big block immediately northeast of Twin's play. The Canadian exploration arm of mining giant Rio Tinto found some diamondiferous kimberlites just to the northeast of the old Zulu pipe, which Twin successfully repackaged as its Freightrain kimberlite.
De Beers Canada Corp. was another diamond major to take a liking to Baffin Island. The company grabbed some large blocks of ground on the northwestern part of the big Arctic island, including one block on the southern part of Brodeur Peninsula. Parts of the De Beers play are just north of the Melville Peninsula project of Stornoway Diamond Corp. That property is yielding some promising diamond results.
Twin's piece of the Brodeur hunt caught its second wind last spring, when Kennecott signed an option deal on the Jackson Inlet part of the play. The deal covered about 110,000 hectares of ground, including Twin's Freightrain and Cargo discoveries. Kennecott seemed a believer, as the arrangement required the company to spend $10-million on exploration to earn a 56-per-cent stake in the play.
The arrangement fell apart just a few months later, apparently because of concerns that Kennecott had with the original Helix deal. The two companies parted ways on friendly terms, but Twin wasted little time finding a new partner, this time covering the southern claims. Stornoway Diamond agreed to an option deal, although the terms for Vista were decidedly less favourable to Twin than the Kennecott arrangement for the Jackson Inlet claim blocks.
Mr. Derbuch's company had to spend the first $900,000 on exploration, although Stornoway provided half of the cash through a purchase of Twin shares. After that, Stornoway must decide whether to take up its option. To earn a 51-per-cent interest, Stornoway must spend $3-million on exploration, including $1-million in the first year of the deal.
The Brodeur promise
The first promotable news from Brodeur came from Freightrain, which is still the most advanced project in the High Arctic. Originally called Zulu, the find did not generate much interest until Mr. Derbuch crafted an effective promotion out of the earlier diamond results.
Twin produced some intriguing diamond counts of its own from the pipe in 2002, and the company completed a small mini-bulk test from the surface of Freightrain the following year. In all, about 18.4 tonnes of material produced a grade of nearly 0.20 carat per tonne. That prompted a larger test.
In 2002, Twin completed the processing of 228 tonnes of Freightrain kimberlite. The rock revealed 46.2 carats, supporting an average grade of 0.20 carat per tonne. That value was not enough to inspire speculative interest, but there were signs that the core part of the body had a higher grade. About 120 tonnes of material from two sites in that better region accounted for 31.4 of the carats, good for a grade of about 0.27 carat per tonne. The company's consultant subsequently modelled a grade of about 0.5 carat per tonne for that core region.
Most of the larger diamonds originated in the two core samples, and that sparks hope that Brodeur Peninsula can deliver diamonds with a coarse size distribution. The largest diamond weighed 1.54 carats and three others topped the 0.80-carat mark.
Twin also found encouragement in its Cargo-1 pipe, not far from Freightrain on the western Jackson Inlet block. The company recovered 241 diamonds from about one tonne of kimberlite. The haul included two diamonds larger than a 1.18-millimetre sieve and one of them clung to a 1.70-millimetre screen. That stone weighed nearly 0.09 carat, adding more support for the Brodeur hunt.
Kennecott Canada also had success with its hunt in the area just northeast of Twin's Jackson Inlet play. The company turned up three kimberlites in 2003, and at least one of the finds was worthy of mention by Rio Tinto when it discussed its worldwide exploration effort in the fall of 2003. The Nanuk and Kuuraq pipes delivered diamond counts that may have come close to what Twin found in its kimberlites, but the real news came from the third Kennecott find.
The company processed about 1,500 kilograms of rock from the Tuwawi pipe, which is about 250 metres long and about 150 metres wide. The company collected 319 diamonds that clung to a 0.15-millimetre sieve, and the haul included a promotable array of larger stones.
One dozen diamonds remained on a 0.85-millimetre sieve, which is the minimum cut-off typically used in a smaller mini-bulk test. Five diamonds remained on a 1.18-millimetre sieve and a single stone clung to a 1.70-millimetre mesh.
Those recoveries suggest Tuwawi has a coarse size distribution that could be comparable with what Stornoway found in its AV-1 body on Melville Peninsula, about 500 kilometres to the south. The grade of Tuwawi seems modest however, probably closer to what Twin found in Freightrain.
It will be a pleasant surprise if even one of the Tuwawi, Freightrain and Cargo discoveries ultimately proves to be economic. Nevertheless, the significantly diamondiferous pipes add considerable hope to the Brodeur hunt, which remains relatively unexplored territory.
Twin slipped one-half cent on Tuesday, closing at 19.5 cents on volume of 157,800 shares. |
