We just don't have enough information yet to make any final judgment calls here. We do know however, that mining costs in NWT are estimated at $40-/tonne, and in AB estimated at $15-/tonne. That in itself is highly significant (0.375 times). It's simple math, calculated on a value per tonne.
That's just over 1/3 the cost! If this were equated with Gold mining, we could make such hypothetical calculations as: if NWT cost was, say, $200-/oz to mine AU, AB's cost would stand at $75-/oz to mine. That's quite a difference in profit margin, especially considering any decrease in market demand that might occur. Imagine if gold fell to $100-/oz (perish the thought), an Alberta mine would hypothetically still reach a profit! - - This may not be a fair comparison, but I use it to show the significance in extraction costs. I don't think anyone would argue that this is not a crucial factor in determining deposit economics.
Yes, of course, gem quality is an important consideration. --In Alberta, at this stage, if anyone is implying that there is a low gem count in diamonds thus far, they are off the mark, imo. If anything, I think we've had hints to the contrary-- that there IS gem quality. Many of the larger stones have been described as clear with little or no inclusions. The notorious fancy yellow (which is said to be a superior quality fancy :) is an example.
Further, some indications have been made that crystals may be eclogitic, meaning larger and higher quality diamonds, on average. I have not seen much discussed evidence of this (eg., associated mineralogy), but,... we don't yet know. Thus, forgive my speculation. And on that same token, it's early to discount this deposit, just as it's early to say this deposit is worth so much/tonne (as in, "it's a wrap" as JohnF. would say!). -- a rough value per carat would be helpful.
We need a bulk sampling program to accurately begin to ascertain all that. At this point if Ashton, experts in the biz, see fit to go ahead with such a costly program, I think it is proof in the pudding of their confidence (for as we know, Ashton Canada is NOT a paper play-- 62% of outstanding shares are held by their parent co.).
In terms of E&D, we haven't even drilled down to diatreme yet (to my knowledge), where the likely lode lies, with diamonds in higher numbers and with greater distribution consistence (is this not accurate ?). For ex., K14 has only been drilled to 200m, stopping in kimberlite. My research indicates that diatreme facies begin at 300m, if the pipe is in tact. That's where the BULK of deposits lie. And as a big fat bonus, it appears Alberta's pipes are largely uneroded, adding decades to a mine's life due to tonnage!
- - -
Most comparisons to NWT are premature, though effective for entertainment purposes and spawning discussion! ;) -The Argyle referred to is not necessarily a fair comparison to this area, as yet anyway. It IS the largest diamond producer in the world, but as George has pointed out, preponderantly industrial grade. The real comparison may end up being the rare fancies that lend true (and perpetual) profitability, for the life of the mine. Either way, a profitable mine is a profitable mine.
In terms of logistics, I think most will agree, Alberta has the red carpet. And in terms of potential, we've got the diamondiferous pipes, huge ones, so far. I believe that Alberta will prove up richer deposits yet. Ashton has barely dented their properties, with prime targets being continually added to the extensive list. It is yet to be revealed.
So, until we know more, this speculative play still offers substantial upside.
Like it or not! :^)
(sorry for length)
G'luck to all,
-j
:>
This is merely my opinion, and an investor should not risk more than they can realistically afford to part with. |
