I think this report is referring to what MMU has on its website, very bullish IMHO.
*** SITUATION ALERT **** ALBERTA DIAMOND PLAY ***
The Resource Indicator has just issued a very interesting
Situation Alert on the Alberta Diamond Play. We asked for and
received the Editor's permission to forward it to our restricted
email list.
If you want more information on The Resource Indicator contact
the Editor, Sudhir Khanna, at khannas@interlog.com
or
visit their page at
goldsheet.simplenet.com
Here it is........
SITUATION ALERT THE RESOURCE INDICATOR
___________________________________________________
Vol. 2, No. 13 Staking VALUE before others
March 4, 1998
THE ALBERTA DIAMOND PLAY
On February 26, 1998, Ashton confirmed a new cluster of kimberlites
30 km to the east of the established clusters. K11 and K15 were found
beneath overburden depths of 13.4 and 42.7 metres respectively. With
anomaly dimensions of 500 by 250 metres (K11), and 600 m by 200
metres (K15), these kimberlite bodies may represent significant
tonnages. The discovery of new kimberlites by Ashton has been
expected by the market but the size of the anomalies came as a
pleasant surprise. Further results from these samples are expected over
the next few weeks. With an aggressive drill program and the
knowledge of how to interpret anomalies, Ashton should have no
problems discovering additional pipes. With this in mind, and no
news yet from the area juniors, we can expect ACA and partner PUG
to continue to demand the attention it deserves.
Several area juniors have active drill programs underway. None has
made an announcement on their progress. The market is very clear in
what it is telling us - none have intersected kimberlite yet but there is
still hope. I have mentioned several times in the last few write-ups
that Ashton has the "secret to turning anomalies into kimberlite". The
juniors are still in the learning curve. Given time, the juniors will also
discover how to properly interpret a combination of data as potential
drill targets. The discussion below summarizes what a well thought
out exploration program should include and thus what you, as an
individual investor, should know about your potential investment.
GEOLOGICAL REALITIES OF THE AREA
Geological reality will soon force the obvious out in the open and may
result in the market revaluing the players. The thoughts below are not
new but are soon becoming more accepted.
* Overburden is a big deal. You can't hit kimberlite if you can't hit
bedrock.
* The boundaries of the "Buffalo Head Craton" are not well defined.
* Till geochemistry may be an effective tool in some parts of
Alberta.
The last two points are not of immediate concern but the first point is
very pertinent to what is happening.
MOMMY, HELP ME - I CAN'T REACH IT!
Ashton's finds are on a bedrock island (approximately 750,000 acres)
in an ocean of till. Approximately 25% of this area contains zero to 15
metres of till, 15% is 15 to 45 metres thick, 25% is 45 to 150 metres
thick and about 35% is over 150 metres thick with some areas up to
350 metres thick (1,200 ft). Thus, part of the juniors prioritization
process should involve the identification of targets above little
overburden. Most of the land surrounding the Ashton main property
covers old pre-glacial channels filled with till. These water saturated
till deposits present a formidable obstacle to exploration due to their
great thickness and because they contain large, dynamic aquifers. This
is part of the reason why Ashton limited their staking. It is no accident
that the surrounding land was left for others to pick up.
These tills are filling ancient channels and are full of water. This
makes drilling very complicated and would greatly alter, or destroy
any mining economics. For example, to the southeast of Ashton's
property there exists a very deep body of till, roughly coincident with
the intersection of the Red Earth and Wiau "thalwegs", or pre-glacial
channels. These are monstrous, 50 to 80 km wide channels filled with
aquifer-bearing glacial sediments, some of which contain significant
interbeds of magnetite-rich gravels.
These magnetite rich gravels will cause magnetic anomalies to be
registered. As an investor, you should be asking the players to
demonstrate that their targets contain little till cover. Juniors drilling
these anomalies will experience drilling problems due to water and
encounter thick till. Look for these signs to adjust your portfolio
appropriately. One should not conclude from the above that all land
surrounding the Ashton main property is bad. There will be islands of
bedrock within the grounds. As an investor, you should be making
sure that the opportunity to hit bedrock exists.
Till overburden is a brutal fact of life and will now be widely
recognized as two drill programs in the area are abandoning holes after
encountering over 400 feet of till. It has recently come to my attention
that the 1994 drilling, into pronounced anomalies, undertaken by
Ridgeway on some of their remaining permits, stopped at 450 feet, still
in till. With this in mind, drilling trouble on Montello's first two
targets and lack of news from the remaining targets, leads me to
conclude that the first few targets contained thick overburden and thus
have not intersected anything of significance.
Before the January 2, 1998 write-up on the Alberta Diamond Play, I
had asked Montello to estimate the till thickness above their main
targets. I was given an estimate of anywhere from 0 to 45 metres.
This appears to be incorrect. This is speculation on my part and
should not be taken as a sign to abandon our small investment in MEO
or NCS (20% of ADP investment). There are many targets left on the
existing properties and on several other properties. It should however,
alert you to be disciplined as suggested through strict observance of
our maximum loss limits, $0.50 for MEO and $1.75 for NCS. In the
case of NCS, I suggest that you raise the limit to $2.00. The area
juniors are refining their target prioritization methods and probability
would dictate that kimberlite, outside of the main Ashton holdings,
should be hit by the end of May.
DON'T REACH, THE CRATON IS RIGHT HERE
Neither the Geological Survey of Canada nor the Alberta Geological
Survey recognize anything called the Buffalo Head Craton. I have also
made the mistake of referring to the area as the Buffalo Head Craton (a
promotional construct invented during the 1994 diamond frenzy)
which implies defined boundaries. The surveys do however recognize
the Buffalo Head Terrane as a convenient way to refer to an area
bounded by magnetic gradients.
The boundaries of these terranes are established primarily by regional
magnetic gradients. Within these terranes deep oil drill samples have
been analyzed. In order to define a singular craton, such as the alleged
Buffalo Head, measuring 300 by 600 km you would need about 3,000
samples with full isotope analysis. The Buffalo Head terrane is
defined by about 25 samples of which only about 11 have had full
isotope work. The neighboring Chinchaga has about 8 samples with
full isotope work. The results overlap so that no meaningful
distinction can be made. A conclusion that one terrane is more
favorable over another for diamonds is, in my opinion, over-analyzing
the available data.
With the above in mind, area juniors outside of the "Buffalo Head"
terrane may hold some surprises. Thus, your basket of Alberta
Diamond investment should consider holding some players outside the
above terrane for maximum leverage to the play.
DID YOU DROP SOMETHING?
In my January 2, 1998 Alberta Diamond Play article, I wrote that "Due
to thick glacial overburden, till sampling which works well in the
NWT, is not possible. This means that there will be no prioritization
tool for potential targets." Mike Dufresne of Apex does not agree with
this statement because it implies that till sampling is not an effective
tool. Not all of Alberta has thick tills. The basal till near the
Monopros pipe is full of diagnostic indicators. Simply put, till
sampling should not be ignored.
LOOK WHERE YOU ARE WALKING
In addition to the above, the following information should also be
considered by investors when identifying potential investments.
* Seismic data can and should be used for upgrading magnetic
anomalies to higher priority drill targets. Juniors working in areas
of thick till should review existing (oil patch) seismic data before
drilling. Look for this as a sign of a technically sound exploration
program.
* As indicated in the last write-up by Apex, investors should look for
evidence of vegetation anomalies (kill zones) that coincide with
geochemical and magnetic anomalies. This type of target should
be given higher priority.
* More important than the cratonic clues provided by chemistry is
the gravity data. The ACA find is on a gravity low, as are, the
NWT pipes. As an investor, you should be looking for gravity low
targets, in addition to little till.
* It has been noted that some of Ashton's kimberlite occurrences
occur on the intersection of NS and SE magnetic gradients. The
structural controls on Alberta's kimberlite intrusions are very
important. This information should be sought on any targets
identified by the area juniors before considering an investment.
A natural question, after a review of the above, should be - Are there
any juniors with targets that meet the above requirements? There are.
I am currently completing my due diligence on one of them and will
do a full write-up over the next few days in the form of a Situation
Alert.
Sincerely,
Sudhir Khanna, P.Eng.,
Editor, The RESOURCE INDICATOR
Staking VALUE before others
========================================
As always, you can contact me at khannas@interlog.com with any
questions or comments. |
