To All
****Canacord's Morning Coffee****
* Northwest Territories Diamond Exploration Activity
Winter/spring diamond exploration activities in the NWT are now in
full swing, with a backdrop of credibility provided by the
anticipation of the start of production at BHP/Dia Met's Ekati mine in
several months, and the filing of the Project Description Report for
Rio Tinto/Aber's (60/40) Diavik Diamond Project on March 6.
On Tuesday, DHK Resources, a private company one-third-owned by each
of Dentonia Resources (DTA : VSE : $0.27 : Issued 11.5M), Horseshoe
Gold (HSX : ASE : $0.35 : Issued 8.9M), and Kettle River Resources
KRR : TSE : $0.62 : Issued 4.6M), provided an update on planned
exploration by Kennecott Canada (KCI or Rio Tinto) on the WI claim
block (along the north shore of Lac de Gras), the DHK block (west end
of Lac de Gras), and re-testing two pipes on the W0 block (SE of Lac
de Gras). Reverse circulation (RC) drilling will be carried out on
the WI block following up known indicator mineral trains, and should
be complete by month end. This program will be followed by detailed
airborne geophysics on both the DHK and WI blocks in early April,
possibly followed by drilling. Re-testing of three known kimberlites
is also planned:
1. the D1-02 kimberlite on the western portion of the WI block (DHK;
SouthernEra 25%; KCI)-this pipe lies on trend with those in the Ekati
mine plan;
2. the D0-41 and D0-42 pipes on the W0 block (DHK 35%; SUF 10%; Aber
15%; KCI 40%)-this is the block hosting the D0-27/D0-18 or Tli Kwi Cho
pipes that were bulk sampled in early 1994 with disappointing results.
Including the DHK blocks, we expect that KCI may spend perhaps
2.5-3.5M on Lac de Gras area exploration this year. This exploration
would also include re-testing pipe(s) on the (former) Commonwealth
claims (Aber 44.4%; KCI 45.6%; SUF 10%), just south of the A21 pipe
part of the Diavik proposed mine plan)-certain pipes such as C42 are
believed to have been tested in the past by only one hole. Further
exploration is also planned for the large Mackenzie option block (KCI
60%; SUF 40%), which covers much of Lac de Gras itself; one kimberlite
known as the EG-130 pipe is located beneath Lac de Gras on the
southwestern extension of the Ekati Fox-Leslie-Koala-Panda trend.
The Diavik joint venture between Diavik Diamond Mines (Rio Tinto 60%)
and Aber Resources (ABZ : TSE : $18.10 :Issued 40.7M; 40%) plans to
spend in the order of $9.0M on exploration on ground in the project
area this year. About $4.3M of this will be spent on drilling four
previously discovered pipes outside of those in the proposed mine plan
i.e., A418, A154 N&S and A21). Currently, large diameter core (LDC),
mini-bulk sampling of the A-11 North pipe, located about 8 km SE of
A418, is underway. This pipe yielded earlier (published results) 117
macrodiamonds (>0.5 mm in one dimension) and 206 micros from 452.5 kg
of core for counts of 2.5 macros and 4.6 micros per 10 kg of sample:
not a bad count for Lac de Gras kimberlites. Potentially this pipe
could join the Diavik mine plan at some stage. A 40,000 line km,
closely spaced airborne survey was completed earlier this year over
the 569,266-acre property, and 60-plus targets were identified for
testing. We believe that the annual hunt for the source of the A369
geochemical anomaly near the northern part of the property will
continue, and that retesting of the A5 kimberlite (EM target portion),
which lies between A418 and A21 in a bay on the east of East Island,
is under consideration.
For Dia Met (DMM.B : TSE : $27.40 : Issued A+B 30.5M) and BHP
Diamonds, exploration at this time is pretty much limited to the bulk
sampling being done on two pipes discovered in 1996. Processing of
about 200 tonnes from the Bear Tooth pipe is believed to be complete,
with the Koala North pipe sample about half done. The microdiamond
read macro/micro-) results were comparable to both the Panda and Koala
pipes, and there is some thought that these pipes may become part of
the Ekati mine plan, perhaps with development of the Misery pipe going
on hold: we would expect the bulk sampling results in the not too
distant future.
To the south, the Winspear Resources (WSP : VSE : $0.80 : Issued
33.9M; 57.3%)/Aber Resources (42.7%; Aber not participating this
year), Camsell Lake joint venture drill program at Snap Lake has been
underway since about March 6. Poor weather delayed the start of
drilling by about two weeks. A second drill should be operating
shortly, and the first portion of two 100-tonne bulk samples of
diamond-bearing kimberlite dike material being taken from the west
side of Snap Lake is believed to have just arrived in Yellowknife at
the pilot plant. The entire drill program will amount to about 7,300
m at Snap Lake (attempting to find the feeder source for the dikes'
sill-like breccia and diamondiferous kimberlite float) and in the CL
25 area of the NE portion of the property where two pipes were
discovered earlier. Winspear is funding the entire $2.7M budget for
1998, following which its interest will increase to approximately
68.5%.
To the northeast of the Snap Lake area, SouthernEra Resources (SUF :
TSE : $11.15 : Issued 30.4M) plans to spend about $1.1M on the Back
Lake/MacKay Lake projects. In very early April, drilling is expected
to begin at Munn Lake [option from Kalahari Resources (KLA : VSE :
0.72 : Issued 29.8M; 19.38%) and Island-Arc Resources (IAR : VSE :
0.50 : Issued 11M; 14.5M f.d. 10.62%)], where an occurrence of
kimberlite float, known as the Yuryi kimberlite exposure, was
discovered last summer. Six pits were subsequently dug, and from
666.06 kg of material processed, 162 micros and 62 macrodiamonds (0.9
macros/10 kg) were recovered. A number of holes were drilled which
confirmed that the Yuryi kimberlite was not in place, but a number of
kimberlite dikes (with different mineral chemistry than the float)
were intersected. A detailed (time domain) EM-47 survey was carried
out on the lake ice, and an anomaly with a coincident bathymetric low
glacial scouring of soft kimberlite?) has been identified; moreover a
lake bottom, sediment, indicator mineral anomaly was identified
immediately down-ice from the geophysical target: this anomaly is a
priority for the current drill season.
To the east of the Winspear Camsell Lake project, Monopros (De Beers)
is drilling the AK-CJ properties of Mountain Province Mining (MPV :
VSE : $5.35 : Issued 42.3M; 90%) and Camphor Ventures (CFV : VSE :
1.75 : Issued 9.7M). Delineation drilling is being carried out on the
Tesla, Tuzo, and Hearne kimberlite pipes found last year, and four or
five other targets near the original 5034 pipe discovery will be drill
tested. The 5034 pipe has an estimated 20.0M tonnes grading 1.5
carats/tonne (1.65 mm mesh cut-off) with an average carat value of
US$55.00 (last estimate). The results of this year's program will be
most interesting as the composite tonnages potentially may be
approaching an economic threshold.
On Monday, Intertech Minerals Corp. (IML : VSE : $0.50 : Issued 13.7M;
19.6M f.d.) announced the commencement of a high-resolution, airborne
magnetic and EM survey of its four mineral claims in the Afridi Lake
area (east of Lac de Gras and north of Mountain Province et. al.). In
1996, three narrow dike-like bodies were discovered on the northwest
corner of the property, and analysis of 711.9 kg of material yielded
eight macrodiamonds (a total of 66 stones) or 0.1 macro/10 kg.
Earlier this year, the Company stated that at least nine priority
targets (diversely defined) existed on the property, and the current
airborne survey may enhance this picture. Intertech owns 90% of this
property with a first right of refusal on the balance.
Back south of Mountain Province et. al., Gerle Gold (GGL : VSE : $0.58
Issued 22.8M) announced in late February that further exploration
would be carried out on its LA1-25 claims in the Doyle Lake area.
Monopros (De Beers) earned 60% in the property in 1997, with Gerle
Gold remaining the operator. Details of the 1998 program are pending,
but Gerle is optimistic as the Hearne Pipe (MPV et. al.) is located
only about 200 m north of its LA-7 claim.
In the context of the speculative nature of diamond exploration
through a short season, our technical focus would be on the
SouthernEra/Kalahari/Island-Arc Munn Lake project and on Winspear's
program at Snap Lake.
David James (204) 988-9602
Regards |
