2023-03-14 17:51 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score for Tuesday was a lacklustre 75-85-150 as the TSX Venture Exchange rose three points to 611. Grenville Thomas and Ken Armstrong's North Arrow Minerals Inc. (NAR) closed unchanged at seven cents on 88,000 shares. Mr. Thomas, chairman, and Mr. Armstrong, president and chief executive officer, are calling upon a long-time associate to resurrect their company's Loki diamond project, south of Lac de Gras in the Northwest Territories.
North Arrow has sold a 0.5-per-cent royalty on the project to Umgeni Holdings International Ltd., a private company owned by Dr. Christopher Jennings, for $374,000. Mr. Jennings, who is also a North Arrow director, previously bought royalties covering Loki such that Umgeni now holds a 2.5-per-cent royalty. Umgeni first acquired a 1.5-per-cent royalty in 2016 for $800,000 in cash, and three years later it upped the royalty to 2 per cent with a $266,000 payment. And so, it seems, both North Arrow and Dr. Jennings have an improved valuation of Loki, despite the modest results over the years.
The cash -- "non-dilutive financing" in Mr. Armstrong's dialect of promoter-speak -- is for further work at Loki. Mr. Armstrong says that North Arrow is now planning ground geophysics over priority kimberlite targets this spring. Investors had best be patient from there, as the preliminary work will likely exhaust the cash before any drilling is considered, but Mr. Armstrong, Mr. Thomas and apparently Dr. Jennings all believe Loki "remains highly prospective for the discovery of new diamond deposits."
This enthusiasm, says Mr. Armstrong, is rooted in discoveries last year north of Lac de Gras on the Ekati property made by Arctic Canadian Diamond Co. (ACDC). As well, he cheers, Loki and the company's nearby joint venture with ACDC have already delivered "discoveries of new kimberlites." They have, if four and five-year-old discoveries of nearly barren pipes count for much -- but remember, that rich discoveries are typically surrounded by a cluster of weakly diamondiferous pipes.
Not much is known about the Ekati finds, Bear and Badger, other than they are northwest of the Sable deposit in the northwestern corner of the property, and that ACDC drilled three holes into Bear to delineate the 1.7-hectare body and assess its microdiamond content. The real news is that ACDC employed "deep machine learning" technology to assess the data and assess the kimberlite potential of the targets, and so Bear and Badger are exploration successes in the geological sense, regardless of their diamond content.
And so, Mr. Armstrong and his crews are pressing onward at Loki, looking for new kimberlites in existing data and the information that will flow from the coming ground geophysics. Like ACDC, North Arrow intends to employ deep machine learning technology at Loki and the machines will presumably be going to school on the existing discoveries in the area, a still short list that includes the No. 465 kimberlite that yielded a solitary microdiamond form 40.9 kilograms of drill core.
But there are other finds in the area, including a cluster of small but significantly diamond-bearing pipes, dikes and blows along the south shore of Lac de Gras on the Monument property, being worked by a group led by Equity Metals Corp. (EQTY: $0.155) and which includes Dr. Jennings and his wife, who paid $1-million for just over a 20-per-cent interest in Monument 16 years ago.
That is no surprise, as back in the early 1990s, when Dr. Jennings was frantically staking the Diavik ground north and east of Lac de Gras for Mr. Thomas and his Aber Resources Ltd., he was also acquiring claims for his own within and south of the big lake. Dr. Jennings thought then -- and may still think -- that the best potential for diamond discoveries lay on that ground he used to launch SouthernEra Resources Ltd. in the early 1990s.
One of Dr. Jennings's finds, the EG05 kimberlite, lies on what is now Loki. It was a more prolific source of microdiamonds, with 28 gems pulled from 165 kilograms of drill core, but still far short of what might get the market enthused. On the other hand, hope does spring eternal, as several of the small Monument pipes graded at about 25 carats per hundred tonnes in tiny tests and Dr. Jennings enthused that they might test at between 50 and 100 carats per hundred tonnes in large samples. And so, finding something larger and with comparable grades at Loki is now the task of the tall foreheads and deep machine learners at North Arrow.