Much Ado About Very LittleDiamond & Specialty Minerals Summary for Dec. 24, 2019
2019-12-24 13:11 ET - Market Summary
by Will Purcell
Dermot Desmond and Stuart Brown's Mountain Province Diamonds Inc. (MPVD), unchanged at $1.13 on 82,000 shares, rolled out some Christmas candy for shareholders this week with word that its recently discovered Wilson kimberlite has yielded plenty of commercial diamonds from additional drill core. The company and De Beers Canada, its majority co-venturer at Gahcho Kue, discovered Wilson near their Tuzo pipe in spring. At the time, they had tested 115.2 kilograms of kimberlite and recovered five stones larger than a 0.85-millimetre cut-off. Four of them averaged just 0.01 carat each, but one weighed 0.28 carat, a result that computes to 277 carats per hundred tonnes.
Mountain Province and De Beers have now processed an additional 1.59 tonnes of Wilson kimberlite, recovering 81 additional diamonds larger than the cut-off. Those stones weighed 2.01 carats, which works out to a still significant but less impressive 126 carats per hundred tonnes. Mr. Brown, Mountain Province's president and chief executive officer, said nothing about the weights of the largest diamonds, but there were three other stones roughly comparable in size to the one 0.28-carat gem recovered earlier. (They were perhaps a bit smaller, given that promoters rarely suppress good news.)
Fortunately, the grade and size distribution profile of the Wilson kimberlite are not critical, as the rock lies within the proposed pit shell for the big Tuzo pipe, so it will be mined regardless of its diamond content. Once mined, it need only have enough value to warrant processing, a hurdle that should be easily surpassed. Further, while the latest sample grade is barely half of what Gahcho Kue has been averaging so far, there is no reason to expect, at this early point, that Wilson's actual grade will be materially different than the rest of the Gahcho Kue pipes.
Mr. Brown cheered the latest drilling and diamond counts from Wilson as "evidence that the life of the Gahcho Kue mine is still an open-ended opportunity." Perhaps: Life is, after all, an open-ended opportunity unless one is staring down the barrels of a firing squad, but the drilling so far does not suggest a long-lived addition to the mine plan. De Beers believes, based on its modelling so far, that Wilson holds a target for further exploration of between two million and three million tonnes, an amount of rock that the mine would chew through in three to five months.
Mr. Brown nevertheless enthuses that Wilson "has the potential to make a valuable contribution to the mine," adding that it represents just early results of the joint venture's exploration efforts. Indeed, those efforts have added modest amounts of kimberlite near the three main pipes, 5034, Hearne and Tuzo, which combined should add a year or two to the life of Gahcho Kue.
That is good news for Mountain Province in one way of course, but not in another: The company is also trying to entice De Beers into buying into the notion -- not to mention the project itself -- of mining the Kelvin and Faraday kimberlites at some point, sooner than later; sooner being in the early-to-mid-2020s, perhaps, later being after all the Gahcho Kue kimberlite is processed in the early 2030s.