from stockwatch 2022-11-15 17:44 ET - Market Summary
by Will Purcell
Dermot Desmond and Mark Wall's Mountain Province Diamonds Inc. (MPVD) closed unchanged at 63 cents on 143,000 shares. Mountain Province is pleased with a recent kimberlite discovery at its 49-per-cent-owned Gahcho Kue mine, 250 kilometres northeast of Yellowknife in the Northwest Territories -- so much so that it cheers the discovery as offering synergies that could entice De Beers Canada, its majority partner at Gahcho Kue, to add Mountain's 100-per-cent-owned Kennady North kimberlites, sitting just 10 kilometres northeast, into the mine plan.
Mr. Wall, president and chief executive officer, applauded interim results from summertime drilling at the northwestern end of the Hearne kimberlite as showing a significant body of kimberlite not known previously. The find, called the Hearne Northwest Extension, was observed in the pit wall with sufficient expanse to warrant the delineation drilling. That work produced intersections of up to 114.5 metres, Mr. Wall cheered, deeming the discovery "testament to the prospectivity of the Gahcho Kue and Kennady lands, where a large orebody can sit right next to an open pit that we have been mining, and remain undiscovered for so long."
And so, Mr. Wall says, he and his crew have been in discussions with De Beers regarding the best way to advance this discovery "considering the underground potential of what appears to be a large orebody -- and an orebody that we know quite well, as we've been mining it via the Hearne pit." He presumably means that, no evidence to the contrary, that the co-venturers expect the Hearne Northwest Extension kimberlite will grade comparably to the main Hearne pipe and will have the same diamond population.
Mr. Wall says that the new kimberlite adjoins the Hearne pit and is right next to existing infrastructure, so the most likely mining method is some form of underground mining. At the same time, Mr. Wall adds, Mountain Province is "looking at, and talking about with our partner, how it is that the Kennady deposits -- specifically Kelvin and Faraday -- may fit into a longer mine life and a different mine life."
Indeed, Mr. Wall says, the two partners are looking at employing "potential underground extraction methodology" at Faraday 2, where a largely underground mining operation could produce "very nice diamonds [of] high quality." He is referring to what is a small and irregular pipe holding just 2.07 million inferred tonnes of kimberlite -- but at 2.63 carats per tonne and with a diamond value pegged at $140 (U.S.) per carat across those 5.45 million carats.
Those 2019 estimates are eyebrow raisers but remember that the valuation is based on barely 600 carats of diamonds. Meanwhile, the 1.9 million inferred carats at Faraday 1-3 -- 1.87 million inferred tonnes averaging 1.04 carats per tonne -- were valued at just $75 (U.S.) per carat, while the 8.5-million-tonne indicated resource at Kelvin, which averaged 1.6 carats per tonne, had a modelled diamond value of just $63 (U.S.) per carat.
At the time, Gahcho Kue was averaging roughly $70 (U.S.) per carat, so in fact, the diamonds in all the Kennady North pipes may not be materially different than those now being mined at Gahcho Kue. Indeed, Mountain Province says that it is likely to update the diamond valuations for the Kennady North pipes next year.
Mountain Province's chief financial officer, Steve Thomas, is also high on the prospects for Kennady North. He says that the project and the underground ore at Gahcho Kue "are synergistic -- they are more valuable together than alone." Accordingly, he sees that as providing a potential path to including the Kennady assets into the Gahcho Kue mine plan. "It is something we are always striving to include, and [we] have De Beers's ear [arguing for] inclusion in the future."
The challenge, of course, is that Mountain Province owns the Kennady North assets, but just a minority stake in Gahcho Kue, so it will presumably have to convince De Beers to acquire a 51-per-cent interest in Kennady North before any mining can occur. Indeed, that has been the major hurdle preventing a deal over the past five years, despite a succession of Mountain Province CEOs nattering into De Beers's ear.