News,kinda
Arctic Star gets set for Siku drilling
2007-06-25 16:41 ET - Street Wire
by Will Purcell
Patrick Power's Arctic Star Diamond Corp. is getting ready to drill the Siku diamond property near Kugaaruk in central Nunavut, which it is optioning from Diamonds North Resources Ltd. Exploration on rival properties in the region along the Arctic coastline is producing a significant number of diamondiferous kimberlites that suggest the region contains large clusters of pipes. As a result, the Siku program carries a budget well in excess of Arctic Star's minimum spending requirement for this year.
The plan
Mr. Power said that the partners planned to drill at least one dozen targets this year, adding that there were so many available features to test that Diamonds North and his company would start the program by "high-grading" their bounty of available magnetic anomalies. The Siku program will also include the usual preliminaries of ground geophysics that will provide additional sorting of the potential drill targets.
Arctic Star agreed to issue 1.5 million of its shares to Diamonds North and spend $2.5-million on exploration by late in 2009, in exchange for a 50-per-cent interest in the property, which spans about 185,000 hectares of ground on the southwestern fringe of Diamonds North's original Amaruk project and nearly surrounds the Darby project, where Indicator Minerals Inc. is having kimberlite success.
Although Arctic Star must spend just $700,000 during the first year of its option deal, Mr. Power said the current plan called for the Siku partners to spend at least $1.5-million, with much of the cash going to the drill program. As well, Arctic Star and Diamonds North will complete another airborne survey, expected to provide electromagnetic data that will yield another big set of drill targets for 2008.
The encouragement
The drilling planned for Siku will attract attention because kimberlite pipes are cropping up across a large part of central Nunavut, but the play also will get a boost from busy programs on rival properties. In particular, Indicator Minerals and Teck Cominco Ltd. plan to spend $8.5-million on the Darby property this year. That program is now under way and will include drilling of at least 40 targets.
Indicator and Teck discovered several kimberlites last year on Darby and a few of the bodies proved diamondiferous, although the counts were unimpressive. A 462-kilogram test of the Iceberg pipe yielded just 24 stones, but the size distribution of the tiny parcel was encouraging.
A smaller batch of rock taken from the Stealth kimberlite yielded a small microdiamond, but small tests of three other bodies proved barren. Despite the mixed result, Indicator and Teck have great expectations for their play, as they think a large cluster of pipes with markedly distinct types of kimberlite may dot the entire property. That would bode well for Siku, if they are right.
Diamonds North is having better luck finding diamonds on its main Amaruk property, about 100 kilometres to the northeast of Siku. The company plans to spend $6-million this year, drilling about 60 targets and completing mini-bulk tests of two of its better finds. The Qavvik kimberlite produced diamonds at a rate of better than one stone per kilogram. As a result, Diamonds North is optimistic a few tonnes of drill core from both Qavvik and Char will yield worthwhile results.
A kimberlite boulder found in the area northeast of Siku provides added diamond enticement. Indicator Minerals pulled 176 stones from just 25 kilograms of the material, and the size distribution curve was encouraging. Therefore, the area southeast and southwest of Kugaaruk is likely to remain busy in the coming years.
Arctic Star closed down two cents to 22 cents Friday on 106,200 shares.