Patrick Evans's Kennady Diamonds Inc. (KDI), up 11 cents to $4.55 on 79,000 shares, has hit 68 metres of vertical kimberlite at Faraday 2. That is one of its longest drill hits yet on the increasingly important piece of the company's Kennady North project, 250 kilometres northeast of Yellowknife in the Northwest Territories. It also has three narrow intersections of less than five metres, suggesting the company is still baffled by the geometry of its complex kimberlite. Mr. Evans, CEO, says Kennady's drilling at the northwestern end of Faraday 2 "has yet to confirm the direction in which the pipe-like body is trending," although he considers the one significant intersection "encouraging." (In true Howe Street fashion, he finds no discouragement in the three narrow hits, although he says the company is "continuing to test various options" to confirm Faraday 2 continues northward.) Kennady's drilling also hit kimberlite on the southeastern end of Faraday 2, intersecting 17.9 metres in one hole and 2.9 metres in a second. Mr. Evans also has an enigma at Faraday 1, but with a cheerier interpretation than first thought. Eight new drill holes into the kimberlite produced intersections ranging from 12.8 metres to "as much as 35 metres." (Investors, used to Kennady drilling nearly 200 metres of kimberlite at the neighbouring Kelvin pipe, were considerably less enthused with the 35-metre hit.) Nevertheless, the eight holes averaged over 22 metres of kimberlite and Kennady now interprets Faraday 1 as another pipe-like body, not the sheet or dike it first appeared to be. This, Mr. Evans says, is "very encouraging," although a good deal more drilling is needed to confirm Faraday 1's continuity and dimensions.
There now seems no doubt that Kelvin, once thought to be a narrow dike, is a kimberlite pipe. (Investors picture pipes as carrots sitting vertically in the ground; Kelvin appears more like one sitting horizontally in a grocer's bin. Further, its shape may well be akin to one of those deformed carrots usually rejected by shoppers.) Orientation and shape aside, Mr. Evans appears to have demonstrated Kennady North's pipes have enough carats to support a mine, although he still needs to determine the diamond values. At last report Kennady Diamonds was touting a target of between 10 million and 13 million tonnes at Kelvin and Faraday, and all the testing to date shows grades handily topping two carats per tonne. If Kennady's Kelvin recently completed mini-bulk sample delivers a diamond value significantly above $100 (U.S.) per carat, it will be a huge victory for Mr. Evans. He picked up the Kennady North project several years ago when De Beers Canada dropped it. He then used it as the means to launch Kennady Diamonds as a public company in 2012.