Greenland is a go - WillP
Metalex plans winter drilling
2006-10-12 15:32 ET - Street Wire
by Will Purcell
Chuck Fipke and Dr. Peter Gregory's Metalex Ventures Ltd. plans to keep busy during the long and cold Arctic winter, and perhaps liven up the company's unlively stock. The company is developing some encouraging drill targets on its property on the western coast of Greenland and it expects to have a drill turning once the lakes freeze. Dr. Gregory and Mr. Fipke have long been Greenland believers, but a rival hunt by Hudson Resources Ltd. is producing most of the promotable news. The company thinks that will change with its current crop of drill targets but investors are skeptical. Metalex's shares dipped below 40 cents earlier this month, down from a January high of 95 cents.
The plan
Metalex has a large land position in the area just south of Kangerlussuaq that all but surrounds Hudson's promising find at Garnet Lake. Dr. Gregory said Metalex's play was "next door to Hudson," with blocks of ground to the north, south and east of its rival. Hudson's main hope lies at the southernmost end of its several tenements, prompting speculation that Metalex's priority targets lie on the southern block of ground. Dr. Gregory said Metalex was not revealing the location of its drill targets, but the exploration opportunities are limited to the south, as the big Sukkertoppen glacier covers most of the Metalex property.
The company is putting most of its effort into the area surrounding a lake that is about five kilometres long and up to one kilometre wide. Metalex produced some surface samples with high numbers of what Dr. Gregory called "really humdinger indicators," immediately down-ice of the lake. The company collected samples surrounding the body last year, coming up with convincing evidence that the bedrock source lies within the water.
Metalex completed ground magnetic and gravity surveys in the area and found a number of coincident anomalies that it now considers immediate targets for drilling. More surveys are planned, Dr. Gregory said, because the earlier effort covered just a part of the lake.
Those surveys will start as soon as the ice is thick enough to support the equipment. The property lies near the Arctic Circle, so light will be a big problem through December and January, but Dr. Gregory said Metalex's crews could still work. Metalex collected lake sediment samples by drilling from the ice early last year, so the company has some experience working during a Greenland winter.
Metalex may wait until the end of its new ground surveys to drill, although it has enough targets to run a concurrent program, at least during the latter stages of its geophysical work. That suggests February and March will be a busy time on the ice of what Metalex calls Sturgeon Lake.
Getting an early jump is important. If Metalex does hit a kimberlite or two with its drilling, the company would want enough time to process the rock for diamonds, and then conduct a new program on the finds before the onset of the next winter. Metalex did not find the promising indicators until late last year and it had to wait several months to resume its chase.
The existing targets are large, estimated at about 250 metres in diameter. That presents intriguing size possibilities in a region that has so far yielded just a series of kimberlite dikes and blows. Although the hunt for big pipes has so far been unproductive, Hudson Resources thinks it is cobbling together enough kimberlite at Garnet Lake to make a worthwhile project.
A lengthy kimberlite intersection by Metalex would be an easier sell, but the company will still need good diamond counts. Dr. Gregory described Metalex's Greenland indicator minerals as some of the best and most abundant that Mr. Fipke had ever seen on an exploration site, but the market is not as eager to buy Metalex's steady flow of indicator enthusiasm in advance of good diamond counts.
Metalex gained four cents to 44.5 cents Wednesday on 13,000 shares.