from stockwatch 2023-03-01 17:28 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score for Wednesday was a positive 107-74-129 as the TSX Venture Exchange rose four points to 634. Grenville Thomas and Ken Armstrong's North Arrow Minerals Inc. (NAR) added one-half cent to nine cents on 197,000 shares.
North Arrow is focused elsewhere -- Great Slave lithium and Saskatchewan diamonds come to mind -- but late last week its attention briefly snapped back to Naujaat in Nunavut, where Mr. Thomas, chairman, and Mr. Armstrong, president and chief executive officer, hope there are enough orange-yellow fancy diamonds to make the big but low-grade and otherwise low-value Q1-4 kimberlite economic.
North Arrow has just completed cutting and polishing of two of the fancy gems recovered last year from a 2,000-tonne bulk sample of the pipe. The company had the work completed by Peter Ravenscroft's Burgundy Diamond Mines Ltd. -- no surprise since Burgundy is a 40-per-cent co-venturer at Naujaat and could become a 60-per-cent owner if it pays for a 10,000-tonne test in a year or two.
Mr. Armstrong says the gems were cut from the "biggest, best-quality, fancy-colour rough diamonds recovered so far from Naujaat." One of the resulting sparklers weighed 0.31 carat, the other 0.21 carat, and both were described as rectangular, radiant-cut gems and the "largest polished fancy colour diamonds cut from Naujaat to date."
Mr. Armstrong and his crew were pleased with the polished yield, described as about 38 per cent for both gems, which implies the two rough diamonds weighed about 0.82 and 0.55 carat respectively. This is a significant improvement over what North Arrow managed several years ago when it polished a few gems from its 2014 bulk sample of Q1-4.
Investors may recall the pictures of those first finished gems -- North Arrow's unofficial retort to John Kaiser's dismissal of the Naujaat diamonds as being akin to boogers, ear wax, or worse. One picture showed a mammoth vivid, fancy, orangey-yellow diamond polished to perfection and grasped in the teeth of some massive machine. Of course, photography can play with one's imagination -- that gem was but a 0.12-carat speck resting gingerly between the tongs of a pair of jewellers' tweezers.
Now, with its somewhat larger polished gems in hand, North Arrow and Burgundy will have the finished goods formally certified as fancy-coloured diamonds by the Gemological Institute of America (GIA), which -- if the grading report goes as expected -- would give the Naujaat promotion a boost. (Until now, the Naujaat co-venturers have been relying upon their own assessments and that of the Saskatchewan Research Council, which classified the rough diamonds according to the GIA scale.)
Naujaat will need a good boost, as the grade of Q1-4 is about 30 carats per hundred tonnes using a standard cut-off and a bit short of 10 carats per hundred tonnes using a De Beers No. 9 sieve, which eliminates diamonds weighing less than about 0.18 carat. The result does suggest Q1-4 has a promising size distribution profile and with a potentially greater contribution from the fancy gems: Of the 746 diamonds larger than a No. 9 sieve recovered from 3,350 tonnes of kimberlite, 13.4 per cent were fancies by count and a full 15 per cent by parcel weight.
While the data is promising, larger tests will be needed to make the case convincingly. There is no doubt that Q1-4 has a coarse size distribution curve -- the largest diamond recovered weighed an impressive seven carats and several plus-one-carat diamonds were recovered. That biggest gem was classified as boart -- a synonym for "junk destined for the business end of a drill bit" -- and several other of the larger gems did their best to prove Mr. Kaiser correct.
Unfortunately, fancy yellow and orange diamonds are valuable because of their rarity, and while the larger diamonds do include some fancies, the just-completed cutting exercise shows that the largest worthwhile fancy weighed barely three-quarters of a carat. The data suggest that larger samples will deliver the desired goods in larger sizes, but North Arrow and Burgundy will need at least a 10,000-tonne test to flesh out the fancy population in those larger size categories.
The polishing and cutting marks the end of the bulk sample and therefore completes Burgundy's 40-per-cent earn-in. Now, Mr. Ravenscroft must decide if Burgundy will move to 60 per cent by paying for the next test. Either way, that work will not occur until at least 2024.