Street Wire by Will Purcell John Ryder DianorA little old, but to some new investors it may not be.
2005-12-29 14:54 ET - Street Wire by Will Purcell John Ryder's Dianor Resources Inc. has another set of diamond counts from its Leadbetter play near Wawa. The new diamond haul comes from a lengthy drill intersection into the diamond-bearing rock. The tallies continue to support the company's hopes for a worthwhile diamond grade and they suggest the diamond content could be consistent across the potentially large body. The new microdiamond parcel sparked some brief investor enthusiasm, prodding Dianor's shares to an intraday high of 47 cents last Friday, as 440,500 shares traded on the last shopping day before Christmas. That high represented a jump of nine pennies over the 39 cents that a Dianor share cost before Mr. Ryder revealed the toutable new counts. Earlier bouts of market enthusiasm sparked similar surges, but speculators typically drifted off within a few weeks. Nevertheless, Dianor should be a steady newsmaker in the coming months and the story has an increasing chance of being a good one, based on a closer look at the latest numbers. The tallies Dianor's second drill hole bored through nearly 150 metres of the diamondiferous rock, providing the company with 320.59 kilograms of the material. The rock yielded 1,560 diamonds, including 859 stones that sat on a 0.106-millimetre sieve. That latter parcel worked out to nearly 2,700 stones per tonne. That is a promotable rate, but the Wawa district is renowned for delivering hefty microdiamond counts without similarly toutable diamond grades. The Leadbetter occurrence is the only diamondiferous rock found near Wawa to consistently deliver promotable quantities of larger diamonds, and the latest drill hole brought more encouragement. The diamond haul included 150 stones large enough to sit on a 0.30-millimetre sieve, and that worked out to about 17.5 per cent of the 859-stone parcel. As well, there were 66 stones big enough to cling to a 0.425-millimetre mesh, providing 7.7 per cent of the diamonds larger than 0.106-millimetre. The latest Leadbetter test included six stones that remained on a 0.85-millimetre sieve, which is the cut-off typically used in a small mini-bulk test. Two stones remained on a 1.18-millimetre screen, and the largest gem clung to a 1.70-millimetre sieve. That diamond exceeded two millimetres in three dimensions, and it weighed 0.08 carat. Five other large diamonds probably pushed the weight of the mini-bulk parcel to about 0.12 carat, suggesting a content of about 0.4 carat per tonne. The latest numbers were a good match with what a drill test produced earlier this fall, from a site about 200 metres to the west. Dianor drilled up 119 kilograms of the diamond-bearing rock in that test, which yielded 393 diamonds larger than a 0.106-millimetre cut-off. That worked out to 3,300 stones per tonne, which was nearly 25 per cent better than the latest result. The difference between the two tests is likely the result of random statistical variation, rather than a meaningful trend toward lower diamond recoveries as Dianor drills its way eastward. In nay case, the latest diamond rate is more than enough to sustain interest in the play. The earlier haul included 76 stones larger than a 0.30-millimetre mesh. Those diamonds accounted for 19 per cent of the parcel, which was also a bit better than the latest result. Random statistical noise probably accounts for that difference as well, and the recoveries on the larger sieve support that suspicion. Dianor recovered 23 diamonds on the 0.425-millimetre screen, which works out to 5.9 per cent of the parcel. The company's latest test handily topped that value. The variations Dianor's latest test contained 22 individual samples of diamond-bearing rock, each covering an interval of about six metres. The individual diamond counts varied from a high of 181 to a low of just 15, which might suggest the material had some big variations in diamond content. Still, a closer look at the numbers offers little support for that concern. Big swings in the diamond tallies produced by small samples is the norm, and breaking the latest sample down into three vertical sections points to fairly little variation in the numbers. The top eight individual samples contributed 107 kilograms of diamond-bearing rock, coming from the surface to a depth of 48 metres. The rock produced 614 diamonds, including 357 stones found on a 0.106-millimetre screen. That latter number points to a rate of 3,300 stones per tonne. The 63 diamonds larger than a 0.30-millimetre sieve accounted for 17.6 per cent of the parcel and the 31 gems bigger than a 0.425-millimetre sieve produced 8.7 per cent of the haul. Those rates were a fraction higher than the sample as a whole, although the increase was well within the expected statistical variation. The middle zone of the test was not as prolific. Dianor recovered 112 kilograms of rock between 48 metres and 96 metres. The material yielded 434 diamonds, including 234 stones found on a 0.106-millimetre mesh. That worked out to 2,100 stones per tonne, about two-thirds the value obtained in the upper zone. The size distribution of the middle region also lagged behind the uppermost samples. Dianor recovered 34 stones on the 0.30-millimetre mesh, providing 14.5 per cent of the parcel. The 11 gems found on a 0.425-millimetre mesh accounted for 4.7 per cent of the parcel. Those rates are also about one-third less than the upper zone managed, fuelling concerns that the lower rock might have decreasing quantities of diamonds. Still, the numbers might just reflect the random nature of diamond deposits. The tallies from the lowest samples support that position. Dianor processed 115 kilograms of Leadbetter rock that it drilled up from below 96 metres. The material produced 514 stones, including 270 that met the 0.106-millimetre cut-off. That haul worked out to 2,350 stones per tonne, which was a healthy increase over what the middle section delivered. Further, the size distribution of the bottom zone was the best of the three sections. Dianor recovered 53 stones on the 0.30-millimetre mesh, and that worked out to 19.6 per cent of the parcel. The 24 gems found on a 0.425-millimetre sieve accounted for 8.9 per cent of the parcel. Those rates are enough to compensate for the lower diamond counts, making the deeper rock a potentially prolific source of diamonds. The minor variations in the latest tests might be a continuation of a trend noted in the first hole that Dianor completed this fall. That hole encountered a smaller amount of diamondiferous rock, but breaking the test into three zones yields a similar result. Still, it is far too soon to discover any real variations within the vertical extent of the Leadbetter rock. The top zone of the first hole produced the best size distribution curve, with about 27 per cent of the diamonds being large enough to sit on a 0.30-millimetre sieve and 7.5 per cent clinging to a 0.425-millimetre mesh. The uppermost rock produced diamonds at a rate of 3,400 stones per tonne. The proportions were markedly better than in the middle region, which managed rates of 13.3 per cent and 4.9 per cent respectively. The similarity with the latest hole ended there, as the first test managed 4,500 stones per tonne in the middle zone. Dianor again managed a better rate with the deepest rock, coming up with proportions of 19.0 per cent and 5.1 percent. The diamond counts fell off however, with Dianor coming up with just 1,970 stones per tonne in the deepest rock recovered in its earlier test. The consistency Dianor's three drill holes produced 2,400 diamonds from 546 kilograms of diamond-bearing rock, including 1,398 stones large enough to remain on a 0.106-millimetre sieve. That works out to 2,560 stones per tonne. Nearly 18 per cent of the parcel came from diamonds larger than a 0.30-millimetre sieve, and stones sitting on a 0.425-millimetre mesh accounted for 7.2 per cent of the haul. Dianor processed several samples from surface pits across the Leadbetter occurrence earlier this year and the numbers are comparable. The 352 kilograms of rock yielded 1,835 diamonds, including 1,229 stones that sat on a 0.106-millimetre mesh. That latter number gives a rate of nearly 3,500 stones per tonne. The 238 diamonds larger than a 0.30-millimetre mesh accounts for 19 per cent of the parcel, and the 105 gems recovered on the 0.425-millimetre mesh points to a rate of 8.5 per cent. Those numbers are comparable with what Dianor is now turning up in its drill program. There are some crude hints that the Leadbetter occurrence may have better grades and stone size distributions in the layers near the surface, but it will take much more testing to prove that possibility. Further, any differences in the diamond counts and size distributions seem modest, both horizontally and vertically. As a result, added testing may not show much variation. Unlike many diamond hunters, Dianor should have a busy winter. The company should have a steady stream of diamond counts from its drill program and it is also working on a series of mini-bulk tests that should begin to flesh out the grade possibilities of the Leadbetter rock. Dianor added nine cents Wednesday, closing at 52 cents on 943,000 shares.