purcell;this should kick start things mondayStockwatch: Dianor Resources Inc: Dianor adds to its Leadbetter parcel
Dianor adds to its Leadbetter parcel
Dianor Resources Inc (C:DOR)
Shares Issued 124,822,487
Last Close 6/22/2006 $1.25
Friday June 23 2006 - Street Wire
by Will Purcell
John Ryder's Dianor Resources Inc. will need the results from many more of
its six-tonne mini-bulk tests to settle the grade of its Leadbetter diamond
occurrence, but three more drill holes show an amazing consistency across a
wider area of the big deposit. The company completed six holes along an
east-to-west line earlier, coming up with promotable diamond tallies. The
three new tests probe the Leadbetter rock along a line that meanders
southward across the central part of the deposit. The latest counts point to
a large body with ample tonnage and a consistent diamond content. Proving
those indications are an accurate representation of Leadbetter remains a key
challenge for the Wawa play.
The new numbers
Dianor used a larger minimum sieve size for its latest holes, losing several
hundreds of tiny microdiamonds in the process. The new tests still produced
hefty numbers, as the company recovered 2,486 diamonds from 742.4 kilograms
of kimberlite. The haul worked out to about 3,350 stones per tonne.
An encouraging array of larger stones gives that figure a promotable hue. The
haul included 467 diamonds larger than a 0.30-millimetre screen, and they
account for 18.8 per cent of the parcel. The 186 gems large enough to cling
to a 0.425-millimetre mesh provide 7.5 per cent of the latest haul.
Several deposits in other parts of Canada top those proportions, but the
contribution provided by the larger gems is much larger than other Wawa
finds. They also handily top numbers from the Fort a la Corne district in
Saskatchewan. That supports hopes that the Leadbetter deposit will have a
grade well above what Shore Gold Inc is finding in its Star pipe.
The new numbers are actually superior to what Dianor found along its
east-to-west line in recent months. The six earlier drill holes managed 5,699
diamonds from 2,132.9 kilograms of the Leadbetter conglomerate, using the
same 0.106-millimetre cut-off the company employed in its latest tests. That
haul works out to just under 2,700 stones per tonne. The latest parcel
represents a 25-per-cent improvement over that original parcel.
The size distribution of the diamonds recovered along the east-to-west line
also fell short of the new numbers. The older parcel included 960 diamonds
larger than a 0.30-millimetre sieve, and they accounted for 16.9 per cent of
the stones. The 414 gems large enough to sit on a 0.425-millimetre screen
provided 7.3 per cent of the parcel.
The earlier tests contained more large diamonds than the latest results, but
that appears to be a function of the sample sizes and statistical luck, not a
worrisome complexity in the diamond population. Dianor Recovered 41 diamonds
on a 0.85-millimetre sieve along the east-to-west line, and they accounted
for 0.7 per cent of the haul. There were only 13 such stones in the latest
tests. They account for 0.5 per cent of the latest crop, but the slight drop
does not appear to be statistically meaningful.
The surprising consistency suggests the combined result would offer a good
perspective of the entire Leadbetter deposit. In all, Dianor now has 8,185
diamonds larger than a 0.106-millimetre screen, gleaned from 2.88 tonnes of
the conglomerate rock. That works out to 2,850 stones per tonne.
The 1,427 diamonds larger than a 0.30-millimetre sieve provide 17.4 per cent
of the parcel, while the 600 stones larger than a 0.425-millimetre screen
account for 7.3 per cent of the haul. Dianor recovered 54 diamonds larger
than its mini-bulk cut-off of 0.85 millimetre. That portion represents just
under 0.7 per cent of the parcel.
A closer look
Those numbers offer grade encouragement, and the healthy numbers of stones in
the larger bin sizes allows a reasonable approximation of the carat
contributions from each class. The full nine-hole Leadbetter parcel probably
weighed nearly three carats, and that suggests a total diamond content of
about one carat per tonne.
Claims of gaudy grades from the Wawa area are nothing new to speculators, and
the earlier touts flopped badly with larger tests. The repeated Wawa
disappointments stemmed from the miserly size distribution curves that kept
most of the diamond weight in the smallest of the microdiamond sieves, which
collected minuscule stones by the thousands.
The healthier curve at Leadbetter offers far more encouragement. The
cumulative grade probably remains at about three-quarters of a carat up to
the 0.425-millimetre mesh, and doubling the cut-off to 0.85-millimetre likely
leaves Dianor with nearly one carat in diamonds, pointing to a grade of about
one-third of a carat per tonne. There were no large diamonds in the drill
cores to artificially inflate that result, so such a grade could well
represent a conservative floor for the Leadbetter deposit.
Diamond grades usually increase with larger tests, as the samples tap into
isolated zones with rich grades. As well, the increased numbers of large
diamonds expected in large tests amplify the cumulative grade, often to a
significant extent.
The results of three of more than 100 planned mini-bulk tests support those
expectations. Dianor tested 16.84 tonnes of conglomerate in its first three
samples, coming up with 6.097 carats of diamonds using a 0.85-millimetre
cut-off. That worked out to 0.36 carat per tonne. The largest diamond in the
test weighed about one-third of a carat, too small to pad the outcome.
Dianor found minor variations within its latest three holes, but they largely
cancelled each other. The middle hole, No. 17, produced diamonds at a rate of
nearly 3,900 stones per tonne, but it also had a potentially weaker size
distribution curve, with less than 18 per cent of the parcel sitting on a
0.30-millimetre screen.
The southernmost hole managed nearly 3,500 diamonds per tonne, but it also
had a weaker size distribution curve, with just 0.2 per cent of the diamonds
larger than a 0.85-millimetre screen and barely 18 per cent sitting on a
0.30-millimetre mesh.
The northernmost hole had the poorest microdiamond rate, at barely 3,000
stones per tonne, but it had the best size distribution. Nearly 20 per cent
of the stones sat on a 0.30-millimetre screen, and 0.9 per cent of the haul
remained on a 0.85-millimetre sieve.
Those numbers are likely the result of variations in the numbers of tiny
stones. Holes with larger numbers of minuscule gems would show a
significantly higher microdiamond rate, coinciding with a marked reduction in
the apparent size distribution of the parcel. That could well be the case
with Dianor's latest holes, as the total carat content appears quite
consistent across all three samples.
The questions
Dianor's growing legion of believers continue to hope for hefty grades and
major tonnage potential at Leadbetter, and the company will try to deliver on
those hopes with its mini-bulk sampling and drill program. Expectations for
an average grade above three-quarters of a carat per tonne now seem a distant
reach, but the company could easily deliver a grade of about one-half carat
per tonne if all goes well.
The tonnage potential of Leadbetter is also encouraging, although perhaps not
to the extent expected by some of Dianor's more bullish shareholders.
Drilling points to a strike length of about 1,500 metres and the
northward-dipping body could have an average true width of about 150 metres.
Those dimensions would support a calculation of well over 100 million tonnes,
to a depth of 250 metres.
The current work suggests the Leadbetter deposit has a better grade than the
Fort a la Corne kimberlites and it could have a tonnage that comes close to
the amount of worthwhile rock in Shore's Star pipe. Mining costs in the Wawa
area would likely be comparable with central Saskatchewan. That gives Mr.
Ryder another promotable boost.
Further, the Leadbetter deposit has some promotable advantages over the Fort
a la Corne kimberlites. The body outcrops on the surface and most of the
deposit lies under just a few metres of overburden. Meanwhile, Shore had to
dig through over 100 metres of overburden, just to reach the low-grade upper
part of Star. The potentially economic rock appears to lie at depths below
150 metres. The shallow nature of the Leadbetter deposit would result in much
lower stripping costs and make for a more modest mine footprint.
Star delivers a hefty supply of large diamonds, something that Mr. Ryder is
still looking for at Leadbetter. The size distribution curve from the drill
program suggests that Dianor will produce a good supply of large gems, but
the conglomerate may have a markedly more complex stones size distribution
pattern than a typical kimberlite pipe. The numbers of larger diamonds remain
at least a minor worry that more of the mini-bulk samples should address in
the coming weeks.
Dianor was unchanged at $1.25 Thursday, trading 38,000 shares.