No stones as large as SNONew Nadina plans bigger tests
2006-10-05 18:29 ET - Street Wire
by Will Purcell
New Nadina Resources Ltd. will conduct larger tests of its Lac de Gras Monument kimberlites to prove their grade potential, and more drilling to boost the tonnage potential of the play. The company got encouraging diamond counts from two new kimberlites and one is a candidate for a larger test. The other needs more drilling, as do a few other small pipes. New Nadina and its partners, SouthernEra Diamonds Inc. and Archon Mineral Ltd. also have some new targets they plan drilling early next year.
Mini-bulk plans
The Nic pipe is the new favourite of New Nadina's Ellen Clements. A 168-kilogram batch of rock yielded 101 diamonds larger than a 0.106-millimetre cut-off, and the parcel had an unusually coarse size distribution. One of the stones weighed 0.17 carat and has Ms. Clements touting the grade possibilities. "Now we have something we can sink our teeth into and then prove up the tonnage on the other pipes." Ms. Clements said they had an offer of a large diameter drill, but there were commitments attached. Encouraged by the sparkle from Nic, New Nadina prefers to continue its own program.
Most of the bodies are land-based and lie near the surface, so Ms. Clements is thinking of using trenching equipment. She said New Nadina considered the large diameter rig offer because of its ability to produce a larger and more representative sample of rock from DD-17, which lies under a pond. Even there, the company can dig up a sample from the eastern fringe of the pipe.
New Nadina will need an experienced contractor and the required permits for the program, so the company must get rolling quickly. Ms. Clements is contemplating a 10-tonne sample from Nic, and some other bodies.
Large gems aside, the other pipes may have comparable diamond grades. Small samples can be misleading, especially with the combination of modest stone counts and coarse size curves. Still, the initial tests of Sonja, DD-17, Rip and DD17-11 yielded encouraging results that make larger tests a reasonable next step.
The drill plan
New Nadina first hopes to determine the size of those other bodies. Grade remains an unknown, but the perception that the bodies are too small is the biggest knock against the play. Ms. Clements would not estimate the size of the pipes based on geophysics.
New Nadina thinks it can cobble together enough smaller bodies to make a worthwhile project. The pipes lie along a 1.2-kilometre line and they could be connected, offering more size potential. Further drilling could boost the size of the bodies further, as kimberlites frequently are larger than their geophysical anomalies.
New Nadina hopes to have its permits and contracts in place in time for a February start to the sampling and drilling program. The cost of the program would likely run to at least $2-million, requiring financing. Still, the partners apparently have enough cash to cover the commitments and deposits required through the rest of the year.
New Nadina's work this year has the Monument play back from the dead, and that may prompt the company to find a well-heeled partner on the play. Ms. Clements said she was reluctant to sell something when she was unsure of what they had, so any deal may wait until the next round of work is complete. She also worries that a larger partner might decide to put the project on hold. A lengthy hold by Kennecott nearly killed the play in the late 1990s.
New Nadina lost four cents to 26 cents Wednesday on 37,000 shares.